9h agoFri 6 Dec 2024 at 2:16am
Market snapshot
ASX 200: -0.6% to 8,420 points (live values below)Australian dollar: -0.4% to 64.27 US centsNikkei: -0.9% to 39,059 pointsHang Seng: +0.3% to 19,625 pointsShanghai: Flat at 3,370 pointsS&P 500: -0.2% to 6,075 pointsNasdaq: -0.2% to 19,701 pointsFTSE: +0.2% to 8,349 pointsEuroStoxx 600: +0.4% to 519 pointsSpot gold: +0.2% to $US2,636/ounceBrent crude: -0.1% to $US72.02/barrelIron ore: 0.5% to $US104.35/tonneBitcoin: -1.2% to $US97,852
Prices current around 4:30pm AEDT
6h agoFri 6 Dec 2024 at 5:44am
That’s a wrap for this week
That’s all from us this week everyone! Have a great weekend – only 20 sleeps until Christmas!!
Loading6h agoFri 6 Dec 2024 at 5:42am
ASX closes lower
The Australian sharemarket fell on Friday mimicking Wall Street’s drop that reflected concerns in the US about upcoming jobs figures.
The S&P/ASX 200 fell -0.6 per cent to 8,420-points at the close.
Almost all sectors closed in the red with utilities nad education bucking the trend.
Bapcor – a vehicle parts company – was today’s top mover at the closer gaining +3 per cent.
It was followed closely by Bellevue Gold (+2.6%) and Nine Entertainment (+2%).
Among the bottom movers was mining company Iluka Resources (-10%) and Zip Co (-7.4%).
6h agoFri 6 Dec 2024 at 5:42am
Physically blocking access to a workplace probably is illegal
Thanks Michael. Just seems crazy that it’s not illegal to purposefully block a company from accessing its own workplace. Protect industrial action absolutely, but preventing businesses from operating doesn’t serve the community’s interest at all so one would hope we have fit for purpose laws for such basic rights like enabling staff to safely attend work
– Alex
Hi Alex, just to clarify, physically blockading a workplace probably is illegal, it just doesn’t fall under the Fair Work Act.
If you physically stop someone from accessing their workplace that is likely to breach a range of common law or criminal law provisions, such as trespass, public nuisance, criminal damage and/or assault, depending on how you do it.
If a blockade with those behaviours was occurring, then that would generally be a matter for the police and the courts, not the Fair Work Commission, as explained by Professor McCrystal in the article.
7h agoFri 6 Dec 2024 at 4:48am
Prospects of February rate cut “firming”: J.P.Morgan
Analysts at investment bank J.P.Morgan have given their take on when the RBA might start cutting rates.
They say this week’s GDP showed the economy was “running well below potential” but while a rate cut wasn’t far off, we should not expect a rate cut at the next RBA meeting on Tuesday:
“Next week, we expect that sense of restraint to still ring out in the commentary and press conference, falling short of a fulsome ‘set-up’ for a cut in February.”
“The RBA board is very likely to keep the cash rate steady next week, but prospects for a first cut in early 2025 are firming.”
J.P.Morgan said the way they saw inflation tracking, the first rate cut could come in the RBA’s first meeting of next year:
“we expect January’s data will be enough for the board to deliver a first cut in February”
7h agoFri 6 Dec 2024 at 4:35am
Update
I’m all for supporting regional banks to help customers. Also the 4 big banks are making billions,so they can afford it. Also the CBA had to back down on its $3 charge to withdraw money from people’s own Accounts. Very shonky CBA…
– Merrowyn
Thanks for your comment. Merrowyn. CBA’s decision has certainly provoked some strong responses from readers. As always, we welcome all views from our audience
7h agoFri 6 Dec 2024 at 4:25am
ASX trading lower as miner plummets following cost blowout
The Australian share market is continuing its losses, down 0.6% at 3:15 AEDT.
All sectors are in the red except academic and utilities.
Here are the top and bottom movers:
Iluka Resources is leading the losses after the government announced it would give an additional $400 million loan for the company’s rare earths refinery. The miner will have to cough up an extra $214 million in cash equity on top of the $200 million cash equity and stockpile already earmarked for the project.
Analysts at Sandstone Insights raised concerns over Iluka’s high upfront funding and its net debt:
“The revised deal with the Australian government for the Eneabba rare earth refinery is less favourable than ILU would have desired”
Iluka’s project is part of a push by the government to develop new sources of critical minerals to diversify the supply chain away from top producer China.
With Reuters
8h agoFri 6 Dec 2024 at 3:57am
Woolworths v Union decision due at 4.15
We’ll get a decision today — Emilia Terzon reports from inside the Woolworths v United Workers Union hearing:
Closing submissions have finished at the Fair Work Commission hearing brought by Woolworths against the union leading strikes at its distribution hubs.
The supermarket’s lawyers have argued picketing outside the hubs is impacting on bargaining, while the UWU’s legal team says there’s no evidence of this.
Commission Deputy President Boyce has just called a break and says he’ll deliver a decision at 4.15pm this afternoon.
Stay tuned for what could be a precedent-setting outcome.
8h agoFri 6 Dec 2024 at 3:55am
We’re in a ‘per capita recession’. Here’s what that means
This week revealed fairly unsurprising and yet dismal Australian economic growth figures.
At the bottom of this post is a comprehensive article that chews through the data.
One of the interesting elements is in how it affects you. That’s because while the GDP number (the value of all the goods and service produced in a certain period) is positive… once you divide it by the number of people it’s negative.
Here’s AMP’s Dr Shane Oliver with his take.
“The ‘per capita recession’ continued with GDP per person down in 8 of the last 9 quarters. Were it not for strong growth in public demand and strong population growth Australia would be in recession as the former is partly offsetting the near recessionary conditions in private spending and the latter is keeping the economy growing despite the fall in GDP per person.
“However, there are three big problems with this:
“Firstly, the fall in per capita GDP is an indicator of falling living standards per person in Australia. Strong population growth has covered this up in terms of traditional GDP but it doesn’t drive higher living standards per person in the short term and we can’t rely on strong population growth to keep the economy going as its caused an undersupply of housing and both sides of politics are now looking to slow it down to more sustainable levels.
“Second, the surge in public spending to a now record 28% of GDP has made the RBA’s job in controlling inflation harder because it’s kept demand in the economy higher than otherwise would have been the case
“Finally, the surge in public spending is exacerbating Australia’s productivity slump with productivity down another 0.8% over the last year as private market sector productivity is invariably higher than public sector productivity and as public spending squeezes out private business investment.”
GDP per capita is the value of goods and services produced, divided by the number of people(Shane Oliver AMP, ABS)
This is why people don’t rush to invite economists to Friday night drinks.
8h agoFri 6 Dec 2024 at 3:47am
Blocking access to distribution centres
It’s not really the strike action that’s affecting the Woolworths supply chain is it? Those workers could strike and have no impact as Woolworths has other staff that want to get into the DC and work, it’s the blocking of access to the DC that’s disrupting farmers’ livelihoods and causing other staff (like DC and store night fill) to lose shifts. Has the UWU made any comment about the other people’s jobs and income they’re affecting or do they not care?
– Alex
I think this section from Emilia and Dan’s story about today’s Fair Work action by Woolworths, quoting industrial law expert Professor Shae McCrystal goes to this issue.
The TLDR is that, if Woolworths thinks pickets are blocking access to its sites, its remedies traditionally lie with the courts, not Fair Work, with potential causes of action such as trespass, public nuisance, false imprisonment, assault, etc — if it could prove such offences.
“The underlying strike action, not going to work, is a legally protected action,” Professor McCrystal said.
“The picket itself is not, it doesn’t fall into the definition of an industrial action in the Fair Work Act (laws that govern work and disputes).
“So it’s neither protected or unprotected.”
Normally, companies that are being hindered by picket lines — protests outside sites — ask the courts for an injunction. Sometimes, they will use arguments about, for example, interrupting traffic or access.
But there’s one big problem with that.
“There’s nothing inherently unlawful about standing on public land.”
The Fair Work Commission is not a court, and that is not what Woolworths is doing.
You can read more via the link below.
8h agoFri 6 Dec 2024 at 3:45am
Union lawyer not a fan of Woolworths arguments
We heard earlier about the “novel” argument that Woolworths is pursuing in the Fair Work Commission.
Labour law professor Shae McCrystal said it was uncharted territory because the supermarket giant was trying an argument not previously attempted in the Commission.
Essentially, Woolworths is arguing that the union is undermining its own attempts to bargain with the company because it is promoting a picket line.
It argues the union is breaching “good faith bargaining” — the process by which parties negotiate with the best of intentions to reach an agreement — and it is doing it through actions that have long been practised as part of collective bargaining and union activity.
“What they’ve got to try and do is argue the picket is undermining collective bargaining … that the actions of unionists in asserting their claims undermines the bargaining process — that’s quite a novel argument,” Professor McCrystal said.
Unsurprisingly, UWU barrister Hugh Crosthwaite is not a fan of the idea.
“On a basic assessment, it is utterly implausible.”
8h agoFri 6 Dec 2024 at 3:34am
UWU finishing up in Woolworths strike hearing
My colleague Emilia Terzon is reporting from inside the Fair Work Commission hearing brought by Woolworths against the union that’s organising a picket line that has caused empty shelves around the nation by disruptions at a key distribution centre.
The supermarket giant is applying to the commission for a bargaining order to move along picket lines outside distribution hubs at the centre of the strike.
It has been a fiery hearing.
Woolworths says picket lines disrupting supplies to its supermarkets are a “metaphorical gun” aimed at the company by its own workers.
The supermarket’s legal counsel, Marc Felman KC, has called these picket lines “obstructive” and “capricious or unfair” and described them as a “metaphorical gun”, that is having the effect of not allowing workers who may want to continue working to enter the site.
Here’s Emilia’s latest:
The UWU is now making closing submissions at the Fair Work Commission hearing brought by Woolworths, as strikes led by the union continue to upend the supermarket’s supply chain.
The UWU’s barrister, Hugh Crosthwaite, is telling the hearing that there is no proof that the picket lines outside Woolworths’ distribution hubs are impacting on the ongoing negotiations between the union and the company.
Crosthwaite: “The union’s position is that the conduct at the (Dandenong site) does not have any impact on bargaining and therefore it cannot undermine it.”
It’s unclear when the hearings will wrap up or if the Commission will make a decision on an order today.
8h agoFri 6 Dec 2024 at 3:12am
Door-to-door energy marketers hit with $10M penalty
Hi team, just jumping in with some news from Victoria that could have substantial ramifications nationally.
If you don’t like people coming to your door offering you a “better deal” on your energy, the Essential Services Commission has done you a solid.
The Victorian agency that oversees the provision of power, water and other essentials has forced company Sumo to pay a $10 million penalty after dragging it to court.
The Supreme Court of Victoria has ordered retailers Sumo Power Pty Ltd and Sumo Gas Pty Ltd to pay for unlawful door-to-door marketing and failures related to its “best offer” messaging.
It’s the largest penalty ever imposed for breaches of Victoria’s energy/consumer laws.
In a statement of agreed facts submitted to the Court, meaning both parties agree what happened, Sumo admitted and the Court found it engaged in prohibited door-to-door marketing over seven months in 2022, affecting 5,941 Victorian energy consumers.
Essential Services Commission Chairperson Gerard Brody said that Sumo had committed to changing its practices:
“Victoria has banned high-pressure door-to-door sales by energy retailers, protecting consumers from aggressive sales tactics. Strict rules mandating clear ‘best offer’ messages are designed to help Victorians save money. With cost-of-living pressures continuing to affect so many, compliance with these laws is not optional — it’s essential.”
The big whack will force retailers everywhere to check that what they’re doing doesn’t break the law when they try and sign up consumers. Knock knock!
9h agoFri 6 Dec 2024 at 3:04am
Former RBA chief economist questions the bank’s current economic understanding
Westpac’s chief economist Luci Ellis has released yet another highly thought-provoking Friday note.
Her commentary is often very insightful, not least because she was (until late last year) the assistant governor (economic) at the Reserve Bank, effectively its chief economist.
Even though Westpac is among the majority of analysts who have shifted their rate cut forecasts back to May, she has expressed concern that the RBA might be misreading some key economic trends.
Mistake number 1, according to Ellis:
“The RBA has been sanguine about this weakness in private demand. It assesses that aggregate demand has been outstripping aggregate supply, implying that a period of weak demand is needed to close the gap,” she wrote.
“In our view, though, the output gap has largely closed. The further deceleration in wages growth, unit labour cost growth and output price inflation in the latest quarter are all consistent with this.”
The “output gap” she speaks of is when aggregate (total) demand across the economy for goods and services is above the economy’s current capacity to supply the desired quantity. That means prices get bid up and you get higher inflation.
She is not alone in believing there is no longer an “output gap” — economists at JP Morgan and CBA agree, among many others.
If the output gap has closed, then inflation should not be a problem. Ellis thinks it isn’t, which is mistake number 2:
“[The RBA’s analysis] does not adequately allow for lags in price adjustment or the fact that the usual year-ended calculation of inflation incorporates stale information. Nor does it make a distinction between stable above-target inflation and declining above-target inflation.”
She also argues much of the decline in productivity is due to the rising public sector share of the economy and employment.
That’s because much public employment is in the care sector, where measured productivity is lower than the private sector (partly because it is so hard to measure the productivity of services like aged care, education and nursing).
When this transition towards the public sector ends, as it eventually will, Ellis warns policymakers and the economy may be in for a “shock”, mistake number 3:
“The Australian economy could therefore be in for a period of even more subdued growth and much weaker employment than has occurred recently. And while we expect private investment to become a more prominent driver heading into 2026 — reflecting the need to expand capacity, transition to lower carbon emissions, and adopt new technologies — this may be slow to gain momentum.”
9h agoFri 6 Dec 2024 at 2:25am
The government’s economic and election quandary
A really good piece of political analysis from Michelle Grattan today.
It neatly sums up the key battlegrounds for next year’s election.
While the economic situation is tough for the government, the opposition is also not without some vulnerabilities as the election campaign approaches.
10h agoFri 6 Dec 2024 at 2:11am
ASX extends losses on widespread falls
It’s just one of those days on the ASX — most stocks are slightly on the nose.
Roughly three-quarters of the top 200 stocks are in the red, with all sectors in the red except utilities, real estate and education.
Iluka Resources is the biggest loser, despite news that it has secured a further $400 million loan commitment from the federal government for its planned rare earths refinery in Western Australia.
That’s on top of $1.25 billion in Future Made in Australia scheme Commonwealth loan funds already committed.
However, there are strings attached. The company has had to stump up a further $214 million of its own funding towards the refinery, on top of an initial $200 million investment.
The company and government have also established a joint $150 million cost overrun facility, which seems prudent for a project that is already forecast to cost a lot more than was originally budgeted.
Another big loser today is Star Entertainment, which continues its (not so) slow share price bleed.
ASX 200 top and bottom movers around 1:00pm AEDT(LSEG)
Overall the benchmark ASX 200 index is down 0.5% to 8,429 points.
The Australian dollar is down slightly at 64.2 US cents, and Bitcoin continues to trade below $US100,000 having breached that barrier for the first time around this time yesterday.
10h agoFri 6 Dec 2024 at 1:31am
CBA sticks with February rate cut forecast
The Reserve Bank board will be holding its final meeting for 2024 next Monday and Tuesday, and we’ll hear from governor Michele Bullock at a press conference after the interest rate decision is announced on Tuesday afternoon.
We’ll also hear from her deputy, Andrew Hauser, at an Australian Business Economists dinner on Wednesday evening.
Ahead of the meeting, the Commonwealth Bank’s head of Australian economics Gareth Aird has put out a preview.
CBA has consistently had a more “dovish” view than most other market economists, and the RBA, believing that the economy is very weak and rates should fall sooner rather than later.
Mr Aird thinks the RBA may come around to this view, but won’t yet be ready to flag such a shift after next week’s meeting.
“We think that the Statement accompanying the December on hold decision is likely to reiterate that ‘the Board is not ruling anything in or out’. Governor Bullock also struck this tone at her most recent speech on 28 November, albeit the speech preceded the Q3 24 national accounts,” Mr Aird writes.
“The November labour force survey is released on Thursday 12 December (i.e two days after the Board decision). If the data indicates the labour market has loosened over the month, as we anticipate, the RBA can use the December Board Minutes to provide a more dovish tilt in communication.
“The Q4 24 CPI (due 29 January) could be the ‘smoking gun’ that gives the green light for a February rate cut (February Board decision on 18/2).
“That is our expectation and we continue to hold our base case that the RBA will commence an easing cycle in February 2025.
“The risk clearly sits with a later start date. But here we note that money markets have moved over the past week more into alignment with our call (primarily off the back of the weak set of Q3 24 national accounts).
“As we go to press markets have ascribed a roughly even chance of a 25bp February rate cut. Last week markets had priced just a ~25% of a February rate cut.”
It must be noted that CBA has had to consistently pull back its rate cut expectations in the face of stubborn inflation and a surprisingly resilient labour market. It had been forecasting a rate cut before the end of this year until not that long ago.
The three other major banks don’t expect rates to fall until May.
10h agoFri 6 Dec 2024 at 1:19am
Number of multiple job holders hits record-high
The new ABS data today, on multiple job holders in September, show the number of multiple job holders has hit a record high.
In September 2024, there were 986,400 multiple job-holders, compared to 13.5 million single job-holders. That’s up from 959,500 multiple job-holders in June.
That means 6.6% of employed people have one or more jobs.
Between 1995 and 2019, the multiple job-holding rate remained between 5% and 6%. However, following a large decline at the onset of the COVID-19 pandemic in June 2020, the multiple job-holding rate rose and has remained at an all-time high between 6.5% and 6.7% since December 2022.
In September 2024, the rate of multiple job-holding was higher for women (7.7% compared with 5.8% for men).
Employed people aged 20-24 were most likely to hold more than one job in September 2024 (8.7%). In contrast, 5% of employed people aged 65 years and over were multiple job-holders.
11h agoFri 6 Dec 2024 at 1:08am
Why wouldn’t you hold onto it?
If a currency is appreciating in value, doesn’t that incentivise people to save rather than spend? How do we go from crypto as an investment to crypto as a currency?
– Andy
That’s a great question.
If you knew/believed/hoped that the currency was always going to be worth more tomorrow, why would you spend it today? You wouldn’t. You’d hold on to it, and you’d start thinking about how you might figure out how to sell it at some peak, and then buy more of it on some dip. And that risks getting you into the world of speculation and gambling.
How could you flip it, so it’s used as a currency? As a start, I guess it would have to start resembling a normal currency, where its value would be relatively stable over time.
But having said that, I can understand the motivation to get into something like Bitcoin (this is not investment advice!). When I look at how the value of Australia’s fiat currency has been obliterated when you try to buy a house with it, it’s depressing.
For example, in my grandpa’s day, it was just assumed that house prices would be something like 2x to 3x your household income. And why wouldn’t you assume that? As property prices increased, wages increased in line with them, and there didn’t seem to be a problem. But now, with house prices being 8x, 9x, up to 14x household incomes, the value of the dollar has been obliterated when you try to buy a house with it.
So when you hear stories of people getting rich quick with crypto, those stories are obviously alluring. If crypto has the potential of helping you to do something in the material world (ie buy a house) that’s becoming increasingly difficult to do in the real world, with our fiat currency, why wouldn’t you think about jumping into it? I understand the reasoning.
In my previous post I mentioned how Warren Buffett has been a critic of crypto in the past. But he’s also said this: “I’m sympathetic to people that own it.”
But again, this isn’t investment advice. I don’t own any cryptocurrency, and never have.
We’re just having a chat (and killing time before the second test kicks off between Australia and India this afternoon, in Adelaide).
11h agoFri 6 Dec 2024 at 12:27am
There are many reasons why
Why would anyone buy Bitcoin? We’re got one of the best cash systems in the world. It’s pretty hard to fake Ozzie cash. It’s been done, but it’s quite difficult.
– Merrowyn
Hi Merrowyn,
There are plenty of reasons why people buy cryptocurrencies. And the deeper into the weeds you go, the more interesting the reasons become.
For example, there’s a big ideological element. People like the US billionaire Peter Thiel are very open about the fact that they want to destroy fiat currency, and crypto will help to do that.
Famously, in 2022, Thiel called Warren Buffett a “sociopathic grandpa” who was part of the “finance gerontocracy” because he was part of the group of influential people who was holding back crypto’s wider adoption.
It goes without saying that Thiel has been a huge investor in cryptocurrencies, and he’d benefit from their values increasing.
But as I said, that’s just one aspect of the whole thing. It’s just a fascinating one that often gets lost in the reporting.
