A tenth straight winning month ended with a whimper as US futures flashed red after market heavyweight Amazon missed sales expectations.
The S&P/ASX 200 faded late afternoon to a loss of 25 points or 0.33 per cent.
For the month, the index put on 80 points or 1.1 per cent. Barring a fleeting setback last September, the index has risen every month since the original pandemic sell-off bottomed out in March 2020.
A mixed market today saw gains in NAB, CBA and BHP dwarfed by declines in tech stocks and bond proxies.
What moved the market
Cautiously positive overnight leads were quickly overshadowed by ominous portents about tonight's US trade. Nasdaq futures dived 209 points or 1.4 per cent after Amazon's sales fell short of estimates. S&P 500 futures dropped 38 points or almost 0.9 per cent.
Amazon had been something of a poster boy for pandemic winners, recording quarter after quarter of 40%+ growth. Shares in the retail giant sank 7.47 per cent in after-hours trade after it reported sales increased 27 per cent last quarter.
“They just don’t have the tailwinds they had last year,” Brian Yarbrough, analyst at Edward D. Jones, told Bloomberg. “It just becomes the law of large numbers. There’s just no way it can be sustained.”
Fears that the best of the pandemic bump in online sales might be over appeared to infect trade in online retailers here. Art marketplace Redbubble skidded 11.23 per cent. Furniture retailer Temple & Webster fell 3.63 per cent. Kogan dipped 0.29 per cent. Meal delivery service Marley Spoon tanked 21.51 per cent after reporting a half-year operating loss of 15 million euros as it invested in marketing.
The Australian market outperformed its Asian peers ahead of next month's full-year earnings season. Kalkine Group CEO Kunal Sawhney said investors in banks and miners could look forward to increased dividend payments, but tech stocks might disappoint.
"The market is closely eyeing reasonable earnings from major Australian banks, which were able to draw in profitable results with improved cash balance during the pandemic," Mr Sawhney said. "In fact, the market may witness the normalisation of dividends at these banks as they are no longer facing any cap on dividend payments. Although, the growing competition from neobanks and fintechs may put the sector under the scanner.
"Akin to banks, miners may also lift their dividend payouts while benefitting from buoyant resources prices over the last year. At the same time, it will be interesting to see to what extent miners will feel the pinch on their earnings amid changing dynamics of the commodity supercycle.
"Meanwhile, certain technology players may face significant earnings hit. Some of the tech businesses encountered pressure on their valuations amid inflation expectations and rising bond yields in the first half of the year. It is to be seen if the losses are capped, given the current lockdown scenario has reignited the attractiveness of the technology sector, bolstering the potential for digital transformation."
NAB climbed 0.62 per cent after announcing plans to buy back up to $2.5 billion of shares on-market. The buyback represents an unwinding of the defensive stance adopted by many companies during the depths of the pandemic. Other companies are expected to follow. NAB raised capital and slashed its dividend last year to bolster its balance sheet.
CBA firmed 0.2 per cent. Westpac finished unchanged. ANZ eased 0.14 per cent.
The big three miners struggled to build on yesterday's record highs, fading late in the session with Chinese iron ore prices. The ore price reportedly hit a two-month low in Singapore trade this afternoon.
BHP touched a new high before cutting its loss to a slender 0.3 per cent. Rio Tinto slid 0.56 per cent. Fortescue Metals retreated 5.29 per cent from yesterday's record close.
Seven Group eased after tightening its grip on Boral. Seven CEO Ryan Stokes was appointed chairman of the Boral board after Seven increased its stake in the construction materials business to 69.6 per cent. Former Boral chair Kathryn Fagg retired from the board. Seven shares inched down 0.26 per cent. Boral shares dropped 2.18 per cent.
Gold's best session since May boosted local miners. Ramelius rose 3.65 per cent, Silver Lake Resources 2.68 per cent and Newcrest 0.3 per cent.
Fund manager Janus Henderson climbed 7.68 per cent following yesterday's half-year update. Lithium miner Orocobre rallied 3.38 per cent to a new record.
Origin Energy dived 7.85 per cent after flagging $2.2 billion in impairments and tax expenses in its full-year result. The charges reflect reductions in the carrying value of assets as wholesale electricity prices decline, as well as a deferred tax liability. The company reaffirmed full-year guidance.
AMP fell 2.35 per cent to an all-time low after the regulator, ASIC, launched civil proceedings against the wealth manager over a superannuation fee scandal. AMP said it had fixed the issue and remediated 2,500 customers for a total of $900,000.
BNPL firm Sezzle dropped 10.99 per cent after reporting increasing pressure on margins last quarter. Underlying merchant sales rose 118.7 per cent year on year.
Asian markets followed US futures lower. The Asia Dow fell 0.94 per cent, China's Shanghai Composite 1.01 per cent, Hong Kong's Hang Seng 2.27 per cent and Japan's Nikkei 1.73 per cent.
The "risk-off" mood helped drag Brent crude down 60 US cents or 0.8 per cent to US$74.50 a barrel.
Gold trimmed strong overnight gains, falling US$4.30 or 0.23 per cent to US$1,826.90 an ounce.
The dollar retreated 0.2 per cent to 73.81 US cents.