The ASX 200 gained 0.41% today to close at 8,020.8 points with 10 of the 11 GICS sectors ending the session higher. The Energy sector led the way, followed by Utilities and Tech.
Financials were also strong as CBA hit a new all-time high, reaching more than $145 per share. With a market cap of more than $240 billion, CBA is now the most expensive bank in the world. Macquarie also logged a fresh high of more than $228 per share intraday.
However, brokers are concerned about the lofty valuations of the Aussie banks and are warning their clients to sell — Citi has advised clients to sell out of the big four. Yet UBS points out that stretched valuations are not unique to Australian banks. Global banks are up 40% from their lows in last October, thanks to a dovish pivot from the US Federal Reserve and growing optimism about a soft economic landing.
Business confidence drops
The latest monthly business survey from National Australia Bank has revealed a significant decline in business confidence during August.
Business confidence slipped into negative territory during the month while business conditions also fell but remain positive for now.
NAB economists attributed the decline in business conditions primarily to a drop in employment.
Meanwhile, retail employers are already recruiting for Christmas despite subdued retail conditions. According to Asia-Pacific economist at global job site Indeed, Callam Pickering, Christmas job postings on the site are on par with last year.
Pickering said, "This optimism from retailers is surprising given the challenges facing the retail industry.
"While higher prices continue to drive up retail spending, retail volumes have declined for the past two years, down 0.6% over the past year and 2.0% from their peak in June 2022. In other words, retailers are pushing fewer goods out the door, typically leading to reduced staffing needs.
"However, the disconnect between current retail conditions and Christmas hiring can perhaps be explained by the fact that many retailers are still operating with fewer employees than desired. The job vacancy rate across the industry (2.2% of all jobs) is still 65% above its pre-pandemic average.
"Even with reduced sales, the industry still needs more workers to support widespread hiring in the lead-up to Christmas.”
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