The Australian share market has closed with moderate losses, with the ASX200 and All Ordinaries falling by more than half a per cent.
See how the trading day unfolded on our markets blog.
Disclaimer: This blog is not intended as investment advice.
Key events
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Market snapshot
By Emily Stewart
This is where the share market finished at the close of local trade shortly after 4:00pm AEDT.
- ASX 200: -0.64% to 7,204
- All Ords: -0.65% to 7,390
- Aussie dollar: 68.28 US cents
- On Wall St: Dow -0.4%, S&P 500 -0.6% , Nasdaq -0.8%
- In Europe: Stoxx 600 flat, FTSE flat, DAX -0.2%
- Spot gold: -0.9% at $US1,791 an ounce
- Brent crude: -0.8% at $US82.04 a barrel
- Iron ore: -0.2% to $US109.23 a tonne
- Bitcoin: -0.64% at $US17,714
ASX ended the day lower
By Emily Stewart
The Australian share market has closed with moderate losses, led by the basic materials and consumer cyclicals sectors.
Mining companies had the biggest falls, with Pilbara Minerals down more than 11 per cent, followed by Core Lithium at -9.5 per cent.
Vitamin and supplement company Blackmores was the top performer, closing up 7.5 per cent.
Well, that's it from me today!
The blog will be back early tomorrow morning to cover all the market action.
Do join us.
Qantas will increase capacity by next March
By Emily Stewart
Qantas says it will add another 57 return services per week between Sydney, Melbourne and Brisbane by March next year.
It means capacity on those routes will be back to 93 per cent of pre-COVID levels.
The airline will also add seats on its transcontinental services to and from Perth using the airline's Airbus A330 fleet.
Qantas chief customer officer Markus Svensson says with its operational performance effectively back to pre-pandemic levels, it hopes customers will begin to use their COVID credits.
"Our systems were never designed to unwind literally millions of bookings due to a pandemic and there have been some obvious challenges for us and for customers that we've worked hard to fix."
Almost 900,000 customers still have travel credits left over from the pandemic, worth a total of $600 million.
Copper prices likely to rise soon
By Emily Stewart
Analysts say the spot copper price is likely to break through $US8,500 in the near term.
CBA's Vivek Dhar says there are three important factors supporting copper prices at the moment.
"A weaker US dollar, a relaxation of China's COVID-zero policy and supply disruption concerns."
Here's a chart showing the copper spot prices over the past three years.
Jobs numbers likely to bake in further interest rate rises
By Michael Janda
Finally from me, for an overseas take on Australia's latest jobs numbers, this from Rabobank's global strategist, the delightfully cynical Michael Every.
"Aussie jobs data were up 64K vs. 19K expected with a surge in the participation rate, which means the RBA are running out of excuses to keep pretending that they are a special case who doesn't have to raise rates as much as the others.
"The pain of mortgage resets from low fixed-rate deals is only just beginning: so is the RBA's dilemma."
A less dramatic, but similar, interpretation from jobs website Indeed's Asia-Pacific economist Callam Pickering, who once worked at the Reserve Bank.
"For monetary policy, this jobs report confirms that the demand for workers hasn't deteriorated at all since the RBA began hiking rates in May.
"If Australian businesses were genuinely concerned about the economic outlook and the impact of high inflation and rising interest rates then we'd expect them to pull back on their hiring and start to cut staff.
"We expect that the Reserve Bank will continue hiking rates next year, probably twice in the first half of the year, with the outlook further out highly uncertain.
"There is good reason to expect a deterioration in economic conditions next year, driven by the household sector, which would impact monetary policy."
ICYMI: hear from CBA's chief economist about the latest job figures
By Emily Stewart
ABC business reporter Sue Lannin speaks to CBA's chief economist Stephen Halmarick about today's jobs figures.
Return of international students boosts employment
By Michael Janda
Back again with some more analysis on the jobs numbers, courtesy of some bank economists.
JP Morgan's Ben Jarman points out that population growth is now back above pre-COVID levels, thanks to a recent surge in net overseas migration, especially from international students.
That directly added nearly 60,000 young people to the ABS employment estimates through upwards revisions based on the latest population data.
"The fact that the above dynamic is skewed to the lower end of the age distribution is also likely to help shortages in sectors where vacancies are highest, which have tended to be: lower average wage level industries; those more reliant on population inflow; and those with a higher share of wage determination in collective bargaining agreements."
This is obviously good for employers who have been struggling to find enough staff, and good for the economy in the sense that the Reserve Bank may not have to lift interest rates as high as it would if wages growth was a lot stronger.
However, as CBA's Belinda Allen points out, the growing population combined with a record participation rate means that Australia's economy has to keep churning out extra jobs at a breakneck pace just to stop unemployment rising.
"Today's data suggests the labour market is not tightening further with supply meeting demand.
"The fact that supply is being met is good news for businesses who have struggled with labour shortages in recent times.
"Job vacancies are also trending lower and the number of applicants per job is also rising.
"As the facing chart shows the lift in labour supply means the number of jobs required each month to keep the unemployment rate steady is also rising. It now sits at ~25k.
"As we noted last month, the message from the labour force survey has been very consistent over the last six months.
"The unemployment rate remains at a low and the labour market is tight, but not tightening further."
Read more from myself and Rachel Pupazzoni here:
ASIC to sue Finder Wallet, a subsidiary of comparison website Finder.com
By Emily Stewart
ASIC has commenced civil penalty proceedings in the Federal Court against Finder Wallet, for allegedly providing unlicensed financial services.
The market regulator claims Finder Wallet offered a product called Finder Earn between February and November this year, which essentially acted as a debenture.
Customers deposited Australian dollars into their accounts which were converted to 'stablecoin'. Finder Wallet then used this money as its own working capital, paying customers a return of 4-6 per cent.
ASIC deputy chair Sarah Court says the company was providing a financial product and should have had a financial services licence.
"Issuers of financial products such as debentures must issue appropriate risk disclosure documents and develop appropriate target market determinations to ensure customers are not sold inappropriate products. We allege Finder Wallet failed to do this, potentially putting their customers at risk of harm."
Ms Court says it's the third recent action against a firm offering a crypto-related asset that the regulator considers to be a financial product.
"Our message to industry is clear - just because an offer involves a crypto-asset related product does not guarantee it will fall outside the current regulatory regime."
ASX up slightly on jobs figures
By Emily Stewart
The Australian share market is still trading lower than yesterday's close, despite lifting slightly after the better than expected jobs figures.
The benchmark ASX 200 index was down -0.17 per cent to 7,238 points at 12:30pm AEDT, the All Ordinaries was down a similar amount to 7,422.
The decline was driven by basic materials, healthcare and consumer cyclicals.
Academic and educational services was the best performing sector at midday, up 1.46 per cent.
The biggest moving company on the ASX200 was coal miner New Hope Corporation, up almost 5 per cent on a share buyback.
The biggest loser on the ASX200 was lithium miner Pilbara Minerals, down more 9.45 per cent to $4.12.
Here are the ten top and worst performing stock at lunch time.
ANZ's chief executive says the impact of cost of living pressures can't be overemphasised
By Emily Stewart
ANZ's annual general meeting is underway.
Chief executive Shayne Elliott has addressed the meeting of shareholders saying some in the community are doing it tough.
"Those with less secure employment, those who possibly bought home right at the peak of the cycle, those more exposed to cost of living increases, or those who have suffered other shocks like family breakdown or illness."
He says the ANZ has kept in place additional hardship resources it put in place during the pandemic.
Unemployment numbers surprise with massive jobs gain
By Michael Janda
Australia's unemployment rate remains steady at 3.4 per cent, despite the shock addition of 64,000 extra jobs over the past month.
The reason is because more of us are willing and able to work right now.
The Bureau of Statistics figures show the so-called "participation rate" returned to a record high of 66.8 per cent in November.
More people entering the labour force meant you needed those 64,000 extra jobs just to stop the number of unemployed from rising.
The increase in people looking for work is good news for the economy, according to David Bassanese.
"One factor supporting benign wage growth – contrary to the situation in the United States – is a strong rebound in labour supply, with more working-age Australians displaying a strong willingness to actively look for work.
"The rebound in immigration over the coming year should also help lessen lingering labour shortages in critical areas.
"If wage growth can remain benign, Australia faces a vary good chance of getting away with only a soft landing in 2023, even if the US economy tumbles into recession."
The increase in Australians looking for work might relieve some pressure on employers who, according to separate ABS stats for the September quarter, have a record number of jobs sitting vacant.
Rachel Pupazzoni spoke to a couple of employers who've been struggling to find workers as part of our story on the unemployment numbers, which you can read here:
US interest rates to plunge in 2024, 2025, Westpac forecasts
By Michael Janda
Good morning, I'm just jumping in for a couple of guest posts on the latest economic news.
The US Federal Reserve slowed its pace of interest rate increases to 0.5 of a percentage point to 4.25-4.5 per cent early this morning, but is still expecting rates to peak above 5 per cent.
The Fed committee members see rates staying at that level until late next year and only easing back to just above 4 per cent by late 2024.
But Westpac senior economist Elliot Clarke strongly disagrees.
The bank is forecasting inflation to subside rapidly, along with the US economy, allowing the Fed to cut rates to 2.75-3 per cent by the end of 2024 and 2-2.25 per cent by the end of 2025.
"Fed fund rate cuts however cannot come until the Committee believe inflation will sustainably return to the 2.0%yr target, and this is unlikely before 2024.
"Although, if we are right in expecting inflation to print near 2.0%yr through 2024 and beyond, the FOMC can cut aggressively in 2024 and 2025 back to a broadly neutral level.
"By June 2025, we see the fed funds rate at 2.125%, 275 basis points lower than our peak forecast and 300bps below that of the FOMC.
"Clearly, if inflation risks sustain, cuts could come later and/or at a slower place."
ASX opens lower
By Emily Stewart
The ASX 200 has started the day lower after falls on Wall St overnight.
The benchmark index opened down 0.6 per cent, to 7,207 at 10.20am AEDT.
The materials (-1%), consumer cyclical (-0.9%) and technology (-0.75%) sectors led the losses.
Here are some of the top and bottom movers at the open.
Woolworths to acquire stake in pet food retailer
By Emily Stewart
Grocery giant Woolworths has acquired a 55 per cent stake in Petspiration Group, the owner of the PETstock brand.
The investment will cost $586 million and will be funded by proceeds from the recent sale of Woolworth's interest in Endeavour Group.
Woolworths Group CEO Brad Banducci said specialty pet is a large and growing retail segment.
"Specialty pet is a logical adjacency given the high penetration of pet ownership across Australia and New Zealand."
Petspiration's founders Shane and David Young will retain a 45 per cent equity stake and continue running the business.
ASX responds to ASIC and RBA's requests
By Emily Stewart
The market operator has agreed to the requirements set out by ASIC and the RBA regarding its payments system.
ASX Managing Director Helen Lofthouse says maintaining the stability and high performance of the current CHESS system is an ASX priority.
"With the enhancements we have made to the system's capacity and resilience in recent years, and the investments that we will continue to make, ASX is confident that current CHESS will serve the Australian market into the future."
It will also make a version of the special report publicly available.
ASIC and Reserve Bank take action over ASX payments system
By Emily Stewart
ASIC has issued a notice to the ASX over its CHESS clearing and settlements system.
The ASX had planned on replacing its trading system CHESS with blockchain-based technology, but last month the plan was scrapped after repeated delays.
"This is the first time ASIC has used this delegated power against an operator of licensed market infrastructure for the purposes of auditing the support and maintenance of a clearing and settlement system," the market regulator said.
The Reserve Bank also issued a letter of expectations to the ASX.
"The RBA expects the highest priority be given to ensuring the stability and resilience of the critical infrastructure supporting Australia's cash equity markets," said Governor Philip Lowe.
The ASX will have to produce a special report which will be audited by Ernst and Young.
Australia's energy regulator says electricity market isn't working as it should
By Emily Stewart
The Australian Energy Regulator says supply issues don't explain all the price increases in the wholesale market this year.
"We do have some evidence that suggests generators have been withholding some of their capacity to drive up prices," said Clare Savage, Chair of the Australian Energy Regulator.
In June, the market operator took the unprecedented step of suspending the national spot market after generators were accused of withdrawing capacity.
It comes as the federal government looks set to pass legislation today that will cap gas and coal prices.
Clare Savage told ABC RN's Patricia Karvelas that she can already see the impact of those measures in the electricity contracts for next year.
Does culture play a role in getting a loan from the bank of mum and dad?
By Emily Stewart
We all know that first home ownership is out of reach for many Australians.
The house-price-to-income ratio has ballooned from 2.5 in the early 1990s to over 6 in 2021.
Many young adults are turning to family members to help them finance their entry into the market.
Often the role of a family's cultural background can play a big role in the decision to help.
Dr Julia Cook from the University of Newcastle delved into this topic for ABC's RN.
Federal parliament will today consider legislation to rein in power prices
By Emily Stewart
Federal Parliament is likely to pass legislation today to cap the price of coal and gas and try and bring down electricity prices.
Treasury had warned that power prices were set to rise more than 50 per cent over the next two years, mostly due to the global shocks caused by Russia's invasion of Ukraine.
The package will temporarily cap gas prices at $12 per gigajoule and deliver a $3 billion relief package for vulnerable Australians.
The government says the package will cut the average household's power bill by about $230.
Read more on this story from ABC's political reporter Jake Evans.
Here's a market update at 10:20am AEDT
By Emily Stewart
- ASX 200: -0.6% to 7,207
- All Ords: -0.55% to 7,398
- Aussie dollar: 68.60 US cents
- On Wall St: Dow -0.4%, S&P 500 -0.6% , Nasdaq -0.8%
- In Europe: Stoxx 600 flat, FTSE flat, DAX -0.2%
- Spot gold: flat at $US1,807 an ounce
- Brent crude: +2.63% at $US82.80 a barrel
- Iron ore: -0.2% to $US109.23 a tonne
- Bitcoin: -0.1% at $US17,808
