ASX News LIVE | ASX Set for Deep Red Day as Inflation Fears Spread

The ASX 200 closed down by -0.30% at 7,759.6 as markets steadily recovered from the sharp selloff this morning.

The Aussie benchmark started the morning down 1.1% as inflation figures yesterday topped 4% for the year to May.

That was up from 3.6% last month and above consensus expectations of 3.8%. The hotter-than-expected numbers have thrown economists’ and market expectations of cuts into next year.

Now money markets are pricing in a 78% chance of another rate hike by the RBA by November this year.

As a response today, the interest rate-sensitive Real Estate sector had another tough session, down -2.15%.

Goodman Group fell -1.06%, Westfield operator Scentre Group was down -2.21%, and Stockland fell nearly -5% in trading today.

Another poor performance on the benchmark was Immutep which fell -21.8% after its latest (seemingly positive) clinical trial results failed to wow shareholders, who dumped the stock.

Meanwhile, traders’ focus on exotic metals and minerals saw Encounter Resources gain +13.4 %, while Magnetic Resources also gained almost 8%.

Baby Bunting Group also had a strong showing today, gaining nearly 18% after releasing a positive trading update and an investor presentation today.

US clothing giant Lululemon has increased its stake in Australian clothing recycler Samsara Eco, participating in a $100 million capital raise that has brought in new venture investors.

Samsara Eco is known for using plastic-eating enzymes to break down apparel waste to make new garments.

The company has seen backing by Woolworths Group as well as the Australian National University for its novel approach to tackling the growing problem of garment waste.

Its major product for now has been recycled stockings, but it hopes to expand to many other garments with its ability to recycle Nylon ‘infinitely’ according to its website.

For more information, click here.

Shares in maternity and baby goods retailer Baby Bunting [ASX:BBN] are up by +23.48% in trading today as the company released its latest investor presentation, found here.

The presentation outlines their five-year strategy

The company which has seen its stock under pressure in recent months jumped today after releasing a trading update where it said total sales were up 1% in the past month on PCP.

Comparable store sales from 1 May 2024 to 24 June 2024 were down 0.7% on PCP, and the second half year to date was down 5.6% on PCP.

The group reaffirmed its FY24 pro forma NPAT, which is expected to be between $2–4 million.

Baby Bunting’s CEO, Mark Teperson said:

“While it is still early days it is pleasing to see the impact of some of our strategic initiatives on our comparable sales performance over the past eight weeks.”

The ASX 200 is down by around -1% around noon, with almost all sectors well in the red today after a broad selloff yesterday due to inflation concerns.

Only tech is holding on flat following the Nasdaq while the other interest rate sensitive sector Real Estate has seen another tough morning, down by -3% in trading this morning.

Meanwhile, in commodities we’ve seen prices turn down as the rising USD index presses on trade as well as economic concerns rippling through markets which lack direction.

In individual stock peformances today we’ve again seen Niobium hopeful Encounter Reources jump, with the stock price up +10.7%.

On the other end of the market, down a whopping 23% is Immutep which has sunk after releasing its latest cancer trial results.

The results themselves were overall positive but maybe investors were expecting a higher peformance from its treatment.

Here is a basic summary of the results:

‘The primary focus of the trial was to assess how efti, Immutep’s proprietary soluble LAG-3 protein and MHC Class II agonist, performs alongside KEYTRUDA, a well-established anti-PD-1 therapy from Merck & Co.

 

The results revealed that the combination therapy significantly outperformed KEYTRUDA monotherapy across various levels of PD-L1 expression.

 

Notably, patients with high PD-L1 expression (CPS >20) exhibited an overall response rate (ORR) of 31.0%, compared to 18.5% with KEYTRUDA alone in the randomised Cohort A of the trial.’

 

Southern Cross Media Group Limited [ASX:SXL] has rejected the proposed acquisition by Australia Community Media (ACM) to acquire certain assets of ACM.

In the review, Southern Cross acknowledged that ‘some appeal‘ was found in some of the digital assets but said that the deal was a strategic misalignment as it did not align with its audio-focused strategy.

SCA concluded that the acquisition would not create value for its shareholders and that it would not pursue it any further.

Southern Cross’s guidance remains unchanged for the full financial year.

Shares in Southern Cross are down by -1.6% in trading this morning, at 60.5 cents per share.

We’ve seen a big shift in money markets throughout yesterday and today, which now favour a rate hike this year.

Here’s the latest chart from AMP chief economist Shane Oliver, which shows money markets pricing in a 78% chance of another quarter-percent rise by the RBA by November.

This is a huge shift from the start of the year when the focus was on 6-7 cuts coming through the year.

Back then, predictions for the first cuts were May, while I maintained that it was more likely August or September. Now, bets are shifting into next year, with many saying May 2025.

Looking at these past predictions is important to see how fickle these markets can be.

So we will await the next employment report on the 18 July for our next major sign of the economy’s health.

Source:https://x.com/ShaneOliverAMP/status/1806125141124162021

Good morning. Charlie here,

The ASX 200 opened down by -1.60% to 7,658.7 as inflation concerns washed over the local market after yesterday’s hot CPI print.

Inflation data for May came in a 4%, above the prior month’s 3.6% and well above expectations of 3.8%.

With this data point, we now have three months of inflation trending up, a reacceleration that was the RBA’s greatest fear.

The markets reacted swiftly to yesterday’s print, dropping sharply as economists and traders pushed back their expectations of interest rate cuts into next year.

The market is signalling a 37% chance of a rate hike in August now, according to RBA rate tracker.

For the next signposts on the RBA’s next move in August, traders will be looking towards the June employment report (18 July) and the Q2 CPI report (31 July).

On Wall Street, tech rallied on the Nasdaq as Amazon, Apple, and Tesla pushed higher, while the other indices remained muted without a clear catalyst.

Wall Street: S&P 500 +0.16%, Dow flat, Nasdaq +0.49%.

Overseas: FTSE -0.27%, STOXX -0.41%, Nikkei -0.78%, SSE +0.76%.

The Aussie dollar +0.07% to US 66.44 cents.

US 10-year bond yields +9bps to 4.34%.

Australian 10-year bond +22bps to 4.42%.

Gold -0.88% to US$2,299.76, Silver -0.51% to US$28.73.

Bitcoin -1.22% to US$60,996, Ethereum -0.54% to US$3,372.

Oil Brent +0.38% to US$85.25, WTI Crude -0.23% to US$80.71.

Iron ore +3.2% to US$106.60 a tonne.