ANZ and Macquarie bring in record profits. Australian shares bounce back in the wake of US market falling on the back of growing concerns about the banking sector.
See how the day unfolded on the ABC News live markets blog.
Disclaimer: This blog is not intended as investment advice.
Key events
Live updates
Market snapshot at 4:40pm AEST
By Michael Janda
ASX 200: +0.4% to 7,220 points
All Ordinaries: +0.3% to 7,413 points
Australian dollar: +0.7% to 67.38 US cents
Dow Jones: -0.9% to 33,127 points
S&P 500: -0.7% to 4,061 points
Nasdaq: -0.5% to 11,966 points
FTSE: -1.1% to 7,702 points
EuroStoxx: -0.5% to 460 points
DAX: -0.5% 15,734 points
Spot gold: -0.2% to $US2,046/ounce
Brent crude: +1.3% to $US73.47/barrel
Iron ore: -2.4% to $US98.85/tonne
Bitcoin: +1.2% to $US29,216
That's all from us for today and the week
By Michael Janda
Hold onto your hats as US regulators try and sort out that nation's troubled banking sector, with reputable analysts estimating that half of US banks may be technically insolvent at current asset values.
Kate Ainsworth will be with you on Monday to take you through Federal Budget Eve.
Biggest winners and losers
By Michael Janda
The five biggest gains on the ASX 200 were:
- BrainChip Holdings: +8.9% to $0.43
- Syrah Resources: +7.4% to $1.015
- Inghams Group: +4.6% to $2.96
- Lake Resources: +4.2% to $0.50
- Pilbara Minerals: +4% to $4.40
The five biggest losses on the benchmark index:
- Virgin Money UK: -5.5% to $2.75
- Coronado Global Resources: -4.6% to $1.575
- Life 360: -3.4% to $5.07
- Silver Lake Resources: -3.3% to $1.175
- Whitehaven Coal: -3% to $6.80
Market extends modest gains into close
By Michael Janda
The ASX 200 has snapped a three-day losing streak, finishing moderately higher as banks bounced back, despite ongoing, and deepening, concerns about their US counterparts.
The benchmark index closed 0.4% higher at 7,220, while the broader All Ordinaries gained 0.3% to 7,413 points.
Real estate was the standout sector, gaining 2%, while industrials posted a 1.1% rise.
Academic and education services was the biggest loser (-0.6%) along with consumer cyclicals (-0.4%).
The big banks generally had a positive day, led by ANZ (+1.5% to $23.80) on a well received profit result.
NAB was the exception, losing another half a per cent to $26.58 as investors continue to steer clear after its profit disappointment yesterday.
The markets are still fragile though, and the outlook for next week will depend on how things go with struggling US banks tonight and over the weekend.
You can read more about that situation from my colleague David Taylor.
Is the global rate-hiking cycle near its peak?
By Gareth Hutchens
Westpac's economics team has just circulated a note that clarifies their thoughts on how the global economy is faring right now.
They think the global interest rates tightening cycle that began in 2022 is now "at or very near its peak."
Their evidence:
- The US FOMC has established a conditional pause following this month’s 25bp hike.
- The RBA has adopted a softer tightening bias.
- The European Central Bank, Bank of England, and the Reserve Bank of New Zealand are all expected to follow suit after making final 25bp hikes at their next meetings.
They say in all those cases, pausing rate hikes is still highly conditional on the flow of data, the evolution of inflation, and how economic growth and labour market conditions feed into things.
But it feels like we're close to the top.
Budget special: next week
By Gareth Hutchens
The Business will have a budget special program on Tuesday evening next week at 9.30pm AEST.
It will run for half an hour and be packed with budget news relating to business and economics.
Refinancing hits fresh record high
By Gareth Hutchens
As Australian households try to avoid rising interest rates, the value of refinanced mortgages has hit another record high.
New data from the Bureau of Statistics today show $21.2 billion worth of loans were refinanced in March.
It was $1.3 billion more than the previous record in February.
Ratecity says since the start of the hikes (May 2022) a total of $206.86 billion worth of loans have been refinanced.
ASX bounces back after trading lower this morning
By Rhiana Whitson
After trading lower, the local share market is bouncing back.
Eight of the 11 sectors are now in the green. Real estate, utilities, consumer staples and banks are leading the way, while tech consumer discretionary and energy are in the red.
Stocks with the biggest gains and declines are below:
ANZ and Macquarie both posted record profits today. However, it's been mixed reaction from investors, ANZ stocks are up 1.8 per cent, and Macquarie Group is down 0.3 per cent.
A tiny budget surplus for the Albanese government?
By Gareth Hutchens
The economist Abhijit Surya, from Capital Economics, has put out a small note this afternoon that covers off a couple of issues ahead of next week's federal budget.
He says over the last 12 months, the underlying cash balance has already shifted into a small surplus, which means the Albanese government’s projection for a fiscal deficit of 1.5% of GDP in 2022/23 won't come to fruition.
"With the state coffers sitting healthy, [Treasurer] Chalmers should have enough room to continue with budget repair, even as he seeks to provide cost-of-living relief to the poorest Australians," he's written.
"Reports that the government plans to cap spending in the NDIS and curb increases of other welfare benefits bode well for expenditure restraint.
"However, with a looming slowdown driving up pressures for counter-cyclical spending, we still expect the underlying cash balance to shift to a deficit of 0.2% of GDP in 2023/24, from a surplus of 0.4% of GDP in 2022/23," he said.
Man who pocketed nearly $500k from ATO fraud jailed for nine years
By Gareth Hutchens
A man who pocketed nearly half a million dollars through the Plutus Payroll tax fraud has been sentenced to a maximum of nine years in prison.
A judge today found Patrick Willmott, a school friend of one of the architects of the conspiracy, Adam Cranston, knowingly took part in deceiving the tax office for two years.
A lengthy trial in the NSW Supreme Court heard the Australian Tax Office (ATO) lost out on $105 million as a result of the fraud before it was shut down in 2017.
During Willmott's involvement, between April 2014 and May 2016, more than $31 million that should have gone to the tax office was instead diverted to the co-conspirators, and his own direct financial benefit was $498,272.
Willmott received a maximum sentence of nine years with a non-parole period of six years, which will expire in 2029.
See more of the story here:
RBA takes another swipe at the "profit-inflation" argument
By Gareth Hutchens
The RBA has dedicated an entire chapter in this edition of the SOMP to the question of profits and inflation.
It's already taken a few swipes at the argument that excessive profit-taking in the COVID era has contributed to some of this inflation.
And today it's returned to the argument again, with a chapter titled: "Have Business Profits Contributed to Inflation?"
And as a friend said to me, the short answer is Betteridge's Law.
I'll say off the bat that, having reported on this issue, different schools of economists rely on different datasets, and interpretations of those datasets, to make their arguments.
And according to the RBA's data, changes in domestic profit margins have not been a significant independent cause of the increase in aggregate CPI inflation in recent years.
"For example, outside of the mining sector – where output prices reflect the balance of demand and supply in global markets – aggregate profits have grown at a similar pace to labour income, with some variation between non-mining sectors," the RBA says.
"At the firm level, there has been little change in the distribution of margins.
"These observations are consistent with firms having generally passed on higher costs to maintain their profit margins, and aggregate inflation having been driven by the balance of demand and supply factors – rather than changes in firms’ pricing power," it says.
Here are some of the graphs it's included in the chapter:
Market snapshot at 12:45pm
By Rhiana Whitson
ASX 200: +0.2% to 7,205 points
All Ordinaries: +0.1% to 7,397 points
Australian dollar: Flat at 66.92 US cents
Dow Jones: -0.9% to 33,127 points
S&P 500: -0.7% to 4,061 points
Nasdaq: -0.5% to 11,966 points
FTSE: -1.1% to 7,702 points
EuroStoxx: -0.5% to 460 points
DAX: -0.5% 15,734 points
Spot gold: Flat at $US2,056/ounce
Brent crude: +0.1% to $US72.58/barrel
Iron ore: -2.4% to $US98.85/tonne
Bitcoin: +1.1% at $US28,902
Causes of inflation
By Gareth Hutchens
The RBA's statement on monetary policy has some useful graphs that show which goods have contributed to this inflation with large price rises.
New forecasts
By Gareth Hutchens
You can see the RBA's latest forecasts in this table.
In each row, they have their new forecasts in the top line, and their previous forecasts underneath in parentheses.
RBA's latest economic forecasts: growth and wages
By Gareth Hutchens
My colleague Michael Janda has a summary of the RBA's latest economic outlook.
He says the outlook brings both bad and good news for Australians.
The bad news is that the economy is much weaker, and households suffering much more, than the RBA forecast three months ago.
But the good news is that this drop in real household incomes and consumer spending means inflation is coming down slightly faster than the bank previously expected.
Before that story's posted online, here's some of the details.
Near-term economic forecasts:
- The RBA says economic growth over the year to June is now expected to be just 1.7 per cent, more than half-a-percentage-point lower than was forecast just three months ago.
- Things don't improve before the end of this year, with growth of just 1.2 per cent expected over the year to December, down from a previous forecast of 1.6 per cent.
Wages won't grow as much as expected:
After much hand-wringing about the risk of a prices-wages spiral, the RBA has once again dialled back its forecasts of wages growth over the next two years.
It forecasts Australian workers to receive average annual wage rises topping out at 4 per cent by the end of the year, before growth falls back again to 3.7 per cent over the year to June 2025.
The broader measure of average earnings per hour — which includes bonuses, promotions and other factors excluded from the Wage Price Index — has seen an even larger cut to its forecasts, as employers report having less trouble finding workers to fill vacancies.
The RBA's own business liaison suggests that, "Reported wages growth has stabilised and expectations for wages growth in the next 12 months have moderated."
"Contacts report their wages growth has stabilised at around 4 per cent, but expect growth to moderate in the near term."
Reserve Bank statement on monetary policy
By Gareth Hutchens
The RBA's latest quarterly statement on monetary policy has just been released.
Here are the chapters for this edition:
RBA's rate hikes creating inflation, Ross Garnaut says, calling for radical overhaul of economic policy
By Rhiana Whitson
Australia's economy has become increasingly dominated by powerful firms that are extracting "economic rents" from the system, economist Ross Garnaut is warning.
I recommend getting stuck into this write up of Ross Garnaut's 2023 Bannerman Competition Lecture in Sydney on Wednesday evening from ABC News business reporter Gareth Hutchens.
ASX 200 at 10:30am
By Rhiana Whitson
The ASX is trading lower on Friday.
Ten of the 11 sectors are in the red. Banks, tech, miners and tech were the biggest drags. Utilities was the only sector in the green.
Here's a quick look at top and bottom stocks:
Market snapshot at 10:15am
By Rhiana Whitson
ASX 200: -0.2% to 7,176 points
All Ordinaries: -0.1% to 7,371 points
Australian dollar: Flat at 66.92 US cents
Dow Jones: -0.9% to 33,127 points
S&P 500: -0.7% to 4,061 points
Nasdaq: -0.5% to 11,966 points
FTSE: -1.1% to 7,702 points
EuroStoxx: -0.5% to 460 points
DAX: -0.5% 15,734 points
Spot gold: Flat at $US2,056/ounce
Brent crude: +0.1% to $US72.58/barrel
Iron ore: -2.4% to $US98.85/tonne
Bitcoin: +1.1% at $US28,902
Global banking fears grow
By Rhiana Whitson
ABC senior business correspondent Peter Ryan unpacks the latest US banking woes as contagion fears grow.
