AU Weekly Wrap | ASX 200 Rises 0.66% This Week, Led by WiseTech's Strong Earnings; Powell's Jackson Hole Speech Suggests Rate Cuts are Certain
Macro News
Federal Reserve Chair Jerome H. Powell announced that the Fed is prepared to cut interest rates, citing easing inflation and concerns about the slowing job market. While Powell did not provide specific details on the timing or extent of the rate cuts, his comments strongly suggest a potential reduction at the Fed’s next policy meeting in mid-September. Currently, interest rates are between 5.25 and 5.5 percent, and there is speculation on whether the cut will be a half-point or a quarter-point.
The number of Americans applying for unemployment benefits rose slightly to 232,000 last week, indicating that layoffs remain low even as job availability decreases. New claims increased by 4,000 from the previous week's 228,000, slightly above economists' forecast of 230,000.
Keating Criticizes Labor's Superannuation Tax Plan
Former prime minister Paul Keating has criticized Labor's plan to double the tax on retirement savings over $3 million, warning it could reduce superannuation to a low- and middle-income pension scheme and harm public trust in the $3.9 trillion system he established. In private discussions, Keating called the government's refusal to index the $3 million threshold to inflation "unconscionable," according to anonymous sources.
Company News
CBA Cuts Interest Rates for New Borrowers
$CommBank (CBA.AU)$ has reduced variable interest rates for most new home loan customers, signaling increased competition in the mortgage market. On Friday, the bank announced it had cut the variable mortgage rate for new owner-occupier borrowers with a 20% deposit by 0.25 percentage points, bringing the rate to 6.89%.
$Pilbara Minerals Ltd (PLS.AU)$, a prominent Australian lithium mining company, is set to release its financial report next week. The company's shares have struggled in 2024, declining nearly 30% year to date after previously demonstrating resilience despite falling lithium prices. Keep an eye out for key expectations and the latest analyst ratings.
WiseTech reported a strong financial performance in its FY24 report, with total revenue increasing by 28% year-on-year to A$1.04 billion. The company's flagship product, CargoWise, saw a 33% growth, generating A$880.3 million in revenue. EBITDA also rose by 28% to A$495.6 million, with the EBITDA margin improving to 48%, up by 0.4 percentage points from the previous year. These results exceeded the high end of the company's guidance range, highlighting a successful fiscal year for WiseTech.
Australia's leading iron ore miners, including $BHP Group Ltd (BHP.AU)$, $Fortescue Ltd (FMG.AU)$, and $Rio Tinto Ltd (RIO.AU)$, are facing major challenges as iron ore prices hit their lowest since 2022. A global supply surplus, compounded by a crisis in China's steel industry leading to output cuts, is driving the downturn. Despite this, BHP Group Ltd shares have recently risen by 2.32% in Australia and 1.97% in the U.S. ahead of their FY24 financial results, which are to be released on August 27 AEST. BHP's shares had previously fallen significantly from their peaks.
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Source: Investing.com, AFR. CNBC
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