AU Weekly Wrap | ASX Falls Back Below 8000 Points After Hitting Record Highs This Week Amid Recession Fears; RBA Rate Decision in Focus Next Week

Moomoo News AU wrote a column · 15 hours ago

AU Weekly Wrap | ASX Falls Back Below 8000 Points After Hitting Record Highs This Week Amid Recession Fears; RBA Rate Decision in Focus Next Week

Macro News

Australia's CPI Inflation Steady at 1.0% in Q2, Annual Rate Rises to 3.8%

According to the Australian Bureau of Statistics, Australia's Consumer Price Index (CPI) rose by 1.0% in the second quarter of 2024, matching the increase from the first quarter and market expectations. Annually, CPI inflation increased to 3.8% in Q2 2024, up from 3.6%, aligning with market consensus. The RBA Trimmed Mean CPI rose 0.8% quarterly and 3.9% annually, slightly below market estimates. Monthly CPI inflation for June dropped to 3.8% year-over-year, compared to the previous 4.0% rise.

Read Here: What to Know About Next Week's RBA Decision Amid Easing Inflation

Australia's Retail Sales Climb 0.5% MoM in June vs. 0.2% Expected

Australia's Retail Sales, a measure of the country's consumer spending, rose 0.5% MoM in June after increasing by 0.6% in May, the official data published by the Australian Bureau of Statistics (ABS) showed on Wednesday. The reading came in above the market expectations of a 0.2% growth.

US Nonfarm Payrolls Increase 114,000 in July vs. 175,000 Expected

Nonfarm Payrolls (NFP) in the US rose 114,000 in July, the US Bureau of Labor Statistics (BLS) reported on Friday. This reading followed the 179,000 increase (revised from 206,000) recorded in June and fell short of the market expectation of 175,000.

Other details of the report showed that the Unemployment Rate climbed to 4.3% from 4.1% in June, while the Labor Force Participation Rate ticked up to 62.7% from 62.6%. Finally, annual wage inflation, as measured by the change in the Average Hourly Earnings, declined to 3.6% from 3.8% in the same period.

Gold Heads for Best Week in Four Months

Gold prices were set for their best week since April, supported by safe-haven demand and expectations that the Federal Reserve would start cutting interest rates in September. Bullion is considered a hedge against geopolitical and economic risks, and lower interest rates reduce the opportunity cost of holding the asset.

Company News

Rio Tinto 1H Profit Higher, Payout Flat

Mining giant $Rio Tinto Ltd(RIO.AU)$ reported a 14% rise in first-half net profit to $5.81 billion, driven by increased copper production and prices, despite a weaker performance in its iron-ore segment. Underlying earnings slightly increased to $5.75 billion, close to market estimates. The company declared an interim dividend of $1.77 per share, consistent with previous payouts. CEO Jakob Stausholm highlighted Rio Tinto's growth trajectory, with plans to increase overall production by 2% this year and target a 3% annual growth rate from 2024 to 2028. The company is focusing on expanding its copper operations, vital for the energy transition, with significant projects in the U.S. and Mongolia.

Read Here: Here's Why Rio Tinto's Latest Earnings Are Driving a Boost

DroneShield Shares Plummet 59% After Hitting Peak

$Droneshield Ltd(DRO.AU)$ has experienced significant volatility recently. After reaching a high of $2.72 in mid-June from $1.13 at the end of May, the share price has since plunged 59% to $1.12. The decline is primarily attributed to an overvaluation, with the company's market cap peaking at $2 billion. Additionally, a recent $120 million fundraise at a discount further contributed to the drop. Despite the fall, DroneShield's long-term outlook remains strong as it plans to invest in rapid R&D programs to fuel revenue growth and increase margins.

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