ASX News Today LIVE | XJO Flat as Market Mulls Inflation Data

Advanced memory tech developer Weebit Nano [ASX:WBT] closed 11.4% lower on Thursday, extending losses this week to over 30%.

The selling was kickstarted by the resignation of director Fred Bart, announced on Tuesday.

Weebit shares sank 18% on the news before trading in the stock was suspended.

Today, trading resumed with WBT releasing an update on its ReRAM IP along with its response to ASX queries surrounding Bart’s exit.

In the release to the market on Tuesday announcing the resignation, Bart offered these comments:

“With all the pillars now in place for Weebit Nano’s next phase of growth, and increasing demands on my time from my other Board roles and private companies, now is the right time to step down from the Weebit Nano Board.”

Investors thought now was actually the wrong time to leave, if it really was true that the firm was set for the next phase of growth.

In its response to the ASX, Weebit’s board said it does not consider Bart’s resignation price sensitive.

If his resignation was not price sensitive, how did the board explain the share price slump?

Short sellers, among other things:

‘Since entering the ASX300 WBT shares have regularly been the target of short sellers, and the share price has fluctuated significantly during this time.’

Struggling purveyor of olfactory delights (home fragrance products like scented candles) Dusk [ASX:DSK] is mending its fire.

After dropping over 50% year to date, Dusk is staging a mini comeback.

Over the last few days, Dusk is up ~15%.

Have the bargain hunters sniffed out value?

Dusk is currently trading at a trailing P/E of 3.8.

Let’s see if this rally lasts.

Australian job vacancies fell 2% (or 9,000) to 432,000 in the May quarter but ‘remain high’, according to the latest release from the ABS.

Vacancies fell for the fourth straight quarter but from vertiginous heights.

ABS’s Bjorn Jarvis said:

‘While job vacancies have fallen by around 10 per cent over the past year, they were still high – around 89 per cent higher in May 2023 than in February 2020, just before the start of the COVID-19 pandemic.

‘This May saw businesses continuing to report difficulties in recruiting and retaining staff.’

That’s astounding!

May vacancies are nearly double those in February 2020, just before the pandemic!

Jarvis further noted the percentage of businesses reporting at least one vacancies actually rose this quarter:

‘The percentage of businesses reporting at least one vacancy has been above 11 per cent since August 2020, and higher than 20 per cent since May 2021. This highlights the impact of a tight labour market on a broad range of businesses.’

Source: ABS

We can see the elevated level of vacancies another way.

AMP’s Shane Oliver graphed the number of job vacancies to the number of unemployed.

While Aust job vacancies are falling they remain very high relative to the number of unemployed people. pic.twitter.com/bjzslV5Hi1

— Shane Oliver (@ShaneOliverAMP) June 29, 2023

The results are in!

The ABS reported that Australian retail turnover rose 0.7% in May, up from zero change in April and a 0.4% rise in March.

The Bureau’s Ben Dorber said turnover was ‘supported by a rise in spending on food and eating out, combined with a boost in spending on discretionary goods.’

A boost in spending on discretionary goods?! What!

Haven’t we seen multiple discretionary retailers telling us sales are down?

The ABS did say the retail categories to fall this month were clothing, footwear & personal accessory retailing (down 0.6%) and department stores (down 0.5%).

Dorber concluded:

‘This latest rise reflected some resilience in spending with consumers taking advantage of larger than usual promotional activity and sales events for May.

‘Just as we saw during the November Black Friday sales last year, consumers appeared to take extra advantage of discounting during large sales events in May in response to cost-of-living pressures.’

Source: ABS

Will the Reserve Bank raise rates at the July meeting?

Or will Wednesday’s monthly CPI indicator reading for May lead the central bank to keep rates steady?

The monthly CPI indicator rose 5.6% YoY in May.

However, excluding volatile items, inflation rose 6.4% YoY in May, down marginally from the 6.5% recorded in April.

May's trimmed mean fell from 6.7% to 6.1%.

What will the #RBA do at the July meeting? #auspol #ausbiz #ASX

— Fat Tail Daily (@FatTailDaily) June 29, 2023

According to the ASX’s cash rate tracker, the market is overwhelmingly pricing in no change at the upcoming RBA meeting. Just ten days ago, the market thought it more likely than not the central bank will raise rates to 4.35% in July.

It’s a fast moving game, this one.

Source: ASX

The ASX 200 finished 1.1% higher yesterday, its best day since April.

That was probably driven by the monthly CPI indicator for May.

Headline inflation came in lower than expected at an annual rise of 5.6% in May, with forecasts of a 6.1% gain.

However, when excluding volatile items, the decline in inflation was much more modest.

The annual increase for the monthly CPI indicator excluding volatile items like travel and automotive fuel was 6.4% in May, slightly lower than the 6.5% rise recorded in April.

Trimmed mean inflation — a measure tracked by the Reserve Bank — dropped from 6.7% to 6.1%, stilled quite elevated.