ASX Live News | ASX Set to Drop; BoE Rate Hike 0.5 to 5%, Asian Markets Waiver, PwC Data Breach Report Released,

In the ASX 200 today, it looks like the biggest losers were in the energy sector, down -3.97%

Top Gainers

Delta Lithium [ASX:DLI] +30.14%
Latin Resources [ASX:LRS] +16.67%
Greenx Metals [ASX:GRX] +9.80%

Biggest Fallers

Boart Longyear [ASX:BLY] -10.95%
Siteminder [ASX:SDR] -7.05
Lindian Resources [ASX: -7.04%

That’s all from me today folks, I will leave you with another generated image, this time depicting PwC’s attempts to get out of its current mess.

Enjoy your weekend!

 

It has been revealed this afternoon that PwC is exploring the sale of its government business to Allegro Funds.

This comes after further investigations have been announced into PwC and the ‘big four’ for the international tax scandal, which has embroiled the firm for months.

It has been alleged that Peter Collins, a tax partner at PwC Australia, utilised confidential information obtained through his involvement in a covert government tax project targeting multinational companies to provide tax-avoidance advice to his clients and others.

The potential deal could include 100 partners and approximately 1,000 staff—roughly 10% of the firm.

Private equity investor Allegro Funds holds over $4 billion in managed assets and specialises in transforming struggling companies.

While the rumour mill churns, PwC have refused to confirm, saying the firm would not ‘comment on market speculation’.

ASX futures are down -92 points (-1.29%), trading at 7,060.5.

• AUD -0.9% to 66.69 US cents
• Bitcoin +0.46% to US$30,050
• NASDAQ +0.95%
• DOW -0.94%
• S&P500 +0.37%
• FTSE -0.73%, Stoxx 50 -0.51%, DAX -0.06%, CAC -0.79%
• Spot gold +0.08% to US$1,925.40/oz
• Brent crude down -0.98% to US$73.50 a barrel

Well… that got out of hand quickly.

Elon Musk responded today to Mark Zuckerberg’s off-the-cuff comment to fight with apparent enthusiasm.

Wheels are in motion for a potential showdown between the two tech giants.

Who do you think will win?

Musk vs Zuckerberg CAGE FIGHT: How I Accidentally Caused It

Two days ago, I tweeted about META’s competitor to Twitter called ‘Threads’.

I took a few jabs at Meta, then referenced their Chief Product Officer saying how they’ve "been hearing from creators and public figures who… pic.twitter.com/SuSNAOCwOm

— Mario Nawfal (@MarioNawfal) June 22, 2023

Aust CoreLogic June to date home prices:
Syd +1.2% (=1.6% mthly rate)
Mel 0.5%
Bri +1.1%
Ade +0.6%
Per +0.7%
5 city av +0.9% (=1.2% mthly rate)
Supply shortfall + FOMO are dominating still rising rates..for now. Higher rates + recession could still give another leg down in prices pic.twitter.com/yLHB1igeeH

— Shane Oliver (@ShaneOliverAMP) June 23, 2023

Commodity prices are starting to wake up after a sleepy 2022.

Click below to hear our resident mining expert James Cooper talk with industry insider Hedley Widdup who runs Lion Selection Group.

They discuss the recent weakness being felt across the resource sector and emerging opportunities.

The RBA Deputy Governor, Michele Bullock, drew the ire of many this week after saying that the unemployment rate would have to rise in order to curb inflation.

Australian Workers’ Union boss Stacey Schinneral had some choice words for the RBA, commenting:

‘It’s truly a broken system when the RBA’s message to struggling Australians is: some of you need to lose your jobs or we’ll have to smash all of you with interest rate hikes.’

The comments come after the RBA yet again raised interest rates earlier this month, making it the strongest hiking cycles increase since the 1994 bond crisis.

Source: Shane Oliver

So what is the reasoning behind the RBA’s comments, and are we headed for a spike in unemployment?

As of May, Australian unemployment was approximately 511,800, according to the ABS.

According to the RBA’s comments, this number is far too low, claiming a tight job market was helping push wage prices up to inflationary levels.

So what’s the ideal number?

The RBA describes its optimal employment numbers as the ‘non-accelerating inflation rate of unemployment’, or NAIRU.

This super-jargon is essentially a combination of factors to assess the unemployment rate versus the spare capacity of a nation.

Source: RBA

So, if there is more spare capacity in an economy, then the aggregate demand for goods and services is less than the economy’s capacity to produce them, driving inflation down.

So what can we expect?

The RBA has warned the jobless rate would have to climb to 4.5%, implying 140,000 could lose their jobs in the next 18 months.

But with the RBA governor position set to change in July and the short-list out today, things remain up in the air.

The Reserve Bank has said it intends to overhaul its culture and the way it sets interest rates moving forward.

Time will tell if the institution can really change; maybe its communication would be a start.

As the media obsession with Oceangate continues, are there any lessons we can take from the tragedy?

1. The media loves shiny things
2. Unexpected news always trumps what we know
3. What we know is based on a set of assumptions
4. Those assumptions are based on a narrative that isn’t always true

As Mark Twain aptly said:

‘It ain’t what you don’t know that gets you into trouble.
It’s what you know for sure that just ain’t so.‘

So what can investors learn from the Oceangate?

My only commentary. #titanicsub #Titan #OceanGate #implosion pic.twitter.com/obFxL4SseB

— April the Chaotic Good (@NeuroPoetica) June 22, 2023

Bitcoin is up a whopping 17.3% this week, continuing to climb nearer to the 52-week high.

The price of Bitcoin currently sits at US$29990, with short-term dips seeing plenty of people still feeling the FOMO and jumping in.

The news earlier this month that institutional giant Blackrock is launching a spot Bitcoin ETF buoyed investors who had fled exchanges since the news of SEC-led cypto-crackdown.

Some crypto enthusiasts were claiming that the move by Blackrock was giving the crypto market much-needed credibility for potential institutional investors.

Values of Australian crop production are forecast to fall to $44.1 billion in 2023-24, driven by lower production and easing prices.

Following three consecutive record production years, total winter crop production is forecast to fall by 34%.

Production falls were largely driven by lower prices of grains, oilseeds, and pulses (down 39% to $19.1 billion)

While lower than expected, this should be offset by other horticulture, which is up 9% to 18.2 billion thanks to favourable growing conditions.

Australia's 2023-24 wheat output #chartoftheday (via @chigrl)

The Australian Bureau of Agricultural and Resource Economics, or ABARES, had projected the country's wheat production to decline 33.9% on year to 26.2 million mt in marketing year 2023-24 (October-September). pic.twitter.com/3k0aOE2VUJ

— Smartkarma (@smartkarma) June 19, 2023

 

 

With all eyes on interest rates for the future of the Australian economy, RBA governorship could be a fateful decision.

With Phillip Lowe’s term up in three months, will he face replacement?

Treasurer Jim Chalmers expects to decide in July.

Australian Treasurer Jim Chalmers expects to decide next month on the governor of the Reserve Bank, with incumbent Philip Lowe’s current term expiring soon https://t.co/hAww4l7mSw

— Bloomberg Economics (@economics) June 22, 2023

ASX midday is down -62.9 (0.87%)

Biggest losers in the ASX as of midday:

Gold Road Resouces [ASX:GOR] continues to tumble -6.25% today after yesterday’s news of struggling production from underutilised resources and heavy rain affecting the Gruyere mine production.

John Lyng Group [ASX:JLG] also continues down from yesterday despite the company upgrading earnings for FY23.

Shares are down -5.15% today, bringing it -25.38% this month.

The selloff signals investors’ concerns after recent downgrades in commercial construction and a P/E of 30.

Pro-Pac Packaging [ASX:PPG] shares are down -18.2% today as leadership changes again, while negative sentiment remains after Cont Ops revenue was down 2% this quarter.

Delta Lithium [ASX:DLI] is up +21.9% after exciting results from early-stage exploration of its Yinnetharra project in WA.

New drilling results show:

• 33m @ 1.9% Li₂0 from 218m
• 19m@ 1.6% Li₂0 from 190m

Commenting on the results, Executive Charimain, David Flanagan said:

‘Yinnetharra is a big system, 216 holes in and we have pegmatites defined along 1.6 kilometres of strike,
stacked in a package more than a kilometre wide.’

‘We are very pleased with results to date and with multiple targets to test, we have massive upside ahead of us.’

Invex Therapeutics [ASX:IXC] is up +22.1% after being granted European Orphan drug designation (ODD) for Traumatic Brain Injury product Exenatide

Medicines that have been granted ODD gain 10 years market exclusivity and clinical trial assistance by the EU.

Zeus Resouces [ASX:ZEU] is up +19.4% after announcing phase 1 drilling program intersected multiple thick pegmatites at its Mortimer Hills Project in WA.

Samples are expected in 8 weeks but visually had similar mineralogy to Yinnetharra Project, boosting investors hope of a potentially big lithium resource below.

 

Overnight BoE set sights on tackling chronic inflation, pushing its rate by 0.5% after a series of quarter-point increases.

This will be the 13th increase since December 2021, putting the rate at 5%, its highest level in 15 years.

Source: DailyMail

Bank of England Chief Andrew Bailey blamed ‘unsustainable’ pay rises on surprise interest rate hike.

Headline inflation remains at 8.7; indicators show core inflation is still increasing in the UK.

With some European central banks following suit today, Euro markets appear rattled, closing down overnight.

Mr Bailey defended the decision and denied remarks that he actively wanted to trigger a recession, saying through the MPC:

‘There has been significant upside news in recent data that indicates more persistence in the inflation process, against the background of a tight labour market and continued resilience in demand.’

Huge shift in just a few months for market's expectation of trajectory in fed funds rate this year … some cuts still expected heading into 2024, but nowhere near as dramatic as in March pic.twitter.com/sv0HY8HEiP

— Liz Ann Sonders (@LizAnnSonders) June 22, 2023

The data breach of global accounting giant PwC continues to roil the firm.

Now the sights are set on the big four consultancy firms’ involvement in the tax scandal.

A new Parliamentary committee will look into the partnership of PwC, Deloitte, EY, and KPMG — and their involvement in the leaking of secret government tax information between 2014-2017.

Former PwC Australia Tax Partner Peter Collins, who helped advise the government in tax reforms to target international corporations, is alleged to have used the information to help clients dodge taxes.

An interim report released on Wednesday revealed PwC engaged in a ‘multi-year cover up’ to hide the confidentiality breach by Mr Collins.

‘As more and more information about the PwC Australia and PwC Global matter has come to light through the work of the Senate, it has become incredibly clear that a major review of the sector, so vital to the proper functioning of the markets, is undertaken,’ Senator O’Neill said.

ASX futures closed at 7,143 yesterday, Opening trades down -23.5 points -0.33%
to 7,119.5

• AUD +0.09% to 67.61 US cents
• Bitcoin +0.12% to US$29,924
• NASDAQ +0.95%
• DOW -0.01%
• S&P500 +0.37%
• FTSE -0.76%, Stoxx 50 -0.42%, DAX -0.2%, CAC -0.79%
• Spot gold +0.60% to US$1,924/oz
• Brent crude down -0.09% to US$74.07 a barrel

Good morning! Kiryll here.

 

Here’s today’s AI image of markets opening to the day’s news.

Looks like it’s going to be a busy one with the European market’s shakey news overnight.

Stay tuned for updates as the ASX opens.