Wine time for Treasury, but not the ASX

The Australian share market improved after a weak start on Wednesday, however faded in afternoon trading to close 0.1% lower at 7,502.1. The downtrend is likely to continue this morning after Wall Street's late sell-off following the release of Federal Reserve minutes, which showed a broad consensus for a slowdown in the massive purchases of bonds and securities in the coming months. The Fed’s minutes had little initial impact on trading, yet equities fell sharply in the final hour of trading. According to Peter Cardillo of Spartan Capital Securities, the Fed minutes are “just an excuse for investors to take some money off the table”.   European stocks were also volatile, while Asian markets made strong gains.  Despite gains in Asia, the current spread of COVID-19 is having an impact across global markets. ThinkMarkets analyst Fawad Razaqzada said, “The source of uncertainty is almost entirely due to the resilience of COVID and virus-related restrictions which have negatively impacted the global economy recovery. “Global stock markets have been struggling across the world in recent days, although the selling has been limited for the European and US indices thus far.”  Overall, Wednesday saw another day of falls across the board. The Australian dollar was lower at US$72.47. Iron ore fell 4% to $US153.05 a tonne.  Brent oil lost 1.2% to $US68.23 a barrel.  Gold futures fell 0.2% to $1784.40 an ounce. In Australia As stated, the Australian market is expected to again start slowly. COVID cases are expected to rise in Sydney with experts predicting numbers could blow into the thousands in the next few weeks, while in Melbourne cases have more than doubled overnight to 57 new cases.  Today, we’ll see earnings released from Origin Energy Ltd (ASX:ORG), Newcrest Mining Ltd, Star Entertainment Group Ltd, ASX Ltd (ASX:ASX), South32 Ltd and Evolution Mining Ltd (ASX:EVN). It was interesting to see Treasury Wine Estate Ltd perform well yesterday.  It seems people are drinking more during lockdown. Treasury Wine owns Penfolds, Wolf Blass and Lindemans and despite being shut off from the billion-dollar Chinese market after the imposition of crippling tariffs (200%-plus tariffs due to the current political trade dispute between Australia and China), has managed to hold its earnings steady. The company has generated strong cash flows throughout its regions to help fund a 62.5% leap in its final dividend. Despite the China market wipeout, the winemaker has booked rising sales per case from all other regions driven by premium brands such as Penfolds – now contributing 77% of global net sales, up from 71% in 2020. Treasury Wine posted a 1.8% lift in full-year net profit to $250 million, although revenue fell 3% to $2.569 billion.  Investors can expect a higher dividend despite lost sales from China, with a final dividend of 13 cents per share declared, fully franked – an increase of 62.5% on the 2020 final dividend.  Australian indices ASX 200 fell 0.12% to 7,502.10 ASX24 futures rose 0.8% to 7,370.  S&P/ASX Small Ordinaries rose 0.55% to 3,478.70 All ordinaries fell 0.033% to 7,770.70 S&P/ASX 100 fell 0.19% to 6,201.40  In the US Wall Street stocks pared back on the back of the Federal Reserve minutes signalling a likely pullback on stimulus measures later this year. Disappointing US retail sales didn’t help. However, large retailers are performing well, which is encouraging for the markets moving forward.   Despite the slump in retail sales, large retailers reported good earnings for the quarter. Apple Inc (NASDAQ:AAPL). dragged the market down after falling 2.6%, while Chevron Corporation (NYSE:CVX) fell 2.7%. US indices Dow Jones fell 1.1% to 34,960.69. S&P 500 fell by 1.1% to 4,400.27  Nasdaq declined 0.9% to 14,525.91 In Europe An overall mixed performance. The pan-European STOXX 600 was back on the winner's list, albeit a small gain of just 0.1%. Utilities stocks were up 1.4% but the miners down 2.3%: Rio Tinto fell by 2.6% and shares in BHP dropped 5.9%.  European indices STOXX 600 rose 0.1% to 47,442. German Dax rose 0.3% to 15,965.97  UK FTSE fell 0.2% to 7,169.32  Keep an eye out for In Australia, employment and average weekly earnings data are issued. In the US, the leading index is released with the Philadelphia Fed factory index and initial jobless claims figures.