• The ASX tracked New York higher on the first day of the trading month
  • Last night, Fed Chair Jerome Powell signalled a more dovish approach to rates
  • SBF said he didn’t try to commit fraud

 

The ASX rose on the first trading day of the month, up 0.70% as local investors digested overnight’s comments from US Fed Chair, Jerome Powell.

Powell signalled that the pace of rate hikes in the US is likely to slow down starting this month when the FOMC meets on December 13th to 14th.

He explained that inflation in the US remains too high, but rate hikes must be slowed down because prior rate increases have yet to take their full effect.

“Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt,” Powell said.

“Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.”

Callie Cox, US Investment Analyst at eToro, warned that this is a shift, not a pivot.

“Powell has been clear that rates could stay high for some time,” Cox said.

“A high-rate environment isn’t the easiest to invest in, and we could be in for a tougher slog to the highs until inflation comes down significantly.

“At this point, it may be time to start sowing seeds for the next bull market, but try not to get carried away. High rate environments favour quality companies that prove they can execute, so keep that in mind as you pile back into risky markets.”

Bloomberg is reporting, China has softened its stance on Covid restrictions after violent protests across the nation.

Vice Premier Sun Chunlan didn’t use the term “Covid Zero” when she addressed National Health Commission and health experts in Beijing.

According to the state-run Xinhua News Agency, the vice premier used a lot of meaningless party talk to dance around the topic in a way that surprises even Stockhead’s Christian Edwards, who used to work for them.

“…(VP Sun) underlined the importance of constantly optimising the country’s COVID-19 response.

“Over the past three years, the Central Committee of the Communist Party of China and the State Council have always put people’s health and safety first, and effectively dealt with the uncertainties of the COVID-19 situation with a consistent strategy and flexible measures to fight the virus, Sun noted.

“Sun urged efforts to further optimise the COVID-19 response, improve diagnosis, testing, treatment and quarantine measures, strengthen immunisation of the whole population, particularly the elderly, and step up the preparation of medications and other medical resources.”

Befallen FTX founder Sam Bankman-Fried appeared at the New York Times’ annual DealBook Summit event today.

Answering a series of questions from Andrew Sorkin, SBF said:

“Look, I screwed up,” he said. “I was CEO.”

“But I did not ever try to commit fraud.”

Bitcoin traded steadily today at US$17,160.

Back to the ASX, most sectors were in the green today except for Energy which was down 1%.

 

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Rio Tinto (ASX:RIO) rose 3% today following an investor update. The company announced a 2023 production guidance and expects its Pilbara production cost to increases above $US20/t.

 

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Link Administration (ASX:LNK) fell almost 2% as votes from the AGM yesterday were counted.

27.9% proxy and 30.66% poll votes recorded against the adoption of the company’s remuneration report at yesterday’s AGM, constituting a ‘second strike’ against LNK under the Corporations Act.

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