ASX closes on record high, US Fed signals upcoming rate cut — as it happened (2024)

• ASX 200: +0.28% to 8,114 points (Thursday close)
• Australian dollar: -0.23% at 65.27 US cents
• S&P 500: +1.6% to 5,522 points
• Nasdaq: +2.6% to 17,599 points
• FTSE: +1.1% to 8,367 points
• EuroStoxx: +0.8% to 512 points
• Spot gold: -0.1% to $US2,446/ounce
• Brent crude: +0.69% to $US81.52/barrel
• Iron ore: +1.39% to $US102.5/tonne
• Bitcoin: -0.58% to $US64,193

Price current around 4:30pm AEDT

Live updates on the major ASX indices:

That's it for today. Thanks for joining us.

We'll be back tomorrow for the last day of the trading week.

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Top five best individual stocks:

• Zip Co: +5.24% to $2.01
• Life360 Inc: +4.77% to $17.35
• Sandfire Resources: +4.48% to $9.09
• Pilbara Minerals: 4.44% to $3.06
• HMC Capital: 3.87% to $8.05

Worst five individual stocks:

• RED 5 Limited: -5.13% to $0.37
• Credit Corp Group: -4.94% to $16.56
• Monadelphous Group: -4.93% to $12.33
• Audinate Group: -3.43% to $14.36
• Nickel Industries: -2.92% to $0.83

Every sector made gains today, except financial stocks.

The value of stocks in the real estate sector rose by 1.76%, while energy stocks gained 1.08%.

Australia's ASX200 index closed at all-time high today, for the second session in a row.

Buoyed by yesterday's inflation figures, which showed a small decline in underlying inflation in the June quarter, investors pushed the index up to 8,148.7 points in the first 20 minutes of trading this morning, and by the closing bell six hours later at 4pm, the index had settled at 8,114.7 points—a record closing high.

As per Reuters:

Markets abandoned the possibility of a rate hike from the Reserve Bank of Australia (RBA) next week after core inflationsurprised traders on the downside.

This sent equities rallying on optimism that the RBA's next move would be a rate cut, although not before November.

Markets now imply a 44% chance of a rate cut in November, with odds of a quarter-point easing at 76% for December. The central bank meeting is widely expected to deliver a pause on August 6.

"Investor optimism is absolutely on the right track ... because Australia was in danger of decoupling from the rest of the world and this [inflation data] certainly put it back on the right path," said Jun Bei Liu, portfolio manager at Tribeca Investment Partners.

Trading on the ASX has closed for the day, and the ASX200 index has ended the day 22.4 points higher, up 0.28%, to 8,114.7 points.

The Senate's Rural and Regional Affairs and Transport Reference Committeeis calling for the plannedshutdown of Telstra's and Optus' 3G networksto be delayed.

Telstra's 3G closure is scheduled for August 31, 2024, with Optus' to begin in September 2024.

You can check to see if your mobile will be impacted by the shutdown by SMS'ing 3 to 3498 (that's right, just that 4-digit number).

Coalition senators Matthew Canavan andGerard Rennick has sent around a press release explaining why they'd like the shutdown of the 3G network to be delayed until more work is done to figure out how many devices could be impacted (including non-phone devices).

"We've asked for Minister Rowland to meet with Telstra and Optus to extend the date for the shutdown of their 3G networks until we know the full impact and everything is done to ensure that we don't see large unintended consequences," Senator Canavan said in the statement.

"If they fail to agree to that, we've recommended that the Minister use her powers to ensure that a delay occurs. The 3G spectrum is a public asset and we must make sure that it is managed with the public interest of all Australians in mind.

"While the impending shutdown of the 3G network has been known about for up to 5 years, it has only been in recent months that its full ramifications have been revealed. Our Senate committee heard evidence that up to 1 million devices (both phones and non-phones) could be impacted."

You can read the committee's interim report below:

How's it going where you live?

Up to 300 jobs could be cut at Albemarle's Kemerton plant near Bunbury after the company scaled back construction plans amid lower commodity prices.

The US-based lithium giant says it has made significant changes to the operating footprint at its Kemerton lithium hydroxide conversion site in Western Australia's South West region.

The company has announced it will stop construction of the third production train at the plant, in addition to placing the second train into care and maintenance.

See more in this story from Michael Philipps, Chela Williams and Nadia Mitsopoulos:

Abhijit Surya from Capital Economics has circulated a note on CoreLogic's recent property price data.

He says Australian house prices gained a bit of momentum in July, but leading indicators continue to suggest that the housing market will "cool markedly" in coming months.

"There are some early signs of housing demand softening," he says.

"Home sales fell for a second consecutive month in May, the latest month for which broadly reliable data are available. CoreLogic estimates suggest that they will have continued to slide in June and July.

"And while new listings have recently been tracking sideways, they remain above their long-run average.

"As a result,our sales-to-new listings ratio points to a continued moderation in annual house price growth."

See the chart below.

He says it's also worth noting that thetime taken to sell a house once it's been listed has picked up sharply relative to a year ago, consistent with a marked deceleration in house price growth in the months ahead.

He says admittedly, mortgage finance commitments were still rising by a solid 18% year-on-year in May.

However, with affordability the most stretched it's been since the early 1990s, we don't think the strength in housing credit can last, he says.

"And even if the housing market proves more resilient than we're currently predicting, it will do little to support activity in the near term," he says.

"Indeed, we learnt just this week that building approvals fell anew in June, consistent with a further decline in dwellings investment over the rest of the year."

The Fair Work Ombudsman says it has recovered more than $58,000 for 121 underpaid food outlet employees in south-east Melbourne, following surprise inspections.

The underpayments were discovered following the regulator's investigations of 32 food businesses, mostly “cheap eats” venues in:

• Bentleigh
• Bentleigh East
• Carnegie
• Glen Huntly
• Caulfield
• Caulfield East
• Elsternwick, and
• Clayton

The FWO says 26 of the 32 businesses (81%) it investigated had breached workplace laws.

The most common breaches were underpaying minimum wages for ordinary hours (19 businesses), underpaying various penalty rates (16 businesses), and not keeping accurate time records (eight businesses).

The highest amount recovered from one of the Melbourne businesses was $13,071 for four casual fast food workers who were paid flat rates below the award minimum for all hours worked.

“The high rate of breaches of workplace laws in south-east Melbourne’s fast food, restaurants and cafés sector is disappointing, and consistent with our findings in the sector nationwide,” Fair Work Ombudsman Anna Booth said.

“Employers must follow all wage laws, including paying minimum wages, which have recently increased.Those doing the wrong thing are being found out and held to account.

The FWO says improving compliance in the fast food, restaurants and cafés sector is a continuing priority, with the other priority sectors being aged care services, agriculture, building and construction, disability support services, large corporates and universities.

We're almost two-thirds of the way through the trading day, and the ASX200 index is up 0.54%.

RateCity has looked at the latest monthly banking statistics from the Australian Prudential Regulation Authority (APRA).

It notes that money in the bank from households (deposits) has fallen for the first time in a year, down $11.5 billion in June.

It's just the second drop in household deposits since the start of the Reserve Bank's rate hikes back in May 2022.

"Deposits" from households include term deposits, transaction accounts, mortgage offset accounts and savings accounts on the books of authorised deposit-taking institutions (ADIs).

However, RateCity also thinks that decline in household deposits is likely to be a blip, rather than a trend, despite cost-of-living measures.

It expects that, in July at least, we'll also see households banking a lot of the money they received from their latest tax returns and the Government's Stage 3 tax cuts:

"Since March 2019, there have just been five instances where the total money in the bank has fallen, and three of them were in the month of June (drops were June 2019, November 2019, May 2021, June 2023 and June 2024).

"July, however, is typically a bumper month for deposits.

"While many people are struggling to make ends meet under the ever-growing cost-of-living pressures, household deposits are likely to rise in the next set of APRA data for July 2024, as people put the money they get back from their tax returns and the stage three tax cuts in the bank for safekeeping.

The chart below shows the five monthly declines in household deposits since mid 2019:

After yesterday's data showing "trimmed mean" or underlying inflation fell slightly in the June quarter, from an annual rate of 4% to 3.9%, Deutsche Bank economist Phil O'Donaghoe says he's now changing his forecasts for interest rates.

"The softer quarterly trimmed mean pick necessitates a change in our call," he says.

"We now expect the RBA to keep policy on hold in August and for the next change in rates to be a cut in Q2-2025.

He says Australia's underlying inflation in the June quarter was a bit softer than he expected.

And he says even though that 3.9% annual rate for trimmed mean inflation in the June quarter was above the RBA's most recent forecast of 3.8%, he doesn't think it was enough of a forecast miss by the RBA to prompt a rate hike, so he now reckons the RBA will keep rates on hold next week.

MrO'Donaghoe then spends a bit of time explaining why his own forecast was off the mark.

But he also raises questions about the usefulness of the ABS's still relatively new and experimental monthly inflation indicator, which has contributed a lot of information noise to the debate in recent months.

"There are serious questions to be asked about the usefulness of the monthly CPI indicator, especially the extent to which anyone can rely on the monthly trimmed mean pick," he says.

"That's the lesson for forecasters (including us)."

Thanks Alex,

For anyone who's interested, this summary of Victoria's property tax changes, from Rigby Cook Lawyers, is useful to understand what Alex is referring to.

The Bureau of Statistics has released data showing what happened to export prices and import prices in the June quarter.

• Export prices fell 5.9% in the quarter, and 5.7% through the year.
• Import prices rose 1% in the quarter, and 1.1% through the year.

For export prices, the main contributors to the price falls in the June quarter were:

• Metalliferous ores and metal scrap (-9%),as ongoing weakness in the Chinese construction sector drove lower demand for iron ore for steel manufacturing,
• Coal, co*ke and briquettes (-12.7%), driven by a fall in global demand for metallurgical coal, an input into steel manufacturing, and
• Gas, natural and manufactured (-7.8%), as oil indexed contracts reflect lower oil price levels from late 2023 and early 2024.

However, the increase in gold prices offset those price declines a little.

The ABS says gold prices rose 12.1% as high gold demand from central banks, and ongoing economic uncertainty caused by global conflicts, drove gold prices to record high levels.

For import prices, the main contributors to the price rises in the June quarter were:

• Gold (again) (+12.4%), for the same reasons - high gold demand from central banks, and ongoing economic uncertainty caused by global conflicts, drove gold prices to record high levels
• Petroleum, petroleum products and related materials (+1.1%), driven by increased demand in the US, and OPEC+ nations extending production cuts.

Regarding the CoreLogic property price data..

CBA senior economist Belinda Allen has circulated a note with some insightful graphs in it.

According to CoreLogic, home prices across Australia's eight capital cities rose by 0.5% in July, which was the same as in June, but there's divergence across those cities.

Three capital cities recorded price falls in July: Hobart (-0.5%), Melbourne (-0.4%) and Darwin (-0.2%). Ms Allen says Melbourne, in particular, is dealing with unique factors including land tax changesand the fact thatbuilding approvals have held up in Victoria.

The graph below shows the differential in dwelling price growth across our different cities right now:

And take a lot at this next graph.

It shows the different rates of growth in dwelling prices for lower value home prices (lowest 25% in value), the middle quartiles (between 25% and 75%), and the upper quartile (most expensive 25%).

Ms Allen says lower value home prices are "significantly outperforming" the most expensive homes at the moment, with rates of annual growth well above 10%.

That's not something we've typically seen in the last 10 years, but it's easy to understand why it's happening right now.

And then there's this graph.

It shows that, despite the recent slowdown in prices in Sydney, and falls in Melbourne and Hobart, the question of affordability is a different matter.

"Sydney remains well above other capital cities in terms of lack of affordability while Brisbane, Adelaide and Perth continue to deteriorate," Ms Allen says.

For anyone who can't read the smallprint in that graph, it's showing the per cent of pre-tax income that's directed towards a mortgage.

Office Space.

Not just a cult film but a key economic indicator.

New data from the Property Council has interesting news about office vacancies.

The commercial real estate (CRE) sector has been struggling since COVID sent people home from the office. Many people discovered it was easier to not commute across our large cities, causing employers to reassess the amount of space they hold.

These lines tell the story.

The new data shows the vacancy rate in Australian offices has tightened, with more than half of capital city CBDs recording a vacancy decrease

The July 2024 Office Market Report has CBD vacancy is 13.6% and non-CBD vacancy is at 17.2%.

The CBD rates is pretty stable, marginally increasing from 13.5 to 13.6 per cent nationally. Non-CBD areas saw a fall from 17.9 to 17.2 per cent.

(This tallies with previous data that has shown higher vacancy rates in non-CBD areas like St Kilda Road in Melbourne and Parramatta Road in Sydney).

It's still different across the nation, Melbourne having the highest rate of office vacancies.

Most people know the frustration dealing with banks and insurances companies when they have a gripe about their treatment.

A new report from the Australian Financial Complaint Authority will ring a few bells because it shows financial complaints rise by 9 percent to 105,000 in the last financial year.

The biggest gripes are about the way banks and insurance companies deal with customers, highlighting "cookie cutter" responses where customers are left in the dark.

But the surge in complaints has been driven by the prevalence of scams which rose by 81 percent.

AFCA's chief operating office Justin Untersteiner spoke with the ABC's senior business correspondent Peter Ryan.

The Australian sharemarket has opened higher, after a tech rally on Wall Street overnight.

The ASX 200 was up 56 points or 0.7 per cent by 10:15am AEDT, with education and mining stocks leading the gains.

At the same time the Australian dollar was up by 0.1 per cet to 65.45 US cents.

As you can see from the chart below, only a handful of stocks are trading in the red at open.