• The ASX closed flat on Monday despite opening higher
  • Risk-on trades back as the market prices in less aggressive Fed hikes
  • Iron ore and lithium were best performing stocks today

 

Aussie shares slipped to a flat close despite opening higher today.

On Friday, Wall St posted its biggest two-day gains in 5 months amid hopes that inflation in the US is cooling and the Fed could take its foot off the pedal.

Back home, local investors will also be watching a couple of important releases that will dictate the RBA’s next moves.

On Tuesday, the RBA meeting minutes are scheduled to be released. The meeting, which was held on November 1st, saw the RBA lift rates by another 25bps to bring the cash rate to 2.85%.

“It seems that Australia can avoid a recession depending on how the RBA navigates this financial tightening cycle, and for now, it seems they are on the right track,” said Josh Gilbert, market analyst at eToro.

The unemployment rate meanwhile will be released by the ABS on Thursday.

Last month’s unemployment rate stayed at 3.5%, after dropping to decade lows in July.

“This week’s reading will be closely watched to see how strong the economy is, and whether the Reserve Bank’s interest rate increases are having the desired effect of cooling demand,” said Gilbert.

“The RBA wants to see the unemployment rate rise, but even if there is an increase in joblessness, we will likely continue to see the rate stay near these decade-low levels for some time.”

On the ASX today, iron ore and lithium miners were the best performing stocks.

Fortescue (ASX:FMG) lifted 10% as both spot and futures iron ore prices gained around 4% amid hopes that China is reopening its borders.

There are reports that China has started loosening its strict Covid rules. Under the new guidelines, the country will now reduce the amount of time inbound travellers must spend in quarantine, and it has also pulled back on mass testing.

Chinese stocks listed in New York rose as the Nasdaq Golden Dragon Index rose another 6.6% on Friday, adding to its 7.6% gain the previous day.

Agribusiness company Elders (ASX:ELD) was the worst performing large cap today, down around 20%.

Despite reporting a 35% increase in revenue to $3.445 billion for FY22, Elders says it expects a tougher FY23.

“High demand for agricultural commodities is expected to create favourable trading conditions in the first half of FY23, however recent extreme rainfall events across the eastern states have created some uncertainty in affected cropping regions and concern about reaching full harvest potential for both summer and winter crops,” Elders said to the ASX.

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Champion iron (ASX:CIA) rose 12% on the back of iron ore price.

Core Lithium (ASX:CXO) rose 11% on the back of lithium prices. The company also announced that its CFO, Simon Iacopetta, has chosen to step down and will continue to support an orderly transition over coming months.

 

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The big four banks slipped 1-2% today as law firm Slater and Gordon announced it has reached settlements worth over $126 million with three of the big four banks and their insurers over consumer credit insurance (CCI).

The settlements included $50m from CBA (ASX:CBA), $47m with ANZ (ASX:ANZ) and $29m with Westpac (ASX:WBC).

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