Tuesday's interest rate decision and accompanying commentary was one occasion we weren’t overly happy to be correct on; MM has written a few times recently that the RBA should and will cut rates by 0.25%, but we expected a cautious tone and only one more cut in 2025.
The ASX200 slipped -0.2% on Monday, a reasonable performance considering the weakness in the banks dragged the market down ~0.9% at its worst. More on the banks later, but their influence was evident, with weakness across the sector weighing on the broader market.
It's no secret that the RBA is expected to cut rates this week, with the futures market calling it an “87% probability.” However, the accompanying rhetoric is likely to drive local stocks in the coming weeks, especially with the market looking for two additional cuts into Christmas, taking the Cash Rate to 3.6%. Local rates have sat at a restrictive 4.35% since November 2023, and we think three cuts are likely to prove too dovish; Michele Bullock's comments on Tuesday will be a classic case of the devil being in the detail.
The ASX200 ended a choppy Thursday slightly higher after registering a fresh all-time high around midday before drifting lower through the afternoon. The market is starting to feel a little tired after surging over 25% from its late 2023 low, not just on the index level but also some of its high-valuation top performers are encountering profit-taking, even in most cases after posting solid results, i.e. Pro Medicus (PME), JB Hi-Fi (JBH), IAG Insurance (IAG) and CAR Group (CAR).
The ASX200 felt like a “one trick pony” on Wednesday, following CBA’s strong result, as the index's largest company led the “Big Four Banks” to an average gain of +1.5% as NAB and WBC joined CBA in making fresh all-time highs, contributing well over half of the day 51-point advance.
The ASX200 surrendered early gains on Tuesday to end the session up just 1 point, with CSL the primary weight on the index and healthcare sector. The biotech’s 5% fall took almost 22 points off the index, offsetting gains elsewhere helped by several positive earnings results across the market.
The ASX200 slipped -0.3% on Monday, a solid performance considering the weakness on overseas bourses on Friday night. The defensive end of town supported the local index, with the consumer staples, utilities and healthcare sectors the only three to advance, while tech spent a rare day in the naughty corner, falling 1.4%.
The US jobs data released on Friday showed that the US labour market remains strong, increasing the odds that the Fed will remain patient on interest rate cuts. The more President Donald Trump threatens tariffs on the US’s trading partners, the more worry another inflation wave troubles global economists.
The ASX200 surged towards new highs on Thursday as the buyers drove any resistance into submission throughout a day of relentless buying, with the rate-sensitive financials, consumer discretionary and real estate names leading the gains.
The ASX200 bounced +0.5% on Wednesday and although it still finished well off its intra-day high it was an encouraging session for local stocks who shrugged off weak US futures, following Googles softer than hoped result.
The ASX200 slipped -0.2% on Monday, a reasonable performance considering the weakness in the banks dragged the market down ~0.9% at its worst. More on the banks later, but their influence was evident, with weakness across the sector weighing on the broader market.
It's no secret that the RBA is expected to cut rates this week, with the futures market calling it an “87% probability.” However, the accompanying rhetoric is likely to drive local stocks in the coming weeks, especially with the market looking for two additional cuts into Christmas, taking the Cash Rate to 3.6%. Local rates have sat at a restrictive 4.35% since November 2023, and we think three cuts are likely to prove too dovish; Michele Bullock's comments on Tuesday will be a classic case of the devil being in the detail.
The ASX200 ended a choppy Thursday slightly higher after registering a fresh all-time high around midday before drifting lower through the afternoon. The market is starting to feel a little tired after surging over 25% from its late 2023 low, not just on the index level but also some of its high-valuation top performers are encountering profit-taking, even in most cases after posting solid results, i.e. Pro Medicus (PME), JB Hi-Fi (JBH), IAG Insurance (IAG) and CAR Group (CAR).
The ASX200 felt like a “one trick pony” on Wednesday, following CBA’s strong result, as the index's largest company led the “Big Four Banks” to an average gain of +1.5% as NAB and WBC joined CBA in making fresh all-time highs, contributing well over half of the day 51-point advance.
The ASX200 surrendered early gains on Tuesday to end the session up just 1 point, with CSL the primary weight on the index and healthcare sector. The biotech’s 5% fall took almost 22 points off the index, offsetting gains elsewhere helped by several positive earnings results across the market.
The ASX200 slipped -0.3% on Monday, a solid performance considering the weakness on overseas bourses on Friday night. The defensive end of town supported the local index, with the consumer staples, utilities and healthcare sectors the only three to advance, while tech spent a rare day in the naughty corner, falling 1.4%.
The US jobs data released on Friday showed that the US labour market remains strong, increasing the odds that the Fed will remain patient on interest rate cuts. The more President Donald Trump threatens tariffs on the US’s trading partners, the more worry another inflation wave troubles global economists.
The ASX200 surged towards new highs on Thursday as the buyers drove any resistance into submission throughout a day of relentless buying, with the rate-sensitive financials, consumer discretionary and real estate names leading the gains.
The ASX200 bounced +0.5% on Wednesday and although it still finished well off its intra-day high it was an encouraging session for local stocks who shrugged off weak US futures, following Googles softer than hoped result.
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