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FIVE at FIVE AU: ASX rallies as economists weigh recession risk; Blinken meets with officials in China

Published 19/06/2023, 04:08 pm
© Reuters.  FIVE at FIVE AU: ASX rallies as economists weigh recession risk; Blinken meets with officials in China
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Contrary to expectations before the bell, the ASX has risen today. At around 2:30 this afternoon it had gained 46.10 points or 0.64% to 7,297.30, setting a new 20-day high. It closed at 38.40 points or 0.53% up to 7,289.60.

Over the last five days, the index has gained 2.35% and is currently 3.67% off of its 52-week high.

Healthcare was the best performer, with stocks rising around 2% thanks in part to a strong performance from large cap CSL Healthcare, while Consumer Staples was close behind (1.57%) on the back of strong interest in Woolworths (1.6%) and Coles (1%).

The Energy (-0.67%) and Materials (-0.51%) sectors were in the red.

Jobs data out soon

The outlook for this week remains focused on the Australian jobs market, with the latest jobs data to be released on Thursday.

In April, employment fell by 4,300 and the jobless rate rose from 3.5% to 3.7%. The keen attention on these figures stems from a view that the jobs figures are usually the last domino to fall in the recession game.

With our friends across the ditch in New Zealand entering a technical recession – defined by two quarters of negative growth – there is growing acceptance among economists that we’re next, with the odds now even, or better, that we’re about to enter a recession.

Weakening figures on that front may point the way to not only the Reserve Bank’s next move but our proximity to economic stagnation.

The RBA is among several to use the unemployment figures to define a recession ahead of movements in GDP.

Will Blinken meet Xi?

Meanwhile, eyes will be on the world’s two biggest economies with US Secretary of State Antony Blinken in Beijing for high-level meetings aimed at stabilising relations.

Blinken wrapped up a meeting with China's top diplomat, Wang Yi, with both sides entering talks aimed at improving their strained relationship, which has been exacerbated by China's close ties with Russia and US efforts to restrict advanced technology sales to China.

It remains to be seen whether Blinken will now meet the Chinese leader Xi Jinping during the visit.

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