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Five at Five AU: ASX falls to lowest level since January; Australians struggle with financial literacy; Consumer confidence at recessionary levels

Published 14/03/2023, 03:30 pm
© Reuters.  Five at Five AU: ASX falls to lowest level since January; Australians struggle with financial literacy; Consumer confidence at recessionary levels
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The ASX fell sharply today, shedding 1.52% or 107.70 points to 7,002.70 to set a new 20-day low.

The sectors were consequently red across the board, with Energy (-2.92%) and Information Technology (-3.60%) dipping the most.

Commodities were a different story for the most part, with precious and platinum group metals gaining and base metals creeping up behind them.

Zinc and West Texas Intermediate crude oil were the exceptions, dropping 1.40% and 2.60% respectively.

The bottom performing stocks were Novonix Ltd (ASX:ASX:NVX), down 7.84% as the company braces to be imminently jettisoned from the ASX200, and Lake Resources NL (ASX:LKE, OTCQB:LLKKF), down 8.47% as the lithium brine company weathers softening lithium prices and an ongoing short selling campaign.

In the news today.

Are Australians in control of their finances?

Startling research from an independent survey of 1010 Australians has revealed 50% aren’t aware how much money they spend each month on general expenses and discretionary spending.

Further, more than half (57%) don’t know their credit score, and 42% aren’t aware of their credit card interest rate.

These statistics may be surprising to the more financially minded among us, given this month marked the 10th consecutive cash rate rise since May last year.

Research from the University of Newcastle published late last year revealed only 2 in 3 Australians can be classed as financially literate.

“Only around one in four people answered all five financial literacy questions correctly,” Lead author of the report, University of Newcastle Business School researcher Professor Boedker said.

“With rising living costs and high interest rates, the importance of having higher levels of financial literacy, backed up by financial planning activities such as having a household budget or setting longer-term savings goals, is as important as ever, as it leads to greater financial wellbeing.”

Licensed financial adviser and Money.com.au spokesperson Helen Baker is concerned by this lack of financial comprehension.

“We’ve noticed that despite the current squeeze on our finances, Aussies aren’t changing their way of living too drastically,” Baker said.

“By not knowing how much they’re spending, and what bills need to be paid, what we call ‘lifestyle creep’ can occur.

“You continue living as normal, without noticing bills and interest rates are increasing and by the time you notice the consequences may have snowballed. That’s why getting ahead of the game is so important.”

The Federal Government’s MoneySmart program is a great place to start if you feel the need to gain greater control of your finances.

Consumer and business confidence looking bleak

While many Australians aren’t directly on top of their finances, the data seems to indicate they are feeling the squeeze, nonetheless.

Westpac and NAB released their consumer sentiment and business confidence reports today, revealing both business confidence and consumer sentiment is very much in the negative.

“Two popular measures of consumer sentiment and business confidence were released today, with both pointing to bleaker measures of confidence in the outlook,” CreditorWatch chief economist Anneke Thompson said.

“Westpac Consumer confidence remain at near recessionary levels, while NABs Business Confidence survey fell below the long run average, and is at its lowest level since November 2022.

“However, Business Conditions remain high and remain above average.

“These survey results both suggest that businesses, particularly smaller businesses providing discretionary goods or services, will face slowing demand moving forward.

“Coming off a time of strong economic activity in the post-lockdown months of 2022, this is not altogether unexpected.

“However, as the slowing demand coincides with higher costs of goods and borrowing, it presents a particularly challenging set of circumstances for businesses.”

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