After returning from the Christmas break, the Australian share market is trading higher at lunch time, while in the US uncertainties around president-elect Donald Trump's policies lifted gold prices.
Holiday trading conditions saw Wall Street trading flat overnight, with the broad expectation that quiet conditions are expected to continue during the holiday period until the new year.
Disclaimer: this blog is not intended as investment advice.
Key Events
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What will influence a February rate cut?
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ASX trading higher at lunch time
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Is more volatility on the cards for markets in 2025?
Market snapshot
- ASX 200: +0.5% to 8,261 points
- Australian dollar: Flat at 62.21 US cents
- S&P 500: Flat at 6,038 points
- Nasdaq: -0.1% to 20,020 points
- FTSE: +0.4% to 8,134 points
- Spot gold: -0.1% to $US2,631.82/ounce
- Brent crude: -0.4% to $US73.29/barrel
- Bitcoin: -0.2% to $US95,474
Price current around 10:30am AEDT
Live updates on the major ASX indices:
What will influence a February rate cut?
It will all come down to some key data, according to Chris Weston from Pepperstone. Namely: December retail sales figures and household spending data (out Feb), as well as December employment and Q4 CPI (out Jan).
He notes the current pricing of an implied 25bp cut in the February RBA meeting is at 70% – with interest rate traders feeling pretty confident of near-term easing.
We know from recent RBA communications (and the December RBA meeting minutes) that the bank is now more open to cutting, although that call is highly conditional on outcome of the upcoming economic data.
After observing some rather enthusiastic Boxing Day sale activity, Mr Weston posits:
"If we do get an easing cycle, we’re looking at a shallow cycle at best, with three, possibly four 25bp cuts to the cash rate over the coming 12 months."
Cashing in on cash?
Here's a conversation that goes with paying cash "rounding up" at the cash register items that are .99 or .98 cents if say each day you shop and a round up of .05 cents × by 365 days a year thats $18.75 per year add on a surcharge if paying credit card hmm not bad extra money the business gets
– Rob
A lot of comments on our cash story today. Thanks for sharing your views Rob
From sandalwood to melons in the NT
The Northern Territory has several interesting industries and one of them is Indian sandalwood. A company that grew the plants has gone into receivership and sold some of its land.
As rural reporter and host Matt Brann reports, the company that swooped in to buy it (nearly 2,500 hectares in fact) is one of Australia's biggest melon producers and is set to grow the crop on the land.
The land is known as Midway Station in the Douglas Daly region of the Northern Territory and before it was used to grow sandalwood was a cattle property:
Victoria has a new opposition leader
A diversion from regular business programming to bring you this breaking news from the great state of Victoria if you missed it: Shadow Police Minister Brad Battin has won the leadership of the Victorian Liberals after John Pesutto was rolled at a party room meeting this morning.
So what do we know about the man appointed leader of the opposition? Find out here:
All you need is… love?
Hi team,
Just jumping in with some thoughts on what was probably my favourite report to work on for the whole year.
In 1990, researchers began a study that followed 167 babies, from birth until the age of 34.
The key finding for me was that wealth is helpful — to smooth the buffers and shocks of life — but it's not everything.
In fact, people with strong family and community links enjoyed better prospects, because they had support during both hard and good times, and they were driven to do well to put back in.
So, essentially, money is a huge help. But love is more important.
There's a lot that's down to circumstance and choices, but also even more linked to support, housing and jobs.
"I didn't have an idea of what the job would be," Isabel told me.
"But I definitely didn't think I'd be living in my Mum's spare room."
With a completed degree and a new job, Isabel is now taking on a new career, but thinks owning her own home is "a pipe dream".
Here's the bigger, broader take.
The babies were from a broad range of backgrounds and the study found some fascinating shifts over time, essentially:
- Education remains highly valued but does not guarantee a good job, because tertiary degrees are no longer a ticket to secure, well-paid work
- Economic and industrial-relations changes have affected employment and family relationships: notably the Global Financial Crisis (GFC) kept wage growth low.
- Tax matters: people who make their living from income (workers) haven't fared as well as those whose income comes from assets like real estate and shares. This has also extended the transition from schooling and higher education into work.
- Rising house prices have benefited home owners as investment in public housing has fallen. When the study began in 1990 around one-quarter of the families lived in public housing. But the amount state and federal governments spend on the sector had fallen spectacularly, until a recent turn-around.
- Pride in Australia and in their origins: Almost one-third of the families in the study didn't speak English at home when quizzed in 1990. Many flourished but others struggled and were faced with discrimination and racism. But by the time they were 21, over half the young people identified themselves simply as 'Australian' with a further quarter identified as Australian followed by another ethnicity (for example “Australian Chinese” or “Australian with a little bit of Italian dropped in as well”).
- Links between gender and inequality remain stubborn: Significant shifts in policies and what's considered 'normal' about gender roles have occurred since 1990, with increased access to education meaning women and girls are in a wider and better-paying range of occupations.
Check out the report, it's really fascinating how large structural choices — like investments in education and housing — have positive impacts down the line.
ASX trading higher at lunch time
The Australian share market is still in positive territory this afternoon, with the All Ordinaries up 0.53% and the ASX 200 0.48% higher to 8260 points at 12:35pm AEDT.
All sectors are in the green except utilities. Here are the top and bottom movers:
Is more volatility on the cards for markets in 2025?
In a note to investors, Chris Weston, Head of Research at Pepperstone, described the Australian economy in 2024 as "uninspiring" but he says 2025 may be more eventful.
Some of the key events that could increase or decrease market volatility, according to Mr Weston:
- The Federal Election
- US inflation, policy and the actions of Donald Trump
- Inflation, jobs data and interest rates in Australia
- China policy and tariffs
As they say in journalism, only time will tell, but it's certainly shaping up to be an interesting year ahead
How low can we go?
How low is our $ going to go in 2025 can the Au market turn this around any time soon
– David-W
Good question, David. While no one has a crystal ball, chief economic correspondent Ian Verrender comes close and has penned this article unpacking the question you asked
"A weak Chinese economy, American threats to impose punishing trade tariffs, a poor medium-to-longer-term outlook for our key exports and a sluggish economy are likely to keep the Australian dollar under pressure through 2025, threatening to send it into the 50 US cents."
Power and control in 2024
Hello, Nadia Daly here to carry you through to the end of the day with all the business and finance news you might need.
If you have a few spare minutes over the holiday period, this column out today by our Chief Business Correspondent, Ian Verrender is well worth a read.
He examines the common thread between 2024's biggest corporate scandals. As Ian says:
"Money and power often go hand in glove."
Take a read:
ASX opens up
The Australian sharemarket has opened higher, on track to end the week in positive territory after the central bank opened the door for lowering borrowing costs earlier this week.
The ASX 200 was up 38 points or 0.5 per cent to 8,259, by 10:24am AEDT.
Nine out of the 11 sectors were higher, with industrials (+0.9pc) and education (+0.8pc) leading the gains.
Here are the top and bottom movers at open.
(Reuters)
Could cash make a comeback?
Global systems outages, such as the CrowdStrike failure, can leave organisations without access to digital payment methods.
The federal government is consulting on plans to mandate that businesses selling essential items must accept cash.
The government says the mandate will come in from January 1, 2026, depending on the outcome of the consultation.
Wall Street ends flat
Wall Street's main indexes closed largely unchanged on Thursday, amid light trading the day after the Christmas break, as rising US Treasury yields weighed on some of the dominant technology megacaps.
On a day of few catalysts, investors responded to yields on US government bonds inching higher, including the yield on the benchmark 10-year Treasury note hitting its highest since early May at 4.64% earlier in the session.
A strong auction of seven-year notes early in the afternoon though helped yields come off slightly, with the 10-year note at 4.58% in late-afternoon trade.
Higher yields are traditionally seen as negative for growth stocks, as it raises the cost of their borrowing to fund expansion. With markets increasingly dominated by the megacap technology stocks known as the Magnificent Seven, crimping their performance – especially in lieu of other market catalysts – will put downward pressure on benchmark indexes.
Among those megacap stocks, Tesla, Amazon and Meta Platforms slipped. Apple increased, continuing to edge closer to becoming the first company in the world to hit a market value of $US4 trillion.
The megacap tech stocks came off somewhat in the summer, as investors sought to rotate some capital into other sectors offering more value. Since the US elections in November though, they have resumed their drive upwards and have outperformed the equal-weighted version of the S&P 500, said Adam Turnquist, chief technical strategist for LPL Financial.
"As a technician, what you want to see is breakouts in absolute terms and relative terms and the Mag 7 is checking the boxes there, so very constructive leadership going into the year-end," he said.
The three main indexes have hit multiple record highs this year on hopes of a lower interest rate environment and the prospects of artificial intelligence boosting corporate profits.
However, US stocks have hit a speed bump in the final month of the year following an election-led rally in November as investors assess the Federal Reserve's projection of fewer interest rate cuts in 2025.
ICYMI: Dan Ziffer's Finance Report
Wall Street rises, benchmark US yield ekes out new high
Wall Street indexes were marginally higher and US benchmark Treasury yields were hardly changed on the day after scaling the highest levels since May inlight, post-Christmas trading.
US stocks steadied after the three major indexes slipped in early trading, interrupting what looked like a "Santa Claus rally" shaping up early this week, in which shares get a seasonal boost from low liquidity, tax loss harvesting and investment of year-end bonuses.
Uncertainties around President-elect Donald Trump's policies lifted gold prices. This, along with the Federal Reserve's less dovish messaging about lowering rates further next year, helped elevate the 10-year Treasury yield to its highest since early May.
"It's light volume and now we are recovering some earlier losses due to some profit taking from Tuesday's rally," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "I think we're in the Santa Claus rally, with a little bit of a bump in the road here today, and it's probably safe to say the year-end rally will continue."
With only a handful of trading days remaining in the year, the Nasdaq, S&P 500 and the Dow have scored respective gains of 33%, 26% and 14% in 2024.
The major concerns for 2025 are the extent of the Fed's monetary easing, Trump's tariffs and other policies, andvarious geopolitical tensions.
New US claims for unemployment benefits came in slightly below analysts' estimates, while ongoing claims jumped to their largest number since November 2021, suggesting laid off workers are having increasing difficulty finding new jobs.
ASX to open higher
Good morning and welcome to our Friday's markets live blog, where we'll bring you the latest price action and news on the ASX and beyond.
A rally on Wall Street overnight sets the tone for local market action today.
The Dow Jones index rose 0.1 per cent, the S&P 500 up 0.1 per cent and the Nasdaq Composite up 0.1 per cent.
ASX futures were up 19 points or 0.2 per cent to 8,217 at 7:30am AEDT.
At the same time, the Australian dollar was down 0.3 per cent to 62.18 US cents.
Oil gave up earlier gains due to China stimulus hopes and an industry report showing lower US inventories.
Brent crude oil was down 0.6 per cent, trading at $US73.12 a barrel.
Gold advanced on safe-haven demand as investors awaited further signals on the US economy's health.
Spot gold gained 0.8 per cent to $US2634.19.