The Australian share market has risen on open, and regional airline Rex has been fined $66,000 by ASIC for disclosing information to the media before shareholders.
Key points:
- Tech stocks dragged down Wall Street on its first day of trade for the week
- Bitcoin is at a three-month low after more tweeting by Tesla boss Elon Musk
- Despite that, the ASX 200 is set to rise today
At 10:15am AEST, the ASX 200 was up 0.7 per cent.
Early performers included energy stocks Bluescope Steel (+2.3pc), Evolution Mining (+4.3pc) and Fortescue (2.34pc).
That is after the price of iron ore rebounded.
Beach Energy is also up 0.8 per cent as it continues to see the positive impacts of the federal government’s $2 billion package for two local oil refineries.
Globally, the price of oil is up.
It is up 1.1 per cent to $US69.46 on rising demand from the US and hopes that it will rise further as Europe re-opens from the pandemic.
Rex airlines fined $66,000
Regional airline Rex has been fined $66,000 by ASIC.
The corporate watchdog said the fine was in relation to a media interview that the airline did with the Australian Financial Review in May, 2020 about the potential to expand its domestic operations.
ASIC found it did this before disclosing its potential expansion to the ASX.
Rex went into a trading halt after the AFR story was published and then told shareholders it was considering a domestic expansion.
ASIC found there were reasonable grounds to believe that Rex was in breach of its continuous disclosure obligations.
Rex has issued a statement this morning disputing that it did not fulfil its disclosure requirements.
However, it said it will pay the fine.
Tech stocks drag down Wall St
There are concerns that rising inflation in the US will see monetary policy soon tightened.
Vice-chair of the Federal Reserve, Richard Clarida, said the US economy has not met the “substantial further progress” threshold for tapering asset purchases.
He also said “we will certainly give advance warning before we anticipate scaling back the pace of those purchases”.
But ANZ analysts noted that Mr Clarida did not sound an alarm from last week’s big inflation surprise.
“We expect the minutes from the FOMC’s April 28 meeting released on Thursday morning to be consistent with Clarida’s views,” a company spokesperson said.
As those fears grow, all US markets ended lower, with the tech-laden Nasdaq taking the biggest hit, albeit with a loss of just 0.4 per cent.
Major retailers including Walmart, Ralph Lauren, Macy’s and Target (American) are all set to report in the US this week.
The US dollar is also down against the major currencies.
The Australian dollar is buying 77.69 US cents.
‘Elon effect’ continues on Bitcoin
The cryptocurrency has dropped to a three-month low after Tesla boss Elon Musk took it on a wild ride.
ABC News
)Bitcoin is down to US$42,185 – which is still high compared to last year but its lowest value since February.
Mr Musk had been a big proponent of the currency but in the last week has been tweeting concerns about its environmental impact and how he won’t let people use it to buy Tesla cars.
That had followed pressure from activists about his use of Bitcoin, which has a large carbon footprint due to the process known as “mining”.
Mr Musk suggested earlier this week that he may have sold off some of his coin.
But in a tweet he now said Tesla has not sold off any of the cryptocurrency.
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Mega entertainment merger
Mega entertainment production house WarnerMedia and TV network Discovery are set to merge.
The merger will put another streaming giant into the increasingly competitive space.
WarnerMedia is owned by conglomerate AT&T.
WarnerMedia includes the eponymous film studio that produces blockbusters such as Harry Potter and Batman, and HBO, the producer of shows such as Game of Thrones and Sex & The City.
Meanwhile, separate company Discovery has TV channels such as Animal Planet and Food Network.
In a note to investors, AT&T said it would spin off WarnerMedia to merge with Discovery, subject to regulatory approvals.
“The companies expect the transaction will create substantial value for AT&T and Discovery shareholders by … accelerating both companies’ plans for leading direct-to-consumer streaming services for global consumers,” the note said.
“The new company will compete globally in the fast-growing direct-to-consumer business.”
The deal comes as streaming platforms such as Netflix performed strongly during the pandemic and increasingly challenged traditional production houses.
The enterprise value of the new combined company will be more than $US120 billion, carrying $US58 billion in debt.
AT&T only spent $US85 billion to acquire the WarnerMedia assets less than three years ago.
The name of the new company will be disclosed by next week.