The ASX rallied marginally over the week, gaining 0.81% after setting a new 20-day-low last Friday.
Materials (+4.43%) and Information Technology (3.81%) dragged the index into the green, with most other sectors finishing fairly flat or down.
Utilities (-2.44%) and Consumer Staples (-1.61%) took the largest hits, but losses from those sectors were outstripped by Materials' and Info Tech’s gains.
Most other indexes enjoyed a similar uptick, with only the Hang Seng shedding points – dropping a full 1.00% – while the Nikkei 225 jumped 2.06%.
Commodities were a mixed bag; platinum (+7.72%), palladium (+6.46%), silver (+4.15%) and copper (+4.13%) gained the most, as Zinc took a 3.29% hit.
Crude oil continued last week’s slide, with Brent falling 4.6% during the week and West Texas Intermediate shedding 4.21%.
Brent Crude now sits just 1.47% above last year’s peak of US$82.610 a barrel, at US$83.83 per barrel.
Fixed-rate mortgage time bomb due by end 2023
While the Reserve Bank has continued to argue most Aussie households are in a strong enough financial position to service their mortgages, a ticking time bomb of $158 billion in fixed-rate loan expirations is set to go off by Christmas 2023.
An analysis of ABS statistics by Finder.com has revealed repayments could increase by as much as $10,872 a year on average once fixed terms expire.
“The fixed interest ‘cliff’ is a very scary prospect for a lot of borrowers,” Finder head of consumer research Graham Cooke said.
“Hundreds of thousands of Aussies will be hard hit, with many facing mortgage stress if they aren’t adequately prepared.
“This is a very significant spike in repayments that many will simply not be able to afford.”
Finder has offered some strategic tips to prepare for mortgage stress:
- assess your monthly spending and reduce expenses for unused subscriptions etc.;
- make a budget and stick to it;
- start a side gig to increase income;
- downsize your car, offload any valuables you no longer need;
- refinance your mortgage with a lower interest rate; and
- downsize your primary residence to reduce your mortgage.
“Very few Aussies have the emergency funds they need to handle a monthly rise of this proportion – and rate increases may not be over yet,” Cooke said.
RBA Governor flags slower interest rate rises
The Reserve Bank of Australia’s Governor Philip Lowe stated the RBA’s board expects interest rates to rise further – although at a slower pace – this year in a speech to the Anika Foundation yesterday.
“'High inflation is a scourge. It damages our standard of living, creates additional uncertainty for households and businesses, erodes the value of people’s savings and adds to inequality,” Governor Lowe said.
“This increase in interest rates – from what was a historically low level – is to ensure that the current period of high inflation is only temporary and that a more sustainable balance between demand and supply is established.
“The board expects that further increases in interest rates will be required over the months ahead ... We are conscious that there are lags in the operation of monetary policy and that interest rates have increased very quickly.
“And we recognise that, all else equal, the case for a slower pace of increase in interest rates becomes stronger as the level of the cash rate rises.”
Governor Lowe’s speech follows five consecutive monthly interest rate rises that lifted the cash rate to its highest point since 2015 in an effort to tackle blow-out inflation, which is expected to peak at 7.75% in the December quarter.
Younger Australians the most reluctant to return to office work full-time
As life during a pandemic continues to normalise – for good or bad – and businesses attempt to make use of CBD corporate leases, workers are being asked to return to the office in greater and greater numbers.
Young people appear to be the biggest resistors to the return to ‘normalcy’, a report from Automatic Data Processing Inc (NASDAQ:ADP) has revealed.
The ADP Research Institute surveyed 32,924 workers in 17 countries around the world to generate the People at Work 2022: A Global Workforce View report.
The data revealed that more than half (54%) of 18-24-year-olds and a hair below two-thirds (65%) of those 25-34 years old would consider looking for a new job if they were required to return to the workplace full time.
Some 46% of those 45-54 years old and 27% of those 55 and over said the same, indicating that the remote mode of work is likely here to stay.
“After experiencing extended lockdowns in many states, remote and flexible working has become an expectation for many Australians,” ADP Australia and New Zealand managing director Kylie Baullo said.
“Returning to in-person work full time is a daunting proposition for workers, particularly the younger generations, and companies should consider their future workplace arrangements.
Baullo argues that businesses should consider not only where employees prefer to work, but also how they work most effectively.
“To ensure career opportunities are not missed, businesses will need to consider how to entice staff to work in-person, as well as provide a balanced workplace by also meeting the needs and wants of staff through flexible options,” Baullo stated.
Small cap wins of the week
Anson Resources hits new all-time high, surging 40%
Anson Resources Ltd (ASX:ASN) hit a record share price high over the week, gaining 47.46% in one day after revealing the results of a definitive feasibility study for the Paradox Lithium Brine Project.
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St George Mining jumps 33.3%
St George Mining Ltd (ASX:SGQ) identified lithium potential at its Mt Alexander Nickel-Copper-PGE Project in Western Australia with rock chip sampling of pegmatite outcroppings returning anomalous lithium, caesium, tantalum and rubidium values.
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Hawsons Iron climbs 29.1%
Hawsons Iron Ltd (ASX:HIO) has received ‘impact-assessed major project’ status from the South Australian government for its namesake magnetite project, reflecting the asset’s importance to the state.
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Lake Resources up 19.0%
Lake Resources NL (ASX:LKE, OTCQB:LLKKF) climbed 19% over the last five days, after tapping David Dickson as new CEO and managing director. Dickson is expected to help fast-track the development of LKE’s production goals in the Americas.
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