The ASX 200 has closed the week at a fresh nine-month high, shaking off a rocky night on global markets driven by increasing rate rise fears.
Follow the day's financial news and insights from our specialist business reporters on our live blog.
Disclaimer: this blog is not intended as investment advice.
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ASX ends week at 9-month high
By Stephanie Chalmers
Not a bad day for the local share market in the end, shrugging off some global gloom to finish firmly higher.
The ASX 200 gained a quarter of a per cent to close at 7,452 points, while the All Ords made a similar move higher to 7,666 points.
That puts the ASX 200 at a new nine-month high, adding to yesterday's gain, and means the index is up 5.9 per cent so far this year (which is only three weeks old, mind you) off the back of a terrible 2022.
The energy sector remained the strongest performer and was joined by the big miners, which gave the market an added boost in afternoon trade.
91 stocks on the benchmark index gained ground, while 99 fell.
The biggest gains of the session:
- Pilbara Minerals (+13.2%)
- Whitehaven Coal (+6.2%)
- Fisher & Paykel Healthcare (+4.9%)
- Sayona Mining (+4.1%)
- De Grey Mining (+4%)
And the largest losses:
- Liontown Resources (-8.3%)
- Nanosonics (-6.4%)
- Pinnacle Investment Mgmt (-3.8%)
- Challenger (-3.5%)
- Megaport (-3.5%)
Thanks for sticking with us today! Enjoy your weekend and we'll be back Monday morning.
Market snapshot at 4:15pm (AEDT)
By Stephanie Chalmers
- ASX: ASX 200 7,452.2 points +0.23%, All Ordinaries 7,666.3 points +0.23%
- Australian dollar: 69.16 US cents (+0.1%)
- Wall Street: Dow Jones -0.8%, S&P 500 -0.8%, Nasdaq -1%
- European markets: Stoxx 600 -1.6%, DAX (Germany) -1.7%, FTSE (UK) -1.1%
- Spot gold: $US1924/ ounce (-0.4%)
- Brent crude oil: $US86.14/barrel (-0.02%)
- Iron ore: $US125.6/tonne (+3.2%)
- Bitcoin: $US21,026 (+0.4%)
Fair Work Ombudsman: Super Retail employees owed 'significant amounts'
By Stephanie Chalmers
Fair Work Ombudsman Sandra Parker has told the ABC Super Retail's underpayment of workers is a "complex case".
Super Retail could face fines after the FWO launched legal action against the group behind brands including Rebel and Macpac.
The company says it has back paid workers more than $50 million to date, but Sandra Parker says the 146 employees that are the focus of the FWO's case are owed "significant amounts of money".
Watch her interview with ABC business reporter Sue Lannin here:
Stage set for Sun Cable bidding battle
By Stephanie Chalmers
Administrators of the $30 billion Sun Cable renewable energy project have held the first creditors meeting, setting out intentions to either restructure its funding arrangements or pursue a sale.
The future of the ambitious project, which proposes to supply solar energy to Darwin and then on to Singapore via an undersea cable, is in doubt after entering voluntary administration last week.
It followed an apparent disagreement between billionaire backers Andrew Forrest and Mike Cannon-Brookes over its direction and funding — Forrest's company no longer supports the cable part of the project.
At today's meeting, the administrators from FTI Consulting laid out their intention to either recapitalise or sell the company as a going concern.
They're seeking funding to keep the project afloat while they pursue a sale — setting the stage for Cannon-Brookes' Grok Ventures or Forrest's Squadron Energy, or perhaps an as-yet-unknown third party, to bid for control of Sun Cable.
"As Administrators we have looked to preserve the value of Sun Cable and keep all options for the future of the project on the table," FTI Consulting's John Park said.
"We will seek to crystalise the interest expressed in the future of Sun Cable into a firm offer for the benefit of creditors and other stakeholders via the sale process.
"Ultimately, the successful bidder will have the opportunity to take the business forward in line with their vision."
For more background on the Sun Cable saga, read this piece from ABC Darwin's Samantha Dick:
Super Retail paid back more than $50m for 'regrettable chapter'
By Stephanie Chalmers
Super Retail Group shares are down 0.4 per cent at 1:30pm, after the Fair Work Ombudsman launched legal action against the retailer.
The company behind Rebel, Super Cheap Auto and BCF could face hefty fines over staff underpayments allegedly exceeding $1 million.
The case focuses on a sample of 146 employees but the issue spans much wider, with Super Retail having already repaid more than $50 million.
In a statement to the stock exchange, Super Retail said it had first reported the matter to the FWO in 2018 and "apologised to affected team members"
"With the assistance of expert external advisers, Super Retail Group has undertaken a comprehensive back payment program for affected team members, involving extensive calculations, assessment and review."
The company says the back payments have been "substantially completed", with more than $52.7 million in entitlements and interest returned to current and former employees.
However, the FWO is also alleging that some of the employees in its sample have only been partially back paid, due to the methodology the company used in its remediation process.
"We note the allegations in the proceedings and reiterate our view that this matter represents a regrettable chapter in our company’s history," Super Retail CEO Anthony Heraghty said.
"Since 2018 we have changed our processes to fix the issues and help to ensure team members are being paid correctly.
"We have effectively completed our detailed remediation process to back pay affected team members and have fully cooperated with the Fair Work Ombudsman's investigation."
Arts and recreation boom ending abruptly
By Michael Janda
After all the COVID lockdowns and disruptions of 2020 and 2021, arts and entertainment enjoyed a renaissance in 2022.
But the post-lockdown, let's go out and party vibe seems to be coming to a shuddering halt at the hands of surging interest rates and living costs.
An ABS report based on ATO business activity statement (BAS) data showed a 6.6 per cent slump in arts and recreation services spending in November, backing up a 3.2 per cent drop in October.
Sybille McKeown, head of industry statistics at the ABS, said that through-the-year growth for the sector peaked at 52.9 per cent in September, but has rapidly cooled to a 19.3 per cent increase through the year to November 2022.
"The positive impact from the relaxing of COVID-19 Delta lockdowns towards the end of 2021 has been replaced with declining 'discretionary' spending in the face of rising interest rates and inflation," she noted.
While we aren't spending money going out, we are still going shopping (at least for Black Friday sales) with retail turnover up 2.9 per cent, seasonally adjusted.
Other services spending, led by repairs and maintenance, jumped 9.1 per cent, while mining had a 1.2 per cent rise.
Utilities — including electricity, gas, water and waste services — fell 4.4 per cent, which the ABS attributed largely to a decline in wholesale electricity prices from recent peaks.
Overall, eight of the 13 industries covered by the report declared falling turnover, the first time that most of the industries experienced a monthly fall since January 2022.
Australian share market higher at midday
By Stephanie Chalmers
After hovering around the flatline after the open, the ASX 200 is now positive after two hours of trade.
The ASX 200 is 0.1 per cent higher at 7,443 points at 12:10pm (AEDT).
The energy sector continues to outperform, up 2.1 per cent, while the education sector has seen the biggest drop.
Looking at the biggest movers so far, the top performers on the benchmark index are:
- Pilbara Minerals (+9.7pc)
- Whitehaven Coal (+7.6pc)
- Fisher & Paykel Healthcare (+6.1pc)
- Capricorn Metals (+4.3pc)
- New Hope (+3.9pc)
On the flipside, the biggest falls of the session so far:
- Liontown Resources (-10.7pc)
- Nanosonics (-4.8pc)
- Imugene (-3.1pc)
- ARB Corp (-2.7pc)
- Challenger (-2.7pc)
Market snapshot at 12:00pm (AEDT)
By Stephanie Chalmers
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ASX: ASX 200 7,449.7 points +0.2%, All Ordinaries 7,661.9 points +0.2%
- Australian dollar: 69.1 US cents (+0.03%)
- Wall Street: Dow Jones -0.8%, S&P 500 -0.8%, Nasdaq -1%
- European markets: Stoxx 600 -1.6%, DAX (Germany) -1.7%, FTSE (UK) -1.1%
- Spot gold: $US1930/ ounce (-0.1%)
- Brent crude oil: $US86.16/barrel (flat)
- Iron ore: $US125.6/tonne (+3.2%)
- Bitcoin: $US21,045 (+0.5%)
Qantas flight turns back to Melbourne "as a precaution"
By Stephanie Chalmers
It's been a week of headaches for Qantas, after the pilot of a flight from New Zealand to Sydney issued a mayday call due to an engine failure, and a flight to Fiji turned back to Sydney "as a precaution".
Now, a plane en route to Sydney has turned back to Melbourne after pilots "received an indication of a minor engine issue".
In a statement to the ABC, Qantas said the flight returned as a precaution and customers will be moved to the next available flights in coming hours.
"[It was] Flight QF430 Melbourne to Sydney on a Boeing 737 aircraft.
"The aircraft landed normally – this was not an emergency or priority landing. Both engines remained operational throughout the flight."
Energy boost from Whitehaven Coal shares
By Stephanie Chalmers
Taking a look at how the sectors are faring at 11:25am:
In the energy sector, Whitehaven Coal is a standout, with shares up 7.2 per cent.
That's after the miner said it expects earnings for the first half of the financial year to be more than four times higher than the previous year.
The reason? Whitehaven has sold its coal for an average of $527 per tonne in the last three months of 2022, compared to $211 a year earlier.
King Charles III pledges to return wind farm gains
By Michael Janda
The British monarchy own most of the seabed around the UK, some of the most expensive land in London and city shopping centres.
It gets to keep a proportion of the "surplus revenue" (currently 15 per cent) generated by this land to fund the "Sovereign Grant".
But the amount of this revenue has surged with companies bidding big pounds to install windfarms off the UK coast.
"The leases are collectively worth almost 900 million pounds a year according to Crown Estate financial data, following a bidding frenzy among companies such as oil majors BP and Total Energies.
"A spokesperson for Buckingham Palace said King Charles's treasurer, known as the Keeper of the Privy Purse, had written to the prime minister and finance minister 'to share the King's wish that this windfall be directed for wider public good, rather than to the Sovereign Grant'."
You can read more from Reuters here:
Super Retail workers allegedly underpaid more than $1 million
By Stephanie Chalmers
The owner of Rebel, Super Cheap Auto, BCF and Macpac is being taken to court by the Fair Work Ombudsman, for allegedly underpaying workers more than $1 million.
The FWO is focusing on a sample of 146 underpaid employees, who were allegedly underpaid a total of $1.14 million for work between Januaury 2017 and March 2019.
That's an average of around $7,800 per employee in just over two years - while the largest amount owing is said to be $34,500.
It's alleging that some of the breaches are "serious contraventions" - which could attract penalties of up to $630,000 per breach.
Other contraventions could result in fines of up to $63,000 each.
The regulator says it launched the investigation into the retail group and its subsidiaries after Super Retail disclosed "widespread underpayments of thousands of employees".
Fair Work Ombudsman Sandra Parker says keeping large employers accountable is a priority.
“The breaches alleged in this case – inadequate annual salaries for employees stretching across multiple years – have become a persistent issue for businesses across many industries.
“Every employer should be clear that if annual salaries do not cover all minimum lawful entitlements for all hours actually worked, the results can be substantial back-payment bills, plus the risk of significant court-ordered penalties. Penalties can also be higher for serious contraventions.”
Market snapshot at 10:20am (AEDT)
By Stephanie Chalmers
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ASX: ASX 200 7,434.7 points -0.1%, All Ordinaries 7,647 points -0.03%
- Australian dollar: 69.2 US cents (+0.1%)
- Wall Street: Dow Jones -0.8%, S&P 500 -0.8%, Nasdaq -1%
- European markets: Stoxx 600 -1.6%, DAX (Germany) -1.7%, FTSE (UK) -1.1%
- Spot gold: $US1933.7/ ounce (+0.1%)
- Brent crude oil: $US86.38/barrel (+1.7%)
- Iron ore: $US125.6/tonne (+3.2%)
- Bitcoin: $US21,031 (+0.4%)
ASX holds ground despite Wall Street drop
By Stephanie Chalmers
The Australian share market has opened for the day and... it can't decide which way it's heading just yet.
The ASX 200 is unchanged at 7,435 points at 10:12am (AEDT).
The All Ords is off just 3 points to 7,645.
It's not a bad effort by the local market considering the US indices closed pretty substantially lower in the end.
Some of the strongest performing stocks in early trade on the ASX include gold mining and energy plays.
The banks are pretty mixed in early trade, while industrial and tech stocks are lagging.
Higher cash rate 'inconsistent with a soft landing'
By Michael Janda
The Commonwealth Bank's head of Australian economics, Gareth Aird, has just sent out his outlook for the year ahead, and it makes for sombre reading.
He believes Australia will escape a headline recession — just, with growth of just 1.1 per cent for the year to December '23— but will fall into a per capita recession this year, where population growth exceeds economic growth.
However, Aird believes it wouldn't take much to tip Australia into a technical recession of two quarters of economic contraction:
"Our economic forecasts are conditional on one final 25-basis-point increase in the cash rate in the first quarter of 2023 for a peak this cycle of 3.35%.
"We believe a higher terminal cash rate is inconsistent with a soft landing. We have 50 basis points of rate cuts in our profile for the fourth quarter of 2023."
CBA bases that forecast on an expectation that inflation peaked at 7.7 per cent in the last quarter of last year (ABS data will be out on this next Wednesday) and will fall to 3.4 per cent by late this year.
The bank's economists expect unemployment to end the year at 4.25 per cent, with ABS figures out yesterday hinting that the jobs market has probably already peaked.
CBA, Australia's biggest mortgage lender, also still believes home prices will fall 15 per cent peak-to-trough, with the market bottoming between July and September this year.
That would mean Australia is only about halfway through its biggest housing downturn on modern records.
Aird once again highlighted the lag between the RBA's most aggressive rate rises in modern history and when they hit consumer bank balances and spending:
"A dichotomy in the economic data began to open up in late 2022. Backward looking labour market data remained robust. And prices and wages data continued to strengthen. But forward looking data, which includes housing lending, building approvals, the PMIs, home prices and consumer and business sentiment deteriorated.
"Consumer spending, which is a coincident indicator, remained elevated over the festive period in nominal terms. But we anticipate growth in the volume of spending over recent months has been modest. A further softening will occur in 2023.
"The RBA has focussed a lot on the resilience in consumer spending. And that is understandable given demand for goods and services determines price outcomes (i.e. inflation). But official data on spending to date has only partially captured the impact of rate hikes.
"It takes time for rate hikes to impact home borrower cash flow and by extension spending decisions. And far more borrowers than usual are on fixed rate mortgages, which blunts the initial impact of rate rises.
"But fixed rate home borrowers in Australia are not insulated from rate hikes indefinitely. They are generally on short dated fixed rate mortgages and half of these loans will expire this year.
"As such, a significant amount of tightening lays ahead irrespective of how much higher the RBA takes the cash rate."
Netflix losing its CEO but gaining subscribers
By Stephanie Chalmers
Netflix has just announced its latest results and there's a bit going on.
One of the streaming service's co-founders, Reed Hastings, is taking a step back, giving up the chief executive role and moving to executive chairman.
It won't lead to a total overhaul at the top of Netflix, however - Ted Sarandos had already been named co-CEO in 2020, and he will now be joined by current chief operating officer Greg Peters.
In a blog post, Hastings said it was the right time to complete the succession plan that had been in the works.
"It was a baptism by fire, given Covid and recent challenges within our business.
"But they've both managed incredibly well."
Meanwhile, the actual results were better than expected.
Netflix added 7.66 million subscribers in the fourth quarter - about 3 million more than analysts had forecast.
Its shares rose in after-hours trade, after a pretty poor performance over the past year:
US Fed to 'stay the course'
By Stephanie Chalmers
While the local talk yesterday was that the Reserve Bank could ease up on hiking rates after jobs were lost from the economy in December, the chatter was different overseas.
US Federal Reserve vice chair Lael Brainard spoke overnight and indicated the Fed would continue on its current path of hiking interest rates despite some easing in price pressures.
"Inflation has declined in recent months, which is important for American households, businesses, and consumers...
"Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2 per cent on a sustained basis."
However, markets aren't buying that the Fed will continue to be as aggressive as it has been, pricing in 0.25 per cent hike in Fed's policy rate at its next meeting, compared to the bigger increases seen since May last year.
NAB's head of FX strategy Ray Attrill also found nothing in Brainard's comments to refute the market view.
"She has said nothing explicit about the market being wrong to think rates might come down before 2023 is out."
In recent weeks, Fed policy makers have been reiterating that the rate will likely settle slightly above 5 per cent but ANZ Research is tipping it to fall just shy of that.
"We remain of the view that as the economy softens, only two more 25bp rate rises are required. But it’s a fine line and the data will have an important role to play in the Fed’s late tightening cycle deliberations."
The next Fed meeting will wrap up on February 1 (US time) - while it'll be a further week before the RBA board meets again after its January hiatus.
Market snapshot at 9:05am (AEDT)
By Stephanie Chalmers
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ASX SPI futures: 7,385 points (-0.01%)
- Australian dollar: 69.1 US cents (+0.03%)
- Wall Street: Dow Jones -0.8%, S&P 500 -0.8%, Nasdaq -1%
- European markets: Stoxx 600 -1.6%, DAX (Germany) -1.7%, FTSE (UK) -1.1%
- Spot gold: $US1931/ ounce (+0.02%)
- Brent crude oil: $US86.27/barrel (+1.5%)
- Iron ore: $US125.6/tonne (+3.2%)
- Bitcoin: $US20,965 (+0.1%)
US markets slip further
By Michael Janda
Good morning and welcome to the blog.
A special treat today — two bloggers. I'll be joined by Steph Chalmers to bring you all the latest markets, business and economic news throughout the day.
It's looking like another fall, albeit a modest one, for Wall Street, with the main indices down between 0.3-0.4 per cent not far from the close.
Analysts and traders say it's because of mixed signals from the economic data.
"You've got two diametrically opposed pieces of data — one is weakening in spending data and stuff like that and on the other hand still fairly robust employment data," Peter Tuz, president of Chase Investment Counsel told Reuters.
"It's kind of like a see-saw, you don't know what the Fed is going to do in terms of raising rates again, by how much, holding them steady, so are they going to overdo it?"
ASX futures are just slightly positive, so looks like a quiet day locally, but stick with us on the blog to see what happens.
