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First Up

UPDATED 29/05/2025 09:27

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The ASX 200 failed to build on a strong session on Wall Street, finishing down 0.1% on Wednesday, with weakness in the banks more than offsetting broader buying, as over 55% of the main board closed higher. The winners & losers enclosure was an eclectic mix on both sides, apart from the lithium stocks experiencing another tough session, led by Mineral Resources (MIN), whose decline was compounded by another downgrade courtesy of haulage issues – more on this later.

Tax-loss selling is likely to increasingly figure on the stock level as we head into June, with Treasury Wine (TWE) falling to fresh multi-year lows, the sort of stock to attract such attention – the phenomenon can often create excellent buying opportunities. Other companies that could find themselves in the crosshairs of active investors include those in the lithium and uranium sectors, which have endured a particularly tough few years; Heavyweight Pilbara Ltd (PLS) is down 40% year-to-date, taking it down towards 4-year lows where Shawn’s Trade Ideas has a resting bid.

NB: Tax loss-selling is when investors dump underperforming stocks to crystallise losses, which can then be used to offset the capital gains made elsewhere, or as we often say, they put the broom through their portfolio.

On the economic front, the slightly higher-than-anticipated inflation data helped push an already soft stock market into negative territory. Still, its lack of impact on the $A and local bond market illustrated it’s not expected to impact the RBA’s rate-cutting journey through 2025/6. Credit markets are still looking for three 0.25% cuts by February’26.

We believe the RBA will cut at least twice before Christmas and potentially three times after Michele Bullock’s recent dovish RBA commentary.

Overseas indices were soft overnight ahead of Nvidia’s (NVDA US) earnings numbers. In Europe, the UK FTSE retreated 0.6% and the EURO STOXX 500.7%. US stocks fell away into the close ahead of Nvidia’s influential result, with the S&P 500 finishing the session down 0.5% – more on NVDA as the results come in.