The ASX will finish flat after a rollercoaster of a day, having spiked to 7,307 points and bottomed out at 7,292 before finding it’s resting place at 7,302 points, up just 4.3 points.
It was a rough day for resources, with the Energy sector taking a 2.59% hit, Industrials down 0.70% and Materials mostly flat at a 0.22% lift.
The other side of the market fared better. Info Tech gained 0.87%, Communications Services 1.24% and Utilities netted a 0.57% lift.
Commodities were mixed. Palladium dropped 1.85% but gold lifted 1.36%. Aluminium (+1.02%), tin (+0.98%), lead (+0.48%) and west Texas crude oil (+0.48%) all lifted as silver, platinum, copper, nickel and zinc weathered marginal losses or finished flat.
The top-performing stocks today were Brainchip Holdings Ltd, up 8.33%, and IGO Ltd, up 5.61%.
Inflation continues to ease
CreditorWatch chief economist Anneke Thompson explores the latest for the Australian economy in terms of CPI, inflation and retail trade data.
“The Australian economy ticked along steadily over the course of August,” Thompson wrote.
“Retail trade increased very slightly, although on an inflation-adjusted basis, spending continues to fall.
“Monthly inflation maintained its downward trajectory, with prices increasing by 4.7% over the year to July 2023, down from 5.7% over the year to June 2023.
“Monthly CPI data continues to show an easing of price rises in most categories in the CPI basket.
“The exceptions, however, are rents, which rose by 7.6% over the year to July, up from 7.3% in June. Electricity prices also rose by a substantial 15.7% over the year to July.
“This increase even considers the Energy Bill Relief Fund. If this had not been included, monthly the increase in electricity bills would have risen by 19.2%, instead of 6.0%.
“Food and beverage prices continue to ease, thanks to better growing conditions. There was even a fall of 5.4% in the overall price of fresh food and vegetables.
“However, meals out and takeaway food inflation remains steady and largely reflects the needs of business owners to pass on higher utility and rent costs on to their patrons.
“Overall, inflation is moving in the right direction and is unlikely to give the RBA any reason to increase rates at the September meeting.”
Retail turnover slows
“July’s retail trade figures revealed a small increase in spending over the month, predominantly in the Goods sector,” Thompson highlighted.
“However, this follows negative growth in June 2023, and in year-on-year terms, seasonally adjusted retail trade grew by just 2.1%, versus 2.3% in June 2023. Retail turnover is now growing more slowly than in 2019, the last year for pre-COVID data, and also a time when pricing growth was very subdued.
“The department store category recorded the highest monthly growth, at 3.6%. Some of the larger discount department stores (DDS) such as Big W, did report in their annual earnings calls that they were noticing a trend of new consumers shopping in their stores, as they downshift to a cheaper product.
“Household goods spending within DDS’ is still very subdued but health and beauty is showing resilience.
“Interestingly, food retailing was flat, which may be because of some pricing moderation in the fresh food category.”
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