The S&P/ASX200 is up today, gaining 48.40 points or 0.71% to 6,829.10, but one good day couldn’t disguise the bigger picture – the ASX had a pretty tumultuous October, sliding by 3.8% to record its worst month of 2023.
Over the last five days, the index has lost 0.43% and 2.18% over the last 52 weeks.
In late afternoon trade Real Estate was the biggest intraday winner by sector, up 1.66%, while Materials (1.03%) and Health Care (0.99%) were also in the green, among others. Utilities and Consumer Staples were the only two sectors to lose ground during the day, registering -0.53% and -0.29% respectively.
What will the RBA do next?
The traditional Cup Day rates announcement is on the horizon, and unlike the charmingly unpredictable horse race, the bets are very much on the table for a 0.25% hike come Tuesday, despite the what commentators think is a poor longer-term outlook.
eToro market analyst Josh Gilbert had this to say:
“The ASX’s recent losses stem from global geopolitical tensions and rising yields, but more importantly, the expectation that Australia is set to see higher interest rates still.
“An upside surprise in inflation last week, an extremely tight labour market and stronger-than-expected retail sales figures this week will likely compel the RBA to hike rates to 4.35% on Tuesday next week.
“To put the icing on the cake, data from Core Logic revealed yesterday that house prices were on track to reach record levels by November. The worry for investors is if we see the RBA take a more aggressive stance than markets are pricing.
“Another hike may be priced in, but two further hikes certainly aren’t. If data stalls, this puts a hawkish RBA very much back in play.
“China’s recovery tripped again yesterday after the official manufacturing PMI data came in below expectations. The data shows that China’s economy needs the support that Xi Jinping handed down last week, with additional sovereign debt and raising the budget deficit ratio.
“These measures won’t be instant and will take time to pay off, but the recent data more than justifies the additional support. The Caixin manufacturing PMI will be handed down today, as well as services PMIs on Friday, which will give further signals on the nation’s economy.”
The five at five
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On your six
Rio Tinto looks to repurpose disused Pilbara mines into solar farms
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