The Fed and RBA have taken different paths in the last few years, but both have ultimately started tightening again. The Fed began 2024 with rates at 5.25%-5.5%, cut aggressively by a total of 175bps to 3.5%-3.75% by December 2025, then paused as inflation pressures returned before hiking 25bps to 3.75%-4.0% earlier this month. In contrast, the RBA waited until February 2025 to start cutting and delivered just 75bps of easing, taking the cash rate from 4.35% to a low of 3.60% by August 2025. It's been hard work of late for local investors with higher interest rates and lower earnings growth:
e ASX 200 closed lower today, trading in a fairly tight range through the day, as technology stocks extended their recent slide for a fourth consecutive session and consumer discretionary came under further pressure, falling to a near four-month low. On the positive side, Consumer Staples firmed and Financials held up reasonably well, the two sectors doing the defensive work in what has been a difficult week shaped by rising rate expectations.
Early weakness saw the ASX 200 make fresh 3-month lows on Thursday following a soft session on Wall Street. The banks and miners finally danced to the same tune, but unfortunately it was a bearish one, which caused ~90% of the day's decline, led by BHP Group (-1.7%), Westpac (-1.8%), and Commonwealth Bank (-0.7%).
The ASX endured another difficult session today, and while the index encouragingly bounced ~60pts from the lows of the session after softer employment data partially pared back rate hike bets, a move higher in the cash rate remains almost fully priced in for next week’s RBA meeting.
The ASX 200 battled to a 0.1% gain on Wednesday, with BHP alone contributing about twice the index’s overall advance from a points perspective, masking underlying weakness in financials. At the stock and sector level, it was almost as if the market had tuned into yesterday’s MM webinar, “Investing in a 5% World,” with investors voting with their feet and compressing the valuations of long-duration growth stocks as bond yields remained elevated.
The ASX finished little changed on Wednesday as weakness across utilities, energy and the banks was offset by a strong session in the lithium and copper names as copper hit a record US$6.92/lb overnight, providing a strong backdrop for the resources sector. M&A continues to be a dominant driver for single-stock moves, though the broader market remained largely macro-driven, balancing stronger commodity prices against ongoing concerns around higher rates.
The ASX 200 experienced a choppy session on Tuesday before eventually closing up +0.3%, taking the index into positive territory for the week. The miners contributed more than 50% of the day's advance, but it was a relatively quiet affair considering the impressive gains in Europe and the US overnight. The tug of war at the pointy end of the market remains fairly evenly balanced, with investors only prepared to buy either the banks or miners on a day-to-day basis, appearing to use the other to fund the purchases.
The ASX 200 finished modestly higher today, but the headline gain masks another fairly mixed session. The index jumped ~50 points at the open following a strong lead from Wall Street and renewed enthusiasm around the AI trade and a drop in Oil prices, before handing back some of those gains as the day progressed.
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
Verication email sent.
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
!
Invalid One Time Password
Please check you entered the correct info, please also note there is a 10minute time limit on the One Time Passcode
To reset your password, enter your email address
A link to create a new password will be sent to the email address you have registered to your account.
Market Matters members receive daily market reports, real-time trade alerts, full access to 5 portfolios and dynamic company data.
Choose how you'd like to proceed:
We have a range of membership options to suit your needs and budget, why not join today and get unlimited access to the premium Market Matters service.
