• The ASX 200 index rebounded and erased much of yesterday’s losses
  • Coal stocks rallied as risk trades return
  • The RBA Board considered a rate hike pause next month, says minutes

 

Aussie shares climbed back almost 1% today, erasing much of Monday’s losses. Mining, Energy, Discretionary and Banks all rebounded from yesterday’s selloff.

Coal stocks in particular surged amid hopes the Fed Reserve would pause its rate hikes tomorrow, potentially avoiding a US recession.

The question that everybody seems to be asking ahead of the FOMC is whether the banking crisis is systemic, or not.

“In my view, for the moment it looks relatively unlikely to turn into a macro event or a black swan that would precipitate a systemic near-term financial crisis,” said Erik Weisman, Chief Economist and Portfolio Manager at MFS Investment Management.

“What we have witnessed over the course of the last several days in the US and in Europe is the market’s overreaction,” he added.

Meanwhile, the RBA released the minutes today from its February 7 meeting.

The minutes suggest that board members were considering the case for a pause in April to allow the central bank time to digest more data.

Excerpts from the minutes include:

“Members agreed to reconsider the case for a pause at the following meeting, recognising that pausing would allow additional time to reassess the outlook for the economy.

“At what point it will be appropriate to pause will be determined by the data and the Board’s assessment of the outlook,” the minutes said.

 

Fake nickel

Fake nickel has been discovered in the London Metal Exchange (LME) nickel contracts owned by JPMorgan Chase.

According to Bloomberg, the contracts turned out to be backed by bags of stones rather than nickel.

Last week, the LME cancelled nine nickel contracts worth about $US1.3 million after discovering “irregularities” at a warehouse owned by Access World.

Meanwhile the ANZ-Roy Morgan Consumer Confidence Index released today shows a drop of 0.5 points to 76.5 this week, the lowest rating since early April, 2020.

Only 19% of Australians (unchanged) say their families are ‘better off’ financially than this time last year, compared to a majority of 52% (unchanged) that say their families are ‘worse off’.

Looking forward, under a third of Australians, 30% (unchanged), expect their family to be ‘better off’ financially this time next year.

 

BIG CAP WINNERS

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New Hope (ASX:NHC) rose over 9% as the company released its half-year results. The coal miner reported a 103% increase in NPAT to $669m for the half year. The company also paid 30c and 10c interim and special dividends, each fully franked (versus 17c and 13c a year ago).

Fertiliser company Incitec Pivot (ASX:IPL) rose 4% after divesting its Waggaman operations in the US to CF Industries for $2.5 billion. IPL also announced a 25-year supply agreement as part of the deal.

Cement company Adbri (ASX:ABC) rose half-percent after appointing finance manager Dianne Mong as acting CFO. Mong has taken over from interim CFO Peter Barker who is nearing the end of his agreed term.

 

BIG CAP LOSERS

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Shoes retailer Accent Group (ASX:AX1) fell 4% on no specific news.

ASX stocks trading ex-dividend today include Credit Corp Group (ASX:CCP), Cochlear (ASX:COH).

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