As expected, the ASX is trading down today.
The S&P/ASX200 is down just 6.70 points to 7,071.30. Over the last five days, the index has gained 1.19%, but is down 5.01% for the last year to date.
The bottom performing stocks so far in this index are Boral Ltd, down 41.35%, and ARB Corporation Ltd, down 5.22%.
As for morning trading, News Corp (NASDAQ:NWS) Ltd was 5.6% higher on better-than-expected results, while REA Group Ltd jumped 5% after better-than-expected results and guidance.
“REA Group delivered an exceptional first half result as the business continued to successfully navigate the impacts of the global pandemic,” REA Group chief executive Owen Wilson said.
“As anticipated, the removal of COVID restrictions saw a wave of new listings on realestate.com.au, with sellers making up for the time lost in lockdown and taking advantage of the significant buyer demand. Combined with record take up of our premium listing products in Residential and Commercial, we delivered very pleasing revenue growth.”
The Materials sector was weakest, with BHP and RIO down about 2%, Fortescue down 1% and, as noted above, Boral down 40% after trading ex-dividend and ex-capital return.
The best and worst performing sectors this week?
The best performing sectors this week were Energy and Utilities, both up over 3%, followed by Consumer Discretionary, over 2% higher.
The worst performing sectors include Information Technology, which is just in the red, followed by Financials and Consumer Staples, both just in the green for the week so far.
The best performers in the S&P/ASX top 100 stocks include Mineral Resources Limited, Fortescue Metals Metals Group Ltd and QBE Insurance Group Ltd, all up over 8% followed by Orica Ltd (ASX:ORI), ResMed CDI (NYSE:CDI), Computershare Ltd and The Star Entertainment Group Ltd, all up over 6%.
The worst performing stocks include Ansell Limited down over 17% followed by Brambles (ASX:BXB) Limited down over 5% and Commonwealth Bank of Australia (ASX:CBA) down over 2%.
What the RBA said today
The Reserve Bank of Australia (RBA) expects CPI inflation to peak at 3.75% in June.
This would be a major increase on its previous forecast of 2.75%.
In today’s Monetary Policy Statement, the central bank also expects trimmed mean inflation to surpass its inflation target of 2 to 3% in June, forecasting it to hit 3.25%.
It is expected to remain at 2.75% until June 2024.
The Statement, published today, shows that CPI inflation will decrease to 3.25% in December, before tapering out to 2.75% through till June 2024.
Inflation was higher than the RBA expected, driven by fuel prices increasing by 6.6% in the December quarter, contributing 0.22 percentage points to headline inflation.
During 2021, fuel prices rose by 32% – the largest annual increase since 1990.
"Fuel prices have increased a little further since the beginning of 2022, and at current levels would make another positive contribution to quarterly headline inflation in the March quarter," the RBA said.
The RBA also expects GDP growth to peak in June instead of December this year.
This is due to the economy rebounding and unemployment falling.
Forecasts are for GDP growth to hit 5% in June instead of the 4% previously expected, while in 2023, the RBA is expecting GDP growth to be 2.25% in June before winding out at 2% for December 2023 and June 2024.
This revised down from 3.25% in June 2023 and 2.25 per cent in December 2023.
Alan Joyce likens WA to North Korea
Qantas CEO Alan Joyce has not minced his words in his assessment of the WA government.
Joyce blasted the McGowan government for its ongoing border closures and described premier Mark McGowan’s approach as backward and lacking common sense.
"You can't even travel around your own country and there's not a plan in WA for when that's going to open up. It's starting to look like North Korea," Joyce told 3AW on Friday morning.
"When you look at the details of it, we have higher per capita cases of COVID than a lot of these countries … I don't get the logic," he says.
What's next for the Australian share market?
As we do each Friday we check in with Wealth Within founder and senior analyst Dale Gillham to get his take on what to expect in the market.
“After falling 11.62% between January 5 and 27, the All Ordinaries Index has been more positive this week rising around 1.5%.
“So, is the down move over or can we expect more downside?
“The answer to this question is currently unconfirmed given that a few days of trading in any direction is not confirmation that a new trend is unfolding, which unfortunately is when investors tend to jump into stocks or markets too early only to get burnt.
“While the stock market did trade down very close to my target level for the fall, my position is to always err on the side of caution and assume that there are further falls to come. I say this because markets and stocks will always move in the opposite direction to the prevailing trend for short periods of time.
“Given this, I still believe it is possible that the All Ordinaries Index could fall below 7,000 points and may fall to as low as 6,800 points over the next few weeks. That said, investors should be getting excited, as I believe once we can confirm the low our market will perform very well this year.”
On the small cap front
- Aldoro Resources Ltd (ASX:ARN) is 8.33% higher. Aldoro Resources moves closer to mineral resource estimate after further drilling at Niobe
- Lithium Australia NL (ASX:LIT, OTC:LMMFF) is 4.35% higher. Lithium Australia agrees terms for acquisition of final 10% of Envirostream Australia
- Kingston Resources Ltd (ASX:KSN) is 3.45% higher. Kingston Resources advances mining activities following completion of SPP
- Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:). is 1.53% higher. Piedmont Lithium outlines busy 2022, progressing towards final investment decision for Carolina Lithium Project