- The RBA handed down a surprising rates decision today
- Shares fell after the RBA announcement
- Qantas has announced a new CEO to replace Alan Joyce
The ASX 200 index was trading flat but ended up -0.9% lower on Tuesday after the RBA board handed down a surprise interest rates decision.
The central bank lifted the cash rate target by 25bp today to an 11-year high of 3.85%, throwing the market off guard. This comes after a pause in April.
Speaking to the press, RBA Governor Philip Lowe said more rate hikes may be expected.
“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve,” Lowe said.
In an accompanying statement, the RBA also said:
“Inflation in Australia has passed its peak, but at 7 per cent is still too high, and it will be some time yet before it is back in the target range.
“Given the importance of returning inflation to target within a reasonable timeframe, the Board judged that a further increase in interest rates was warranted today.”
The Board acknowledged that a significant source of uncertainty is the outlook for household consumption.
“The combination of higher interest rates, cost-of-living pressures and the earlier decline in housing prices is leading to a substantial slowing in household spending,” said the RBA.
The AUD spiked up around 1% moments after the announcement, trading now at US66.95c.
On the ASX, stocks declined fast when the decision came out, with most sectors closing in the red. Energy and Miners were the worst performers today, followed by Real Estate.
New Qantas CEO
Qantas (ASX:QAN) shares fell almost 3% today after the company announced that Vanessa Hudson will replace Alan Joyce as CEO of the airline in November.
Joyce is leaving Qantas after 15 years at the helm, during which time Qantas’ share price has risen by more than 150%.
Although his legacy may be up for debate between investors and customers, his leadership over the last few years will have left investors pleased – with Qantas posting a record half-yearly profit in FY23 in a significant turnaround after Covid.
“Any change in senior leadership will always result in some uncertainty for shareholders, particularly after Joyce’s long reign and recent success,” explained eToro market analyst, Josh Gilbert.
“However, his successor Vanessa Hudson, Qantas’ first-ever female CEO, has been with the business for almost 30 years. She previously served as Qantas’ CFO since 2019, helping to navigate the COVID turnaround, which should reassure investors.”
Gilbert says that Hudson takes over at a time when the business is flying with record profitability and surging demand, but relations between passengers and unions are near all-time lows, and competition is intensifying.
“The major task for Hudson will be to keep passengers happy while pleasing investors, which won’t be an easy feat – especially with Joyce’s tenure concluding with record profits,” Gilbert said.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| GOR | Gold Road Res Ltd | 1.89 | 5.01 | 3,607,345 | $1,935,766,397 |
| WAF | West African Res Ltd | 1.02 | 3.83 | 1,984,331 | $1,003,106,192 |
| EVN | Evolution Mining Ltd | 3.57 | 3.78 | 5,846,139 | $6,312,456,137 |
| GNE | Genesis Energy Ltd | 2.53 | 3.27 | 25,419 | $2,609,916,309 |
| HLI | Helia Group Limited | 3.17 | 2.92 | 1,203,144 | $1,049,132,518 |
| SLR | Silver Lake Resource | 1.26 | 2.65 | 2,519,024 | $1,138,936,808 |
| SGP | Stockland | 4.38 | 2.58 | 5,895,600 | $10,193,222,997 |
| SVW | Seven Group Holdings | 23.80 | 2.45 | 687,944 | $8,438,543,459 |
| ALD | Ampol Limited | 31.15 | 2.33 | 590,772 | $7,253,915,894 |
| TLX | Telix Pharmaceutical | 10.40 | 2.31 | 1,998,195 | $3,225,004,584 |
| CXO | Core Lithium | 1.00 | 2.31 | 11,281,599 | $1,812,053,874 |
| NHC | New Hope Corp | 5.37 | 2.29 | 4,422,038 | $4,631,914,754 |
| MGR | Mirvac Group | 2.34 | 2.18 | 11,354,203 | $9,036,019,897 |
| BGL | Bellevue Gold Ltd | 1.42 | 2.17 | 5,350,416 | $1,565,105,025 |
| JDO | Judo Cap Holdings | 1.26 | 2.02 | 415,266 | $1,365,317,042 |
Cleanaway Waste Management (ASX:CWY) rose 5% after making a presentation at the Macquarie Australia Conference today where the company highlighted its second half progress.
Healius (ASX:HLS) rose 2% after reporting the completion of its Montserrat Day Hospitals asset, and the receipt of proceeds of $127 million.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| MIN | Mineral Resources. | 72.93 | -9.25 | 2,680,217 | $15,525,669,245 |
| PLS | Pilbara Min Ltd | 4.02 | -4.96 | 34,459,858 | $12,681,597,185 |
| IGO | IGO Limited | 13.43 | -3.87 | 2,873,432 | $10,579,031,348 |
| BSL | BlueScope Steel Ltd | 19.80 | -4.07 | 2,596,665 | $9,512,477,627 |
| AKE | Allkem Limited | 11.30 | -3.71 | 4,302,854 | $7,479,729,349 |
| MEZ | Meridian Energy | 4.75 | -3.26 | 18,274 | $6,208,667,838 |
| CGF | Challenger Limited | 6.10 | -2.87 | 835,326 | $4,318,215,675 |
| A2M | The A2 Milk Company | 5.48 | -4.03 | 4,008,032 | $4,122,484,182 |
| SGM | Sims Limited | 15.47 | -3.73 | 421,692 | $3,104,311,049 |
| SMR | Stanmore Resources | 3.15 | -2.93 | 1,116,299 | $2,920,508,894 |
| SGR | The Star Ent Grp | 1.27 | -2.86 | 4,111,083 | $2,120,471,949 |
| APM | APM Human Services | 1.88 | -3.34 | 246,332 | $1,783,918,885 |
| SYR | Syrah Resources | 1.43 | -4.98 | 4,936,420 | $1,012,043,120 |
Woolworths (ASX:WOW) fell 1% despite reporting strong sales in Q3. The retailer said its Australian food division increased its sales by 7.6% on pcp to $12.3 billion during the quarter. BIG W sales also saw a 5.7% growth to $1.05 billion. Woolworths CEO Brad Banducci said Q4 sales trends would be “in line with Q3”.
Domino’s Pizza Enterprises (ASX:DMP) was down modestly after announcing a shake-up of its Australia and NZ operations. Current CEO Don Meij’s sister, Kerri Hayman, will come back to the company as Aust/NZ COO. Current Aust/NZ CEO David Burness will be the company’s first Global Culture Coach, focusing on growing franchisee capability “and developing the next generation of pizza entrepreneurs”.
Diversified retailer Endeavour Group (ASX:EDV) fell over 3% after reporting a 3.7% increase in sales in Q3 versus pcp.
“We remain confident that we offer a great breadth of options and value for all social occasions, and we will continue to tailor our offering as the environment requires,” said Endeavour CEO, Steve Donohue.