The Australian share market has finished higher for the fourth session in a row, boosted by energy stocks, industrials, consumer firms and tech.
Investors are awaiting the latest inflation figures, due out on Wednesday, which will confirm if the cost of living has reached the Reserve Bank of Australia's forecast of 8 per cent over the year to December.
Disclaimer: this blog is not intended as investment advice.
Live updates
Market snapshot at 4:20pm AEDT
By Sue Lannin
ASX 200 index: 7,457 up 0.1 per cent
All Ordinaries: 7,674 up 0.1 per cent
Australian dollar: 69.80 US cents up 0.2 per cent
Nikkei 225: 26,905 up 1.3 per cent
Dow Jones: 33,375 up 1 per cent
S&P 500: 3,973 up 1.9 per cent
Nasdaq Composite: 11,140 up 2.7 per cent
Brent crude: $US87.36 down 0.3 per cent
Spot gold: $US1927.15 an ounce steady
Iron ore: $US126.10 up 1.9 per cent
Bitcoin: $US22,737 up 1.9 per cent
That's all folks
By Sue Lannin
Thanks for joining me today on the ABC Markets blog.
It was a bit of a topsy turvy day, but the ASX rose again.
Everyone is waiting for the December quarter inflation figures to see what the RBA will do next month.
Have a great evening.
ASX closes higher for fourth trading session in a row
By Sue Lannin
ASX top movers
By Sue Lannin
The ASX closed higher today with more sectors gaining despite a volatile day of trade.
Industrials did the best, with oil and gas firms, and tech also driving the market, while miners fell back.
The ASX 200 is up 6 per cent so far this year, after losing just over 5 per cent of its value last year.
116 stocks rose, 13 were steady, and 71 fell.
ASX takes a breather
By Sue Lannin
The Australian market has eked out a small gain after a day of choppy trade.
The ASX has rallied strongly over the first few weeks of the new year to the highest since last April on hopes that global inflation is peaking and the Fed and RBA will pull back the pace of their interest rate rises.
The benchmark index has closed up nearly 0.1 per cent after being in and out of the red today.
Most sectors ended higher led by industrials, energy stocks and tech.
Oil and gas firm Karoon Energy (+7.4 per cent) surged after it increased its oil reserve estimates in Brazil.
Nickel miners Core Lithium (+6.9 per cent) and Liontown Resource (+6.4 per cent) also rose.
Also surging was book seller Booktopia (+34.2 per cent) after it said it would raise prices and cut staff to rein in costs.
And buy now, pay later firm Sezzle (+39 per cent) also jumped after it made its second monthly profit in a row in December amid higher revenue.
Meanwhile, cement maker Adbri lost 2.7 per cent and medical device maker Fisher & Paykel Healthcare fell 2.8 per cent.
Ramelius Resources (-0.9 per cent) fell after deferring a gold mine expansion, and miner South32 rose 1.1 per cent after it saw higher quarterly coking coal, copper, aluminium, and manganese production.
Chinese markets were closed for the Lunar New Year Holiday, while the Nikkei 225 index in Japan rose 1.3 per cent.
UBS predicts RBA could pause rate rises in March
By Sue Lannin
We heard earlier that the CBA has cut its inflation forecasts, and so too has UBS.
It now thinks inflation will peak at 7.6 per cent over the December quarter, down from its previous forecast of 8 per cent.
The Reserve Bank sees an annual inflation of 8 per cent over the year to December.
UBS economist George Tharenou predicts inflation will come in at 1.7 per cent for the December quarter and by 7.6 per cent over the year driven by rents, electricity, and holiday travel and accommodation.
7.6 per cent annual inflation would be the highest level since 1990.
Mr Tharenou is expecting the RBA to raise rates by 0.25 per cent next month, but cut its inflation forecast ahead of a pause in rate hikes in March.
"In February, we still expect the RBA to hike 0.25 per cent to a peak of 3.35 per cent, but to soften their forward guidance."
"The key upside risk to our view on CPI and rates remains the minimum (and award) wage decision in June 2023 being linked (again) to CPI."
"This could force the RBA to lift rates further in mid-23, despite sharply slower growth seeing rising unemployment."
Deloitte warns of Australian recession
By Sue Lannin
Deloitte Access Economics says the economic outlook for 2023 is in the hands of global central banks after the sharpest inflation surge in four decades saw substantial, synchronised interest rate rises in most advanced economies.
Deloitte predicts that Australia's economic growth will slow sharply from 3.6 per cent last year to just 1.7 per cent in 2023 amid high inflation and high interest rates.
Deloitte Access Economics Partner Stephen Smith is the lead author on its latest Business Outlook report, and he says there is a risk of a recession in Australia this year amid high inflation, high interest rates, falling home prices, low consumer confidence and wages going backwards.
He says there is a real risk of recession in Australia this year and it all depends on the Reserve Bank.
"Any further increases in the cash rate beyond the current 3.1 per cent could unnecessarily tip Australia into recession in 2023," Mr Smith said.
" On the Reserve Bank’s own figuring, mortgage repayments, including principal and interest, are already on track to rise to a record high as a share of household disposable income over coming months."
“At the same time, real household disposable income per capita – a key measure of prosperity – is falling, and will finish the current financial year at levels last seen before the onset of the pandemic."
"There is an Everest of evidence to suggest interest rates should stay on hold from here."
"Will that evidence be enough? Australians are indeed at the mercy of the RBA in 2023."
Franklin Templeton says rate hikes are not "transitory tightening"
By Sue Lannin
This an interesting note from Sonal Desai, chief investment officer, at Franklin Templeton Fixed Income.
Ms Desai thinks markets are too optimistic in thinking that global inflation will peak soon and therefore central banks will go back to a world of very low interest rates.
Bond investors are betting that the chance of a recession in the US because of the Fed's steep rate rises, will see the US central bank rapidly decrease rates to stop the economy going into freefall.
She says the fall in US consumer prices (-0.1 per cent) in December "solidified" the view that the Fed's steep rate rises are working.
However, she warns it is not "mission accomplished" just yet, and central banks have likely changed their approach to inflation permanently.
Ms Desai points out that the US labour market is strong with 3.5 per cent unemployment, wage growth is elevated with employers having to give hefty pay rises to retain workers and government stimulus remains high, which is boosting spending.
She therefore thinks the Federal Reserve will raise official US interest rates to 5 to 5.25 per cent and keep them there for some time, which is also the view of some Fed officials.
"The recent inflation surge will not result in hyperinflation or even in a 1970s-style inflation spiral, but it will make central bankers much more sensitive to the risk of entrenched higher inflation," Ms Desai writes.
"Central bankers now understand that prolonged loose monetary policy contributed to a multi-year inflation overshoot that they have not yet brought back under control. "
"You can see it in statements from monetary policymakers in both the Fed and the European Central Bank."
"As a consequence, as the economy slows and possibly dips into contraction, central banks will not rush to pull all stops, driving rates to zero and launching a new stage of quantitative easing."
"I think they will instead limit themselves to more traditionally sized rate cuts."
Super goes backwards
By Sue Lannin
Last year's share market volatility took a bite out of retirement earnings.
Both the ASX 200 and the All Ordinaries index went backwards for the year, although US stock markets fared much worse.
SuperRatings says funds with a median balanced growth option made a 4.8 per cent loss for 2022, the fourth annual loss in 22 years.
That's a fund which invests in a diversified portfolio of higher risk assets like shares, moderate risk assets such as property and lower risk assets such as cash.
SuperRatings says falls in property prices and international shares, and low returns for cash, weighed on superannuation fund balances.
However, superannuation has done well over the long term, with a 6.1 per cent average return since 2000.
The best performing funds were Perpetual's Perpetual Balanced Growth Fund with a return in 2022 of 1.7 per cent and First Super's balanced fund, which eked out a small return of 0.1 per cent.
Over the past ten years, industry funds Hostplus (+9.1 per cent) and Australian Super (-8.8 per cent) have provided the best annual returns.
Hostplus' balanced option lost 2. 5 per cent in 2022, and Australian Super's balanced investment option lost 4.8 per cent.
ASX 200 index movers at midday
By Sue Lannin
It's a lacklustre day of trade with investors taking a breather, although stocks are trading around a 9 month high.
This year's rally has seen the market rally to just 2.3 per cent of its 12 month high and close in on its record peak.
The ASX 200 has lost its early gains with 6 out of 11 sectors lower.
Consumer firms and miners are among the sectors that are weaker, while industrials, energy, tech and financials are holding up.
Land tax versus stamp duty
By Sue Lannin
New South Wales has brought in a controversial policy allowing first home buyers to chose between paying land tax or stamp duty.
But my colleague Michael Janda argues the policy retains the worst elements of stamp duty and risks pushing up already expensive home prices.
"The reason this may push up prices even more is that it comes with no ongoing tax obligation."
"However, the most economically infuriating aspect of the NSW government's "First Home Buyer Choice" policy, as it's been branded, is inherent in its name — it only applies to first home buyers."
ASX in the red
By Sue Lannin
The ASX has lost its early gains.
At 11:20am, the All Ordinaries index is down 0.2 per cent to 7,638.
Most sectors are now lower, led down by real estate firms, consumer stocks, miners and healthcare.
Going up are industrial firms, technology and oil and gas companies.
Book seller Booktopia (+22 per cent) and Sezzle ( have sizzled on the market today.
Booktopia jumped after it said it would save $4 to 5 million by restructuring the company, and laying off 30 to 40 workers.
It will increase prices to offset increasing costs and to improve profit margins, including charging for postage.
Sezzle made a profit for the second month in a row with net income of $US1.8 million.
Net quarterly income rose 0.5 per cent per cent to $US0.5 million, compared to a net loss of $US25.91 million in the fourth quarter of 2021.
While pharmaceutical company Mayne Pharma (-7.5 per cent) and cloud software firm Symbio Holdings (7.2 per cent) are taking a hit.
South32 hit by shipping delays
By Sue Lannin
Shipping delays are continuing to hurt trade around the world, and miner South32 has also been caught up.
In its quarterly report, the miner says shipping log jams in southern Africa have caused a buildup of inventory, which has hurt cash flow.
South32, which was spun off from BHP, mines coking coal, aluminium, copper, silver, zinc and manganese.
Production was mixed over the half year, and the company finalised a new pay deal for workers at its Appin coal mine in the Illawarra in New South Wales.
But delayed shipments, mainly of aluminium, tied up an extra $US100 ($143 milion) million of working capital over the six months to the end of December.
South32 shares rose 0.7 per cent to $4.60 in morning trade.
Ramelius Resources says inflation delays gold mine expansion
By Sue Lannin
Ramelius Resources' shares have dropped today after it postponed the expansion of its Edna May gold mine in Western Australia as inflation drives up the fees charged by mining contractors.
"Operating and capital costs well outweigh the gold price, reducing return on project to a level below Ramelius' internal hurdle," the company told the ASX.
"As a result, and after board deliberation, the stage 3 open pit has been deferred on economic grounds."
"Environmental permitting work will continue to allow for a quick restart in any lower cost/higher gold price environment in the future."
ASX top movers
By Sue Lannin
Here are the top movers on the ASX 200.
ASX in the green
By Sue Lannin
The Australian market has opened higher as investors hope that inflation won't be high as the Reserve Bank is forecasting.
The ASX 200 is up one fifth of a per cent in the first 15 minutes of trade.
Most sectors are higher led by industrials, energy firms and technology.
Financials are also doing well, while miners are flat.
Doing the best in the ASX 200 index is payments firm Block (+6.4 per cent, while gold miner Ramelius Resources (-1.4 per cent) is doing the worst.
128 stocks have increased, 20 stocks are flat, and 52 stocks are lower.
CBA says inflation could fall short of RBA forecasts
By Sue Lannin
The latest consumer inflation figures are out on Wednesday and the Reserve Bank will be looking closely at the numbers to decide its next move on interest rates.
It's forecasting annual inflation will reach 8 per cent over the year to December, but CBA economist Gareth Aird thinks it may not be that high.
In a note out this morning, Mr Aird predicts the cost of living will have increased by 1.7 per cent over the December quarter and by 7.7 per cent over the year.
CBA expects the Reserve Bank to raise the cash rate by 0.25 per cent next month, although some other economists, such as AMP's Diana Mousina, is tipping interest rates could stay on hold.
That's after there was a surprise loss of jobs in December, which could indicate that higher rates are starting to hurt the economy.
Mr Aird thinks inflation will have remained strong over the last few months of last year.
"We expect inflation pressures to abate relatively swiftly in 2023," he wrote.
"But the annual rate still has further to rise and we expect the peak in Q4 22 (i.e. the upcoming quarterly inflation report due to print on 25 January).
"We expect this data to show that inflation pressures remained very strong over the December quarter, albeit we think the headline data will not be as strong as the RBA’s implied profile."
" Notwithstanding, we anticipate that monetary policy will be tightened again at the February Board meeting."
" We consider our forecasts for both headline and underlying inflation to be consistent with the RBA increasing the cash rate by 25 basis points at the February board meeting."
"But it is not a done deal, particularly as the RBA has indicated they are willing to pause in the tightening cycle."
ASX set to open higher
By Sue Lannin
Good morning, welcome to the ABC's Markets blog. I'm Sue Lannin.
The Australian share market is closing on its record high from 2021 and has gained 5.9 per cent so far this year.
Wall Street rose on Friday boosted by Google owner Alphabet and streaming service Netflix.
The Dow Jones index put on 1 per cent, while the Nasdaq jumped 2.7 per cent.
Join me for all today's markets news.
