ASX LIVE | XJO to Open Down, Victoria Cancels Commonwealth Games 2026

That’s all from me, have a great evening.

Keep an eye out tomorrow for UK, NZ and EU CPI data for June.

Here’s today’s AI-generated image of China’s economy trying to climb back to its old heights.

Australia’s Treasurer, Jim Chalmers, expressed concern over China’s flagging economic growth and the risk of deflation in Beijing, especially when other countries are trying to control rising prices.

China is Australia’s largest trading partner, making the Australian economy vulnerable to China’s economic sputtering.

Despite the poor economic news from China, Australia has not revised its forecasts.

China’s second-quarter GDP growth slowed, raising concerns about its growth target for the year.

Calls for more stimulus have intensified, but China has indicated that measures will likely be limited.

The Reserve Bank of Australia also noted China’s weakened economic recovery in its July meeting minutes. China’s property sector, a major driver of demand for Australia’s iron ore exports, has been affected by the slowdown.

While Australia is not expected to enter a recession, its economy may slow following interest rate hikes. Chalmers welcomed the US’s slowing inflation rate but cautioned against comparing Australia’s situation, as they are at different stages in their inflation fights.

ASX 200 closed down 0.20% today at 7,283.8

All figures shown are from 4:10pm AEST

• $AUD up +0.06% at 68.17 US cents
• ASX futures down -0.27% to 7,239.5
• S&P 500 up +0.39%
• NASDAQ up +0.93%
• DOW up +0.22%
• FTSE down -0.38%
• STOXX down -0.97%
• SSE down -0.26%
• Bitcoin down -0.69% to $US 30,081
• Spot gold up +0.20% to $US 1,958.99
• Iron ore down -0.51% to $US 111.81
• Brent Crude up +0.08% to $US 78.56pb

ASX 200 Sector Top Performance

• Financials up +0.93%
• Health Care +0.83%
• Utilities up +0.36%

The best individual performers:

• Neuren Pharmaceuticals [ASX:NEU], up 3.71%
• Block Inc [ASX:SQ2], up 3.18%
• Graincorp [ASX:GNC], up 2.59%
• AGL Energy [ASX:AGL], up 2.50%
• Netwealth Group [ASX:NWL], up 2.50%

The worst performers:

• Ansell Ltd [ASX:ANN], down 13.83%
• Aurizon Holdings [ASX:AZJ], down 5.38%
• Lendlease Group [ASX:LLC], down 5.26%
• Nickel Industries [ASX:NIC], down 4.55%
• Invocare [ASX:IGO], down 4.16%

‘While the labour market remains tight, consumers’ unemployment expectations, business forward orders, and job ads collectively suggest a modest uptrend in the unemployment rate over coming months,’ said ANZ head of Australian economics Adam Boyton.

‘Such an outcome would be broadly consistent with the RBA’s May Statement on Monetary Policy (SoMP) forecasts. Anecdotal evidence (and our own spending data) also suggests the most recent rate hikes have had an impact on consumer behaviour.’

Mr Boyton said while the RBA looks likely to increase its wages forecast in the next statement on monetary policy, due out in August, it may view the subsequent upside risk for CPI as having already been mitigated by the 25-basis point hike announced in June.

‘Whether a single 25 bp rate hike is sufficient to offset that risk is the question,’ he continued.

‘While individual rate hikes do matter, especially for mortgage holders, the impact of a single 25 bp move on an entire economy over a 12–18-month period is quite modest.’

‘By the same token, one can also argue the reverse. Namely, if the RBA felt that its action to date had not dealt with that risk, then why not move in July?’

With a new RBA Governor, Michele Bullock and CPI data showing the peak is behind us, many in the markets are listening for a doveish tone from the RBA.

Goldman Sachs today released an update on global markets.

In it, the investment giant says the chance of a US recession has gone down from 25% to 20% and that a soft landing is more likely.

Goldman Sachs: "The probability of a US recession has fallen further…"

…it has revised down the chances of a recession over the next year to 1-in-5, only a tad above the average risk over the past century, of 1-in-6. pic.twitter.com/wnq27Yj0kT

— Justin Wolfers (@JustinWolfers) July 17, 2023

Property giant Lendlease [ASX:LLC] shares are down by 5.26% today after announcing it will cut about 10% of its global workforce, or 740 jobs, as it shifts focus to delivering its vast pipeline of projects worldwide.

‘When I took the job as global chief executive, I also took on the challenge of transforming Lendlease into a company that delivered not just great environmental and social benefits but sustainable profits too. And while we’ve made big changes to how we organise ourselves, the way we do business, and the type of work we take on, there’s still more to do,’ Mr Lombardo wrote in the staff announcement.

‘This means tightening our focus even further to just those projects and activities that stand to generate real value. And doing it in a way that uses our own capital and resources more efficiently.’

‘In practical terms, this means continuing to grow our funds under management to generate more reliable and recurring income, an improved focus on the development projects we already have in our pipeline that support our FUM growth, and rightsizing our construction workbook around jobs that carry less risk and generate greater reward.’

Property giant Lendlease [ASX:LLC] shares are down by 5.26% today after announcing it will cut about 10% of its global workforce, or 740 jobs, as it shifts focus to delivering its vast pipeline of projects worldwide.

‘When I took the job as global chief executive, I also took on the challenge of transforming Lendlease into a company that delivered not just great environmental and social benefits but sustainable profits too. And while we’ve made big changes to how we organise ourselves, the way we do business, and the type of work we take on, there’s still more to do,’ Mr Lombardo wrote in the staff announcement.

‘This means tightening our focus even further to just those projects and activities that stand to generate real value. And doing it in a way that uses our own capital and resources more efficiently.’

‘In practical terms, this means continuing to grow our funds under management to generate more reliable and recurring income, an improved focus on the development projects we already have in our pipeline that support our FUM growth, and rightsizing our construction workbook around jobs that carry less risk and generate greater reward.’

ANZ-Roy Morgan Australian Consumer Confidence was among the 5 worst results since COVID. Confidence fell to a record low among renters. It improved for those paying off homes and fell for those who own their home outright. #ausecon @AdelaideTimbrel @arindam_chky @RoyMorganAus pic.twitter.com/Gix723mr5S

— ANZ_Research (@ANZ_Research) July 17, 2023

ANZ-Roy Morgan Australian Consumer Confidence was among the 5 worst results since COVID. Confidence fell to a record low among renters. It improved for those paying off homes and fell for those who own their home outright. #ausecon @AdelaideTimbrel @arindam_chky @RoyMorganAus pic.twitter.com/Gix723mr5S

— ANZ_Research (@ANZ_Research) July 17, 2023

Scouring through the RBA minutes released today, it’s clear the decision to hold at 4.1% was a close one.

Here are some points raised by the board in the July meeting:

• Inflation remains high in most advanced economies, driven by persistent services price inflation and high wage growth.
• China’s economic recovery has lost momentum, with indicators showing weaker conditions and a slowdown in the property market.
• Commodity prices have been mixed, with most lower than a year ago. Agricultural prices have declined, but potential supply disruptions remain a risk.
• Australia’s economic growth has slowed due to higher interest rates and high inflation, but the labour market remains tight.
• Inflation in Australia remains very high, and services price inflation continues to be a concern.
• Market expectations for central banks’ policy rates have increased, reflecting higher inflation expectations.
• The Australian dollar has been relatively stable, but concerns about output growth in China have affected its value.
• Expectations for the cash rate have increased in Australia, and the yield curve remains inverted.
• The Board considered increasing the cash rate further to combat inflation but decided to hold it steady at 4.1%.
• The Board will reassess the situation at the August meeting and may consider further tightening if necessary to achieve the inflation target.

RBA mins suggests hike v hold was close,but reiterated "some further tightening may be required" (given issues re services inf, wages & productivity) but 1/it appears to be paying more attention to rising mortgage payments, lags & recession risk & 2/Lowe softened the bias last wk pic.twitter.com/h069SZncxq

— Shane Oliver (@ShaneOliverAMP) July 18, 2023

Scouring through the RBA minutes released today, it’s clear the decision to hold at 4.1% was a close one.

Here are some points raised by the board in the July meeting:

• Inflation remains high in most advanced economies, driven by persistent services price inflation and high wage growth.
• China’s economic recovery has lost momentum, with indicators showing weaker conditions and a slowdown in the property market.
• Commodity prices have been mixed, with most lower than a year ago. Agricultural prices have declined, but potential supply disruptions remain a risk.
• Australia’s economic growth has slowed due to higher interest rates and high inflation, but the labour market remains tight.
• Inflation in Australia remains very high, and services price inflation continues to be a concern.
• Market expectations for central banks’ policy rates have increased, reflecting higher inflation expectations.
• The Australian dollar has been relatively stable, but concerns about output growth in China have affected its value.
• Expectations for the cash rate have increased in Australia, and the yield curve remains inverted.
• The Board considered increasing the cash rate further to combat inflation but decided to hold it steady at 4.1%.
• The Board will reassess the situation at the August meeting and may consider further tightening if necessary to achieve the inflation target.

RBA mins suggests hike v hold was close,but reiterated "some further tightening may be required" (given issues re services inf, wages & productivity) but 1/it appears to be paying more attention to rising mortgage payments, lags & recession risk & 2/Lowe softened the bias last wk pic.twitter.com/h069SZncxq

— Shane Oliver (@ShaneOliverAMP) July 18, 2023

ASX 200 down 0.38% at 7,270.6

Financials and Utilities are the only sectors that have gained ground over the morning, while the rest remain in the red.

The best individual performers:

• Block Inc [ASX:SQ2], up 3.42%
• Virgin Money UK [ASX:VUK], up 2.64%
• Graincorp [ASX:GNC], up 2.53%
• Incitec Pivot [ASX:IPL], up 2.23%
• AGL Energy [ASX:AGL], up 2.18%

The worst performers:

• Ansell [ASX:ANN], down 14.48%
• IGO Ltd [ASX:IGO], down 4.35%
• Lendlease Group [ASX:LLC], down 3.51%
• Aurizon Holdings [ASX:AZJ], down 3.50%
• Metcash Ltd [ASX:MTS], down 3.33%

All figures shown are from 12:48pm AEST

ASX 200 down 0.38% at 7,270.6

Financials and Utilities are the only sectors that have gained ground over the morning, while the rest remain in the red.

The best individual performers:

• Block Inc [ASX:SQ2], up 3.42%
• Virgin Money UK [ASX:VUK], up 2.64%
• Graincorp [ASX:GNC], up 2.53%
• Incitec Pivot [ASX:IPL], up 2.23%
• AGL Energy [ASX:AGL], up 2.18%

The worst performers:

• Ansell [ASX:ANN], down 14.48%
• IGO Ltd [ASX:IGO], down 4.35%
• Lendlease Group [ASX:LLC], down 3.51%
• Aurizon Holdings [ASX:AZJ], down 3.50%
• Metcash Ltd [ASX:MTS], down 3.33%

All figures shown are from 12:48pm AEST

Health and safety protection equipment business Ansell [ASX:ANN] shares tumbled today after warning of rising costs.

The company warned of job cuts in its manufacturing division and expects foreign exchange to be a moderate headwind in financial year 2024. However, it anticipates a material benefit to 2023 earnings from low employee incentive realisations that will not be repeated in financial year 2024.

The company says it expects to earn between $US1.17 and $US1.18 per share in financial 2023, in the middle of its prior guidance range.

It also said rising investment costs meant it expected financial 2024 adjusted earnings per share to be between $US92 cents and $US1.12 cents.

Statutory earnings per share, including investment costs, are expected between $US57 cents and $US77 cents.

Total interest costs on the company’s gross debt are projected to increase by $29 million in the upcoming fiscal year due to escalating global debt costs.

BHP, Rio Tinto, and De Grey Mining share prices are down this morning as investors digest trouble over the Pacific in China.

• Rio Tinto down 1.10%
• BHP down 1.35%
• De Grey Mining down 1.53%

June data out of China showed some positivity as industrial production (YoY) was up 4.4% — better than the forecasted 2.7%. However, the anemic forecast highlights the pessimism of the Industrial sector growth without real stimulus from Beijing.

GDP growth, comparing this year with the same quarter last year, showed the economy expanded 6.3% — this time lower than the expected 7.3%. Again the devil is in the details.

This time last year, Shanghai was in a two-month lockdown, and the economy had come to a screeching halt.

Because of the huge impact of the closure of Shanghai, which has 25 million people, comparing this spring and last spring provides ‘a misleading picture of China’s economic performance,‘ said Diana Choyleva, the chief economist at Enodo Economics in London.

Without real stimulus from leaders in China (something they have been apprehensive about doing), we may see suppressed commodity prices which could affect miners here.

BHP, Rio Tinto, and De Grey Mining share prices are down this morning as investors digest trouble over the Pacific in China.

• Rio Tinto down 1.10%
• BHP down 1.35%
• De Grey Mining down 1.53%

June data out of China showed some positivity as industrial production (YoY) was up 4.4% — better than the forecasted 2.7%. However, the anemic forecast highlights the pessimism of the Industrial sector growth without real stimulus from Beijing.

GDP growth, comparing this year with the same quarter last year, showed the economy expanded 6.3% — this time lower than the expected 7.3%. Again the devil is in the details.

This time last year, Shanghai was in a two-month lockdown, and the economy had come to a screeching halt.

Because of the huge impact of the closure of Shanghai, which has 25 million people, comparing this spring and last spring provides ‘a misleading picture of China’s economic performance,‘ said Diana Choyleva, the chief economist at Enodo Economics in London.

Without real stimulus from leaders in China (something they have been apprehensive about doing), we may see suppressed commodity prices which could affect miners here.

HUB24 released its June Quarter update this morning, showing the Funds platform had positive net inflows of $2.1 billion for the quarter — down 14.7% on pcp.

HUB24 was positive about today’s results, commenting that market uncertainty was creating softer flows across the market.

Platform FUA was $62.7 billion as of 30 June 2023, which included a positive market movement of $1.2 billion for the quarter.

HUB24 released its June Quarter update this morning, showing the Funds platform had positive net inflows of $2.1 billion for the quarter — down 14.7% on pcp.

HUB24 was positive about today’s results, commenting that market uncertainty was creating softer flows across the market.

Platform FUA was $62.7 billion as of 30 June 2023, which included a positive market movement of $1.2 billion for the quarter.

In a surprise call, Victorian Premier Dan Andrews announced this morning that he has cancelled the 2026 Commonwealth Games.

The games were budgeted to cost $2.6 billion, but Andrews announced on Tuesday that the state had withdrawn from hosting the event after new estimates showed it would cost ‘at least $6 billion’ and perhaps over $7 billion.

Andrews explained his decision this morning:

‘$6-7 billion is well and truly too much for a 12-day sporting event. I will not take money out of hospitals and schools in order to fund an event that is three times the cost is estimated and budgeted for last year.’

‘I’ve made a lot of difficult calls, a lot of very difficult decisions in this job. This is not one of them. Frankly, $7 billion for a sporting event, we are not doing that,’ he said.

‘We will instead deliver all and more of the legacy benefits in housing, sporting infrastructure, tourism and we will unpack all that tomorrow and throughout the week and there will be further details of all of that as well as the process to deliver that.’

Deputy Premier Jacinta Allen has promised that the government will not be walking away from promised sporting infrastructure.

She said this morning:

‘Each and every one of the community sporting infrastructure projects that we had been in detailed planning and design and conversation with councils and local communities, each one of those sporting infrastructure facilities will be going ahead and we will be wanting to push on and complete those projects with those local communities following consultation with them.’

The opposition has responded to this morning’s news, calling it a ‘massive humiliation’, and said that it will damage Victoria’s reputation.

In a surprise call, Victorian Premier Dan Andrews announced this morning that he has cancelled the 2026 Commonwealth Games.

The games were budgeted to cost $2.6 billion, but Andrews announced on Tuesday that the state had withdrawn from hosting the event after new estimates showed it would cost ‘at least $6 billion’ and perhaps over $7 billion.

Andrews explained his decision this morning:

‘$6-7 billion is well and truly too much for a 12-day sporting event. I will not take money out of hospitals and schools in order to fund an event that is three times the cost is estimated and budgeted for last year.’

‘I’ve made a lot of difficult calls, a lot of very difficult decisions in this job. This is not one of them. Frankly, $7 billion for a sporting event, we are not doing that,’ he said.

‘We will instead deliver all and more of the legacy benefits in housing, sporting infrastructure, tourism and we will unpack all that tomorrow and throughout the week and there will be further details of all of that as well as the process to deliver that.’

Deputy Premier Jacinta Allen has promised that the government will not be walking away from promised sporting infrastructure.

She said this morning:

‘Each and every one of the community sporting infrastructure projects that we had been in detailed planning and design and conversation with councils and local communities, each one of those sporting infrastructure facilities will be going ahead and we will be wanting to push on and complete those projects with those local communities following consultation with them.’

The opposition has responded to this morning’s news, calling it a ‘massive humiliation’, and said that it will damage Victoria’s reputation.

ASX 200 opens down 0.20% this morning, while Wall St continues its winning streak. Europe markets fell overnight, stoked from concerns of weak Chinese retail and industrial data that could drag America down.

Premier Dan Andrews announced this morning that the Commonwealth Games will not be held in Victoria as the cost would be $6-7 billion. More to follow.

• $AUD down -0.33% at 68.15 US cents
• ASX futures down -0.03% to 7,238.5
• S&P 500 up +0.39%
• NASDAQ up +0.93%
• DOW up +0.22%
• FTSE down -0.38%
• STOXX down -0.97%
• SSE down -0.87%
• Bitcoin down -0.30% to $US 30,149
• Spot gold up +0.11% to $US 1,955.37
• Iron ore up +1.29% to $US 112.38
• Brent Crude down -0.08% to $US 78.56pb

All figures shown are from 10:00am AEST

ASX 200 opens down 0.20% this morning, while Wall St continues its winning streak. Europe markets fell overnight, stoked from concerns of weak Chinese retail and industrial data that could drag America down.

Premier Dan Andrews announced this morning that the Commonwealth Games will not be held in Victoria as the cost would be $6-7 billion. More to follow.

• $AUD down -0.33% at 68.15 US cents
• ASX futures down -0.03% to 7,238.5
• S&P 500 up +0.39%
• NASDAQ up +0.93%
• DOW up +0.22%
• FTSE down -0.38%
• STOXX down -0.97%
• SSE down -0.87%
• Bitcoin down -0.30% to $US 30,149
• Spot gold up +0.11% to $US 1,955.37
• Iron ore up +1.29% to $US 112.38
• Brent Crude down -0.08% to $US 78.56pb

All figures shown are from 10:00am AEST