The ASX gained 0.29% or 22.40 points to 7,759.50 today, rising across its 50-day moving average.
Real Estate (+1.68%), Comm Services (+2.09%), Health Care (+1.61%) and Consumer Staples (+1.42%) were the main upward drivers for the market today, with just Info Tech, Materials and Energy in the red.
It was a difficult day for commodity traders, with everything from precious and base metals to oil strongly in the red – many commodities fell as much as 2%.
The losses are partly due to profit-taking – some commodities have been on an absolute tear this year, with silver, tin and zinc gaining about 25% in the last 12 months and copper and gold not far behind.
Oil is a different story, weakening after a US crude oil inventories rose by 4.052 million barrels for the week ending May 24 and OPEC+ signalled it planned to phase out some of its production cuts.
Top-performing stocks today were Treasury Wine Estates Ltd, up 5.27%, and Seek Ltd, up 5.11%.
The ASX200 has gained 1.22% over the last five days and currently sits 1.91% off its 52-week high.
Slow start for Aussie GDP
Moody’s Analytics economist Harry Murphy Cruise joins us to discuss the most recent Aussie GDP numbers, and what it may mean for the economy.
“It was a slow start for the Aussie economy in 2024. Across the opening three months of the year, the economy jumped just 0.1% quarter on quarter (q/q).
“When stripping out the impacts of strong population growth, the economy fell 0.4% — marking the fifth consecutive quarter-on-quarter fall.
“Household spending was the big unknown ahead of this print. We knew that families were struggling under the weight of sticky inflation and still-high interest rates but the March-quarter data makes clear that they kept trimming their spending to cope with cost-of-living pressures.
“On a per person basis, spending fell 0.1% q/q, continuing a run of falls that started in March 2023. Even with that further pullback in spending, households are able to save less than a cent of every dollar they earn.
“That saving behaviour will be incredibly important come July when tax cuts and energy rebates start to hit bank accounts; or more accurately, when those rebates and tax cuts stop taking from bank accounts.
“The government and Reserve Bank of Australia are hoping families put those savings away for a rainy day, rather than spend it through the economy. But with families under so much pressure, it’s likely a large chunk of those dollars will be spent.
“We don’t expect that extra spending will be enough to spur a resurgence in inflation, but it risks being a handbrake on its progress through this year and next.
“Adding to the bad news, business investment—which had been a real bright spot for the Aussie economy in recent times—fell 0.8% q/q. A 4.3% drop in non-dwelling construction was the main culprit.
“Still, there were some pockets of strength. Spending on machinery and equipment jumped 2% q/q and computer software spending jumped 2.3%, both given a helpful nudge as firms look to play catchup in the technology revolution (did someone say AI?).
“Elsewhere, trade detracted 0.9 percentage points from the quarter’s GDP growth. A sharp rise in imports was to blame for the poor result, jumping 5.1% q/q on the back of a 9.5% q/q rocketing of consumption goods imports.
“The jump in imports helped rebuild dwindling inventories, which contributed 0.7 percentage points to quarter-on-quarter GDP growth. Meanwhile, exports rose 0.7% q/q.
“With inflation digging in its heels, things have gotten a little trickier for the economy this year. We expect GDP growth to slow to just 1.1% this year from 2.1% last year.
“We have also lowered our outlook for 2025, with the economy now on track to expand 2.1%, compared with 2.2% in our previous forecast.”
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