Australian stocks are higher, despite a tumble on Wall Street as investors turned cautious ahead of the US Federal Reserve's last policy announcement of the year.
Meanwhile, Australians reselling their properties made record profits in the September quarter, according to CoreLogic.
We'll bring you the latest on what's happening on the markets throughout the day in our live blog.
Disclaimer: this blog is not intended as investment advice.
Key Events
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Australian arm of crypto firm Binance sued by ASIC
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Government 'spending like a drunken sailor' before election
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Local shares pushing higher at lunch
Market snapshot
- ASX 200: +0.3% to 8,341 points
- Australian dollar: -0.2% at 63.24 US cents
- S&P 500: -0.4% to 6,050 points
- Nasdaq: -0.3% to 20,109 points
- FTSE: -0.8% to 8,195 points
- EuroStoxx: -0.4% to 513 points
- Spot gold: +0.2% to $US2,649/ounce
- Brent crude:Â +0.1% to $US73.25/barrel
- Iron ore: -0.5% to $US104.50/tonne
- Bitcoin: -0.1% to $US106,351
Prices current around 12:10pm AEDT
Live updates on the major ASX indices:
Australian arm of crypto firm Binance sued by ASIC
Corporate regulator ASIC has sued the Australian arm of crypto firm Binance for alleged consumer protection failures.
ASIC has lodged proceedings in the Federal Court, alleging that Binance offered crypto derivative products to more than 500 retail investors, who it misclassified as wholesale clients.
Trading companies have different obligations to retail vs wholesale investors, including to provide a product disclosure statement and access to a dispute resolution scheme.
"Our case alleges Binance's compliance systems were woefully inadequate and exposed more than 500 clients to high-risk, speculative products without the right consumer protections in place," ASIC deputy chair Sarah Court said.
"Many of these clients suffered significant financial losses. In 2023, we oversaw compensation payments by Binance of approximately $13 million to affected clients.
"Crypto derivative products are inherently risky and complex, so it is critical that retail clients are classified correctly.
"Those classifications ensure they receive the required consumer protections, and the information required to make an informed investment decision."
Government 'spending like a drunken sailor' before election
The economic notes are coming in thick and fast now economists have had time to digest the federal government's mid-year budget update.
David Bassanese, the chief economist at Betashares, has likened the spending by the government to that of a drunken sailor.
"The federal government appears to be spending like a drunken sailor in the lead-up to the next election, the only difference is the spending is not on whisky and wild times but increased care for some of the most disadvantaged in the community," he wrote.
"That said, while it might be hard to fault the intent behind much of this increased spending — covering a wide range of areas such as care for pre-school children, the aged and disabled — it must be faulted for making no efforts to fund this spending responsibly, especially at a time of economy-wide capacity constraints, high inflation, and high interest rates."
To fund the increase in government spending (which Mr Bassanese describes as a $42.2 billion "blowout"), he says it is "parameter changes", like personal income tax, that will "carry the load".
"Curiously, company profit taxes are expected to deliver $8.5b less in revenue over the forward estimates, due to weaker oil prices and lower mining sector profits," he said.
"Note weaker-than-expected mining profits come despite no downgrade to the all-important iron ore outlook, with prices still expected to fall to $US60/tonne by the September quarter of 2025."
Southern Cross Austereo's CFO resigns
Southern Cross Austereo's chief financial officer Tim Young has resigned from the media company.
Mr Young will leave the business — which includes commercial radio stations and the LiSTNR audio platform — at the end of January 2025, and the company's statement to the ASX did not detail why he has resigned from the role.
"We would like to thank Tim for his significant contribution to the company during his time with us," SCA CEO John Kelly said in a statement.
"His expertise, professionalism and unwavering commitment have been instrumental in positioning our business well for the future. We wish him all the very best in his next endeavour."
Toby Potter, the company's current Executive Head of Finance and Transformation has been appointed as acting CFO.
The update comes a day after SCA announced it would sell its regional TV licences in the "three aggregated markets" of Queensland, southern NSW and Victoria to Network 10.
SCA currently broadcasts Network 10 programs in those three markets under a regional affiliation agreement with the network.
Is a loss a loss until you sell?
Re: record profits for Australians selling homes, Eliza Owen from CoreLogic wrote "A decline in home values is only a problem for sellers if they have issues servicing home loan repayments, or are in some other circumstance where they need to sell". Does the "if" matter? Can I now argue that I haven't lost money on any investments unless I've sold them?
– Bof
Interesting question… if it makes you feel better Bof, why not?
(this blog is not intended as investment, or mindset, advice)
Local shares pushing higher at lunch
As we head into the afternoon, the ASX 200 is pushing slightly higher — it's up 0.3% to 8,340 points as of 12:205pm AEDT.
(You can get live figures at the top of the blog.)
The top performing stocks are stemming from sectors like real estate, industrials and healthcare, which are up 1.2%, 1.1% and 0.7% respectively.
As for the best individual stocks, buy now pay later platform Zip is leading the charge, as is uranium explorer Paladin Energy.
Here's the top five performers:
- Zip +6%
- Paladin Energy +5.6%
- Polynovo +5%
- Megaport +4.57
- Centuria Capital +3.9%
As for the bottom performing stocks:
- Coronado Global Resources -2.8%
- Insignia Financial -1.6%Â
- Suncorp -1.6%
- Lottery Corporation -1.5%
- NIB Holdings -1.4%
NAB boss says economy is in 'reasonable shape' despite higher rates
Today is also NAB's annual general meeting — and earlier this morning the bank's new CEO Andrew Irvine told shareholders how it considers the economy is faring.
"Despite headwinds internationally and domestically, Australia's economy is in reasonable shape and we are optimistic about the longer-term outlook," Mr Irvine said.
"Business conditions are favourable and the job market is resilient, positioning us well compared with global peer economies.
"Restrictive interest rates are working to bring inflation into the Reserve Bank's target range, and we do expect to see rates decrease in the first half of 2025.
"In the meantime, we do recognise that many customers are finding the higher cost of living challenging and we are here to help. Our message is clear, please call us and call us early."
Nissan and Honda exploring possible merger
That's according to a number of reports from media outlets, including Reuters, Bloomberg, the New York Times and the Wall Street Journal.
While the two car makers are yet to announce any formal deals, the two are exploring ways they can collaborate — with Reuters reporting the companies are in talks to set up a holding company that would allow them to share more resources.
The talks between the Japanese auto giants were first reported by the Nikkei newspaper, and comes as the companies are facing increased competition from Tesla and EV makers in China.
Honda and Nissan agreed to cooperate when it came to their EV businesses back in March, and deepened their ties again in August.
Both companies however have issued separate statements, saying a merger has not been announced by either business.
Qantas compensation 'a huge relief' for workers, Chalmers says
Down in Parliament House, Treasurer Jim Chalmers used his MYEFO press conference to address yesterday's agreement between Qantas and the Transport Workers' Union that will see the airline pay $120 million to compensate hundreds of workers who were illegally sacked in 2020.
"The government really welcomes the result and the outcome achieved," he said.
"This will be a huge relief for all of those workers who are impacted by this, particularly as we get closer and closer to Christmas.
"I did want to pay tribute to the TWU for the way that they have been dogged and determined to get this outcome for the workers that we all represent and I wanted to remind you that the aviation sector is one of the main reasons, the main motivations, for our Same Job Same Pay policy.
"We want to close the labour hire loophole because we want people working in aviation and in sectors like it to have job security and decent pay."
Happy mini budget day!
Hello! I'm here to guide us through the rest of this fine Wednesday from a very humid Brisvegas.
And what a Wednesday it is — as Michael pointed out, it's MYEFO day, aka mini budget day. Some might say it's like economics Christmas.
If you want to get the rundown on what's happening in MYEFO, head on over to our friends on the Politics blog and tell 'em we sent you!
(And of course, we'll bring you all the reaction right here.)
Australians selling homes typically bought 9 years ago
Taking you through a few more interesting details from CoreLogic's quarterly 'Pain & Gain' report.
Looking at properties sold in the September quarter, they were typically held for 9 years before resale.
That puts the median initial purchase date around the September quarter of 2015.
"Since September 2015 through to the end of September 2024, national home values increased 57.7%," the report noted.
"Though capital growth performance through this period has ranged from an 87.7% rise across regional Tasmanian dwelling values to a -3.2% fall across Darwin."
ASX opens flat
The Australian sharemarket is struggling for direction at open.
The ASX 200 index was fairly flat at 8,311, by 10:27am AEDT.
At the same time, the Aussie dollar was flat at 63.36 US cents.
With the budget heading back into deficit will anyone look at the major tax concessions?
The Mid-Year Economic and Fiscal Outlook (MYEFO) is due out later this morning and is expected to show a return to budget deficits.
This isn't surprising, as the Commonwealth budget has remained in structural deficit for well over a decade — that means the economy (or at least inflation and tax receipts) needs to be roaring along to record a surplus.
A lot of the focus is on potential spending cuts, but there is a huge pot of "tax expenditures" that a government could tap to close the budget gap.
Treasury put out its annual Tax Expenditures and Insights Statement yesterday, which was covered by my Canberra colleague Tom Crowley (see link below).
In order, the most costly tax concessions were:
- Main residence exemption from Capital Gains Tax (CGT) — $51.5 billion
- Tax concessions on employer super contributions — $29.2 billion
- Rental deductions —$26.5 billion
- CGT discount — $22.7 billion
- Tax concession on super fund earnings — $22.2 billion
The 50% CGT discount was also one of the fastest growing tax expenditures at 27% per annum over the past four years, although it is expected to shrink slightly over the next four.
The fastest growing tax concession over the past four years was an exemption from NDIS payments being counted as income for tax purposes, at 29.7% per annum. It is expected to keep growing at 8.8% per annum for the next four years.
Record profits for Australians selling their property: CoreLogic
Australians reselling their properties made record profits in the September quarter — according to CoreLogic.
The property data firm's latest 'Pain & Gain' report crunched the numbers on 95,000 resales over June to September.
It found the median profit made was $295,000, which is the highest since the series began back in the mid-90s.
Total gains from resales came in just under $34 billion for the quarter.
CoreLogic's head of research Eliza Owen said it was down to growth in home values (up 0.8% in the quarter nationally) and "reasonably strong" housing demand.
Of course it isn't all rosy for those selling up — among those who made a loss, the median was $40,000.
But just 5 per cent properties resold at a loss, the lowest level since 2008.
Combined losses came in at $270 million.
"A decline in home values is only a problem for sellers if they have issues servicing home loan repayments, or are in some other circumstance where they need to sell," Ms Owen said.
"Otherwise, homeowners can simply hold their properties back from the market until such time there is stronger buyer demand.
"That being said, there are still clearly pockets of pain where home sellers need to offload their property in spite of weak market conditions, or values remaining substantially below previous record highs."
The man poised to lead the ABC
So you have heard that the ABC is getting a new boss. What do we know about him?
Here is a great analysis from Chief Business Correspondent Ian Verrender about the ABC's incoming managing director Hugh Marks.
As Ian writes, Hugh Marks's ascension to the top of the media pile was not via the traditional route. Now he has one of Australia's toughest assignments.
Click the link below to read the analysis.
ICYMI: Alan Kohler's Finance Report
Fatigue, stress contributed to BHP train crash in WA's Pilbara, ATSB finds
The Australian Transport Safety Bureau has released a report into a BHP train crash in WA's Pilbara region earlier this year.
The report found sleep issues brought on by multiple spider bites contributed to the crash.
BHP has enacted fatigue management measures and made changes to its alert systems off the back of the incident.
Dow drops for 9th straight session
US stocks retreated on Tuesday and the Dow dropped for a ninth straight session, as investors exercised caution ahead of the Federal Reserve's last policy announcement of the year after economic data indicated consumer spending remained solid.
US retail sales increased more than expected in November, buoyed in part by an acceleration in motor vehicle purchases, consistent with strong underlying momentum in a resilient economy.
Investors were largely focused on the Fed's policy announcement on Wednesday, almost completely pricing in an interest rate cut of 25 basis points.
Of particular attention will be the Fed's summary of economic projections (SEP), which may indicate how aggressive the US central bank will be in cutting rates in 2025.
The Fed may slow its easing in an economy that appears to have solid momentum and sticky inflation, and as the incoming Trump administration is expected to impose policies to stimulate growth and potentially reignite rising prices.
"This is just kind of standard fare for a pre-Fed day market where you have just a little bit of uncertainty, people are not sure how to position ahead of the SEP and ahead of Powell," said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.
"Everyone knows we're getting 25 bps … what Powell is going to say at the press conference, what the SEP is going to tell us, those things people are not quite sure of so you have a little bit of jitters ahead of that."
While the Nasdaq hit a record high on Monday and the S&P 500 is up nearly 27% on the year, the Dow has struggled recently and suffered its ninth straight daily decline, its longest losing streak since February 1978.
Qantas agrees to pay $120m compensation to illegally outsourced workers
This is the news we've been covering over the last few weeks and last night Qantas agreed to pay $120 million in compensation to 1,820 ground crew workers it illegally sacked during the COVID-19 pandemic.
The final payout figure will be capped at about 12 months' pay for affected workers and will go towards compensating them economic loss, hurt and suffering.
A compensation fund will be set up in 2025 and will be administered by the Maurice Blackburn law firm.
Today, TWU National Secretary Michael Kaine is hosting a press conference at 9am AEDT and we will bring you more on this as it happens.
Here is a good article from Luke Cooper about this case.
Market snapshot
- ASX 200 futures: -0.1% to 8,313 points
- Australian dollar: -0.6% at 63.32 US cents
- S&P 500: -0.6% to 6,036 points
- Nasdaq: -0.6% to 20,062 points
- FTSE: -0.8% to 8,195 points
- EuroStoxx: -0.4% to 513 points
- Spot gold: -0.3% to $US2,644/ounce
- Brent crude: -0.8% to $US73.34/barrel
- Iron ore: -0.5% to $US104.50/tonne
- Bitcoin: +0.7% to $US106,744
Price current around 7:50am AEDT
Live updates on the major ASX indices: