ASX Large Caps: Shares slump on RBA minutes, BlackRock ditches its 60-40 investment strategy

• The ASX slumped by 0.4% today as the RBA released its April minutes
• Core Lithium jumped 8pc after increasing its MRE
• BlackRock ditched its 60/40 strategy

Local shares fell 0.4% on Tuesday after the RBA minutes revealed the central bank may need to raise rates again after the pause this month.

According to the April meeting minutes, members of the RBA board believe there is a strong case for further rate hikes to tame inflation..

“…members observed that it was important to be clear that monetary policy may need to be tightened at subsequent meetings, and that the purpose of pausing at this meeting was to allow time to gather more information,” excerpt from the minutes said.

On the ASX, Energy stocks fell the most, by 2%, followed by Consumer Staples which fell 1%. Utilities was the only sector in the green, up 0.4%.

Oil stocks slumped as crude prices fell further overnight.

Gold mining shares also extended their fall  as gold price tumbled to US$1,994 an ounce.

One of the best performing large caps today was Core Lithium (ASX:CXO), up by 8% after announcing that the total mineral resource estimate (MRE) for Finniss has increased.

CXO said its MRE increased by 62% to 30.6Mt at 1.31 per cent Li2O, while the measured and indicated mineral resource lifted by 46% to 19.4Mt at 1.37% Li2O.

China’s economy on the up

China released a swath of data today including its GDP report which shows the economy lifted by 4.5% in the first quarter, vs consensus of 4%.

The CCP has set a 5% target for GDP growth for 2023 after missing its 2022 goal.

The nation’s retail sales of consumer goods also went up 5.8% in the first quarter of 2023, according to China’s National Bureau of Statistics today.

Experts believe these data could bode well for the oil market.

“If China’s major economic data points to an even more robust reopening from COVID, oil’s bullish rally could quickly get right back on track,” said Oanda analyst, Edward Moya.

BlackRock ditches 60/40 investment strategy

The world’s largest fund manager BlackRock said it was ditching the 60/40 portfolio in favour of public and private investments, as well as bonds, to navigate higher rates.

A 60/40 investment strategy is a traditional allocation where 60% of the portfolio is invested in stocks and 40% is invested in bonds or other fixed-income securities.

In a note to Bloomberg, BlackRock strategists said, “These old assumptions do not reflect the new regime we’re in – one where major central banks are hiking interest rates into recession to try to bring inflation down.”

BlackRock said it will instead be looking at specific sectors such as energy or healthcare, and selecting companies with robust cash flows and resilient supply chains.

“We believe in a new approach to building portfolios, where strategic views need to be more granular – across sectors and within private markets – to help build more resilient portfolios in the new regime,” said the note.

BIG CAP WINNERS

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Telix Pharma (ASX:TLX) surged 13% after telling the market after hours yesterday that revenue for the March quarter was $100.1 million, driven by global sales of its prostate cancer imaging agent called Illuccix. Demand for Illuccix in the US continues to increase on the back of strong clinical results with sales of $97.5 million (up from $76.8 million in the prior quarter).

Neuren Pharma (ASX:NEU) lifted 5% after announcing that DAYBUE (trofinetide) is now officially available for the treatment of Rett syndrome in adult and children two years of age and older in the United States. DAYBUE was approved by the US FDA on 10th March, and is the first and only drug approved by the FDA for the treatment of Rett syndrome.

Hub24 (ASX:HUB) rose 2% after reporting that its total funds under administration (FUA) reached $76.9 billion as at 31 March, an increase of 16.5% year on year.

BIG CAP LOSERS

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