• The ASX 200 fell almost 1% on Wednesday, tracking moves in Wall Street
  • RBA Governor Phil Lowe gives hope we might be at the end of rate hike cycle
  • Qantas shares at 3-year high

 

Local shares tracked Wall Street lower today, with the ASX 200 finishing 1% lower.

Investors heard from RBA governor Phil Lowe, who told a business summit that “we are closer to the point where it will be appropriate to pause interest rate increases” – signalling that we might be at the end of the cycle.

This came a day after the the RBA raised its official cash rate by another 25 basis points to 3.6%. Markets are now pricing in at least one more hike in the cycle, and maybe two.

The Energy sector was the biggest loser on the ASX today, tumbling by 4% as oil prices sank 4% and coal prices by 2% after comments made by Fed chair Powell overnight.

Powell told Congress the Fed will likely continue to hike rates in the coming months, and that bringing down inflation “has a long way to go and is likely to be bumpy”.

The Aussie dollar weakened by 2% to US65.78c right now after the comments, while the US 2-year/10-year curve inversion reached 1 percentage point (~103bps), the most inverted in over 40-years.  An inverted 2yr/10yr is usually a sign of an incoming recession.

Iron ore futures slipped today as investors weighed on the slowdown of China’s steel consumption. In Singapore, iron ore futures were down half a percent, sending iron ore stocks like Fortescue (ASX:FMG) and BHP (ASX:BHP) down 1 percent.

In stock news, Qantas (ASX:QAN) was the best large cap performer on Wednesday, up 2% to its highest since the pandemic.

Qantas and airline stocks rose after an analysis by the Australian Competition and Consumer Commission (ACCC) found that domestic airfares remain well above 2019 levels.

Origin Energy (ASX:ORG) leapt 1% after CEO Frank Calabria told the AFR Business Summit that electricity prices would jump by at least 20% in July.

Sayona Mining (ASX:SYA) and Piedmont Lithium (ASX:PLL) fell 4% each after announcing the first spodumene concentrate (around 70t) produced at the North American Lithium (NAL) operation in Québec are proceeding on schedule and within budget.

Looking ahead to tonight’s session on Wall Street, the US Fed chair Powell is scheduled to meet with the House of Representatives Financial Services Committee.

 

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InvoCare (ASX:IVC) retreated 0.75% after TPG lifted its stake in IVC from 17.8% yesterday to 19.8% today as it makes a run at a takeover play.

Church donor tech PushPay (ASX:PPH) rallied 4.5% following the extension to March 13th for its takeover bid by Pegasus Bidco.

 

BIG CAP LOSERS

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Woodside Energy (ASX:WDS) fell 7% as directors Sarah Ryan and Christopher Haynes plan to retire from he WDS board at April’s AGM.

Commonwealth Bank (ASX:CBA) was modestly lower after revealing a cyber incident at its Indonesian subsidiary, PT Bank Commonwealth.

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