RBA rate hikes & Tesla job cuts | Jessica Amir on ABC News Radio
In a recent interview with ABC News Radio, moomoo Market Strategist Jessica Amir gave an Australian market update. She touched on the RBA's consideration of a rate hike, Sonic Healthcare, and Tesla news, plus surging gold and copper prices. Here are the highlights from the episode.
What’s happening in the market
The Australian market is cautious today ahead of the RBA meeting minutes, especially considering the RBA's discussion of a potential rate hike.
Despite this, 90 stocks within the ASX200 are experiencing gains and the index is just a whisker away from its record all-time high.
Additionally, record highs in gold and copper prices support related stocks. This surge is driven by increasing demand, particularly from Chinese imports for electrification purposes, as well as indications of the Fed maintaining or even cutting interest rates, which is weakening the USD.
In company news:
-Sonic Healthcare faces an 11% decline in shares after revising its yearly guidance and projecting a downturn.
-Star Entertainment denies talks with Hard Rock regarding a potential takeover, a statement echoed by Hard Rock. Nonetheless, Star's shares declined by 3.7% following a recent 20% surge.
-Tesla announces staff cuts as part of cost-saving measures, anticipating higher earnings for FY24; however, its shares dipped by 1.4% in early trading.
Are Tesla job cuts impacting the market?
Tesla's shares have declined by 1.4% following the announcement of 2,800 job cuts.
Plus, the Reserve Bank of Australia's forecast of unemployment reached as high as 4.5%. Although not at that level yet, unemployment has begun to increase more than anticipated. Lagging effects from interest rate adjustments are impacting businesses, along with inflationary pressures such as escalating costs of rent, property, and utilities. To maintain profitability, businesses may resort to reducing their workforce, leading to more job cuts. Consumers should exercise caution with their spending, considering the likelihood of further job losses on the horizon.
Market outlook
The recent RBA meeting minutes will shed light on the RBA's contemplation of a rate hike.
Nvidia's earnings report holds significant importance, being the third-largest company globally with a market size exceeding US$2.3 trillion, surpassing the entire Australian share market. Nvidia commands a significant market share of 80-90% in data centers, supplying chips and GPUs to major tech giants like Microsoft, Amazon, Meta, and Google.
Australian dollar update
The Australian dollar is trading at 66.70 US cents, marking a four-month high. This uptick follows a 1.4% increase last week, driven by housing support in China and a hawkish stance from the Reserve Bank's May policy meeting.
Click the link to get the full interview：News - ABC listen
