Breaking News
Investing Pro 0
New Year’s SALE: Up to 40% OFF InvestingPro+ CLAIM OFFER

FIVE at FIVE AU: China in lockdown again, but for how long? What will CPI reading be?

Stock Markets Nov 28, 2022 17:00
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FIVE at FIVE AU: China in lockdown again, but for how long? What will CPI reading be?
 
ASXFY
+0.05%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Dan is back for another four years in Victoria. The Aussies won their first World Cup match in 12 years. It’s AFL draft time and the ASX is lower today.

The S&P/ASX200 closed lower Monday, dropping 30.40 points or 0.42% to 7,229.10 after setting a new 100-day high. Over the last five days, the index has gained 1.26% but is down 2.89% for the last year to date.

Bottom-performing stocks in this index were Healius Ltd and Liontown Resources (ASX:LTR) Ltd, down 9.79% and 7.50% respectively.

Looking at the sectors, Energy was the biggest loser down 1.69%, followed by Materials which lost 1.02%. Communications Services was the best performed up 0.73%. Real Estate was the next best performer rising 0.59%.

Three things to watch for the week ahead

Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia next week.

1. Australian Monthly CPI

Australia’s recently introduced monthly CPI reading is released on Wednesday (Nov 30), giving investors another look under the hood of inflation. Last month saw a reading of 7.3%, the highest in decades, but estimates have another hot print of 7.5%, moving closer to the RBA’s peak estimate of 8% by the end of the year.

Unfortunately for the RBA, last week’s unemployment rate and recent higher-than-expected wage growth haven’t helped the bank's inflation headache.

Although inflation is rising, the pressures are coming from high commodity prices on fuel and construction costs, and rising food prices.

These look like short-term price shocks that could reverse in the months ahead, particularly with oil prices already falling by 15% in the last three months.

Australia currently has lower inflation than the United States and most major EU regions. This makes the RBA's task of containing high inflation without triggering a recession less challenging when compared to, say, the US.

A hotter reading would likely point towards another 25bps move in December, but a number lower than 7.5% could see another move lower from the RBA.

2. Retail Sales Data

So far in 2022, the Australian consumer has remained resilient in the face of soaring inflation and rising interest rates but the key question is how long this can continue.

On Monday (Nov 28), retail sales data will be released and is expected to show another month of gains at 0.5%. This would mean a 10th consecutive month of gains as households continue to spend, supporting the RBA’s view that householders are in a solid position to weather higher borrowing costs.

Last month’s reading showed strength from clothing and footwear, up 2%, while eating out was also at the top of Aussies' list, with cafes, restaurants and takeaway services up 1.3%.

Spending patterns are being monitored closely by the RBA to see if their consecutive rate hikes are cooling demand. However, given elevated household savings from the pandemic and growing incomes, the belt-tightening narrative is yet to be shown in spending data.

3. China Zero COVID

Despite COVID being in the rear mirror for most nations, China this week recorded its highest-ever daily case number of 29,754, with major cities entering into lockdowns. But, times could be changing with the government looking to boost its struggling economy with plans to offer financial aid to rescue its property sector.

This week, the state council agreed to a ‘RRR’ cut, which means cutting the amount of cash banks keep in reserve. However, this would likely be a short-term boost and the real hurdle lies in ending its Zero COVID Policy to bolster economic growth once again.

Chinese stocks are some of the worst performing this year, with the CSI 300 down 23% and the Hang Seng down 24.5%. This latest news will likely mean further volatility into next week, but a shift in policy to re-prioritise economic growth could open up opportunities for investors, as these assets are cheap and under-owned given the current risks.

Five at five

International Graphite has Collie graphite pilot processing plant ribbon cut by WA Premier and Minister

International Graphite Ltd (ASX:IG6)’s new graphite pilot plant processing facility – one of the first in Australia – was officially opened in Collie on Friday by West Australian Premier Mark McGowan and Minister for Regional Development Alannah MacTiernan.

Read more | Watch

Anteris Technologies higher as DurAVR™ transcatheter heart valve system receives FDA tick for early feasibility study

Anteris Technologies Ltd (ASX:AVR, OTC:AMEUF) is trading higher on news that the US Food and Drug Administration (FDA) has conditionally approved the DurAVR™ transcatheter heart valve (THV) system for investigational device exemption (IDE) application to kick off an early feasibility study (EFS).

Read more

Eclipse Metals buoyed by early REE indications from maiden Greenland project drilling

Eclipse Metals Ltd (ASX:EPM) is encouraged by early rare earth element (REE) results from a maiden percussion drilling and trench sampling program at the Ivigtût and Grønnedal targets within its southwest Greenland multi-commodity project.

Read more

Emyria joins NIH HEAL initiative to evaluate ultra-pure cannabinoid formulations

Emyria Ltd (ASX:EMD) has been accepted into the US National Institute of Health’s (NIH) Preclinical Screening Platform for Pain program.

Read more

Queensland Pacific Metals positive feasibility study confirms TECH Project credentials

Queensland Pacific Metals Ltd (ASX:QPM) has wrapped up its advanced feasibility study for Stage 1 of the TECH Project in North Queensland, which will produce nickel and cobalt for the EV and energy storage industries, and a scoping study for the Stage 2 expansion of the project.

Read more

On your six

ESG reporting falls to the wayside amid geopolitical and economic challenges: KPMG

Environmental, social and governance (ESG) matters have slipped down the priority list of ASX 200 companies amid geopolitical and economic challenges, according to a new report from KPMG.

Read more

The one to watch

OzAurum Resources welcomes more high-grade gold at Mulgabbie North

OzAurum Resources Ltd (ASX:OZM) CEO Andrew Pumphrey discusses further high-grade gold results from diamond drill holes recently completed at the flagship Mulgabbie North Project in the Eastern Goldfields of Western Australia.

Read more

Read more on Proactive Investors AU

Disclaimer

FIVE at FIVE AU: China in lockdown again, but for how long? What will CPI reading be?
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email