• The ASX closed flattish on Wednesday
  • RBA boss Phil Lowe says it’s too early to think about rate cuts
  • Gold stocks keep climbing

 

Aussie shares were flat after investors digested a speech from RBA boss Philip Lowe on Wednesday.

Lowe told the National Press Club in Sydney that it’s ‘way too early’ to discuss when he would consider cutting interest rates, saying that inflation won’t come back to the target range until 2025.

When asked if interest rate rises were just adding to inflationary pressures, Lowe said:

“In some ways they do. For example, as interest rates increase, many landlords will raise rents to try to cover their increased rate costs, and we’ve seen that happening in this rate hike cycle.”

There was also a discussion on whether corporate profits have been the culprit of high inflation.

To which Lowe replied,”Rising profits are not the source of the inflation we have. Outside the resources sector, the share of national income that goes to profits is basically unchanged.”

 

Gold stocks keep climbing

On the ASX, Healthcare and Comm Services led the performers today, while Energy and Miners lagged.

Gold mining stocks however continued their rally as a weakening global economy continues to drive safe-haven flows towards gold.

Gold is trading at US$2,023.50 right now, and has its eye on record highs of $US2,069 set in 2020.

“If recession expectations continue to grow for the second half of the year, gold should have a path towards the $2,100 level,” said Oanda analyst, Edward Moya.

Gold Road (ASX:GOR) was one of the best performing gold stocks today, up by over 4%.

GOR leapt after it presented an updated 3‐year mine production outlook for Gruyere. GOR says Gruyere’s 3‐year production outlook ranges between 335,000 and 375,000 ounces per annum (100% basis). Life of mine has been re-affirmed to 2032.

 

RBNZ unexpectedly hikes by 50bp

Meanwhile, the Federal government said it will  ban TikTok on government devices, becoming the last nation in the Five Eyes intelligence (US, UK, Canada, NZ, Aust) alliance to block the app.

China has predictably lashed out at the ban, saying: “China always believes that digital security should not be used as a tool to suppress foreign companies in an overstretch of the concept of national security and abuse of state power.”

China meanwhile has launched a probe into the former chairman of state-owned finance company Everbright Group, the latest sign that the CCP is serious about cracking down on the finance sector.

The New Zealand’s central bank, RBNZ, meanwhile has unexpectedly hiked its cash rate by 50bp today, vs consensus of 25bp.

“Inflation is still too high and persistent, and employment is beyond its maximum sustainable level,” said the RBNZ statement.

 

BIG CAP WINNERS

Swipe or scroll to reveal the full table. Click headings to sort.

Wordpress Table Plugin

Core Lithium (ASX:CXO) rose 8% after saying that its maiden 3,500 tonne shipment of spodumene concentrate delivered to Darwin port is ready for shipping to Yahua. Production of a second shipment, a 15,000-tonne parcel of concentrate, has also commenced.

Viva Energy (ASX:VEA) climbed almost 4% after announcing that it will acquire the OTR Group for $1.15 billion from Peregrine Corp, implying pro-forma FY23 (June-end) EBITDA multiple of 7x post synergies.

Telco firm Spark New Zealand (ASX:SPK) rose 1% after the company released a 3-year strategy to FY26, which will focus investment on data centres and new technologies to fuel growth in Spark’s core markets. Spark CEO Jolie Hodson said the new strategy positions Spark for success in an increasingly uncertain environment.

Northern Star (ASX:NST) rose 4% on the gold price rally.

 

BIG CAP LOSERS

Swipe or scroll to reveal the full table. Click headings to sort.

Wordpress Table Plugin

Magellan Financial (ASX:MFG) tumbled 5% after reporting a fall in funds under management from $45.4bn in February to $43.2bn in March.

Carsales.com (ASX:CAR) fell 1% after the company announced the successful completion of the retail shortfall bookbuild component of its $500 million cap raise.

Read MoreLarge Cap

Featured Companies

You might be interested in