🦘 ASX Week In Review: 27/09/24

Hey mate, hope you had a great weekend! Monday mornings aren’t great for most but I hope this update makes your day a little bit easier.

Let’s have a look at the market snapshot before jumping into the news:

Week In Review - TLDR

This week, the ASX experienced quite the drama, kicking off with a dip before rallying back over the 8200 mark as investors found their groove once again.

The Reserve Bank of Australia (RBA) held the cash rate at 4.35%, which had been expected.

However, some downbeat comments about inflation projections sent shares tumbling temporarily.

Currently, while headline inflation is hovering around 2.7%, underlying inflation sits stubbornly higher at 3.4%, meaning the RBA's work is far from over. 

Across the pond, the US is bracing for a recession despite the Fed’s efforts to combat inflation.

On a more uplifting note, luxury platform Cettire soared 75% after a stellar revenue report, and Boss Energy gained from a Microsoft partnership in a nuclear deal. 

Stay tuned for what next week has in store!

RBA Hits the Pause Button: Interest Rates Stay Put Despite Inflation Woes

The RBA has decided to keep interest rates at a steady 4.35% during its latest board meeting, citing ongoing high inflation as the primary concern. 

This marks the seventh consecutive time the RBA has held rates steady, much to the relief of homeowners grappling with rising costs.

While inflation has decreased, it's still above the RBA's comfort zone of 2-3%, prompting the board to remain cautious about future rate adjustments.

They hinted that further rate hikes aren’t off the table as they aim to bring inflation down sustainably.

Interestingly, while other countries are cutting rates, the RBA is taking a different approach, keeping a watchful eye on economic uncertainties and market movements.

Treasurer Jim Chalmers noted that the pause in rate hikes is a good indicator of progress, but warned that the federal government is not rushing to intervene in the RBA's decisions.

With speculations on when cuts might occur, it looks like borrowers might have to hold onto their wallets a little longer!

Economic Blues: Australians Face Steepest Misery Since 2011

A recent study reveals Australians are slogging through the toughest economic times we've seen since 2011.

The Committee for Economic Development of Australia's latest research highlights that inflation has been a major contributor to this economic misery, affecting households from mid-2021 to mid-2023.

Despite a slight decrease from the COVID-19 peak, the situation still remains dire.

The misery index combines key economic indicators like inflation, unemployment, and interest rates, painting a bleak picture for many.

However, not every expert agrees with this gloomy outlook. Some argue that with unemployment steady at 4.2%, the term "economic misery" might be overstating the situation.

Instead, they suggest it’s about managing living standards against rising costs rather than a full-blown crisis.

As Australians face higher living costs, the emphasis seems to be shifting toward improving productivity in order to tackle inflation and enhance overall economic well-being.

Aussie Economy Set to Bloom: OECD Predicts Strong Growth Ahead!

Looks like the Aussie economy is gearing up for a sprightly 2025, according to the OECD's latest forecasts!

GDP growth is expected to leap to 1.8%, outpacing many big players like the US and Germany.

While 2024 is predicted to bring a modest 1.1% growth, this still presents a rosy picture compared to the 2% increase seen in 2023.

Inflation is also on the decline, with projections dropping to 2.4% in 2025, firmly within the Reserve Bank of Australia’s sweet spot of 2-3%. 

Recent reports show headline inflation already dipping from 3.5% to 2.7%, sparking buzz for potential interest rate cuts before Christmas.

The OECD notes that global GDP growth is stabilizing, bolstered by a recovering trade scene.

However, it also warns of risks, such as geopolitical tensions that could impact investments.

So, while we’re not out of the woods yet, it seems a green light is shining ahead for Oz's economy!

Supermarket Showdown: ACCC Accuses Coles And Woolworths of Deceptive Discounts!

Hold onto your shopping carts!

The Australian Competition and Consumer Commission (ACCC) has struck a blow against major supermarket players, Coles and Woolworths, accusing them of playing mind games with their prices.

They claim that the "lower-for-longer" discounts on everyday goodies like Tim Tams and Coca-Cola were simply tricks to make customers feel like they were scoring a deal.

According to the ACCC, these discounts were more smoke and mirrors than savings, as supermarkets allegedly jacked up prices before showcasing their “Down Down” promotions.

With inflation hitting households hard, these accusations couldn't come at a worse time, feeding into the rising public frustration with grocery costs.

While Coles is fighting back, claiming the allegations spring from a tough inflationary period, the ACCC's allegations could seriously tarnish the trust supermarkets have with consumers.

The Star Strikes a Chord: $1.7 Billion Loss Leads to Job Cuts and Asset Sales

The Star Entertainment Group is feeling the heat after revealing a staggering $1.69 billion loss for the year ending June 30.

In response, CEO Steve McCann announced plans to cut approximately 350 jobs and sell off assets, including some hotels in major cities like Sydney and Brisbane. 

After securing a lifeline with a last-minute $200 million loan from banks, the company aims to navigate through challenging times marked by a drop in revenue and a wave of regulatory scrutiny.

Foot traffic at their casinos has plummeted, and new regulations are adding to the pressure.

With a focus on cost savings of $100 million, The Star is also freezing salary increases and scaling back on consultants.

As the company faces serious financial scrutiny, the Queensland government is considering tax relief, but negotiations have stalled due to disputes over executive bonuses. 

It’s a rocky road ahead, and the stakes are undeniably high for The Star.

Macquarie Bank's Pricey Lesson: Nearly $5M Fine for Energy Market Missteps!

Hold on to your wallets!

Macquarie Bank has just been hit with a staggering $4.995 million fine by ASIC for over 50 breaches that could lead to soaring energy bills for everyday Aussies.

The trouble began during a period of global market chaos when Macquarie let three clients make suspicious trades in the ASX 24 electricity futures market, right before the daily closure. 

This kind of market manipulation isn't just a technical foul; it could bump up energy pricing and ultimately affect consumer costs when living expenses are already tight.

Macquarie, which handled around 58% of all electricity futures orders last year, didn't contest the breaches and accepted the record penalty.

ASIC chair Joe Longo pointed fingers at the bank for failing to act, raising concerns about a potential systemic culture issue within the organization.

Shady trades? Just another reminder of how banking can impact your pocket!

Afterpay Steers Users Towards Safer Spending with New Cap

Get ready to rein in your spending, Afterpay users!

The popular Buy Now Pay Later service is rolling out a new spending cap feature to help customers avoid racking up debt without realizing it.

In an industry that's mainly unregulated, more than two in five Australians have dabbled in BNPL services in just the last six months, with younger generations leading the charge.

Afterpay's users currently enjoy an initial borrowing limit of $600, which can gradually increase with responsible use.

The new feature, set to launch in late 2024, will allow users to set their own limit for spending in the app, keeping their finances in check.

This comes amid growing government scrutiny over BNPL services, aiming for better user protections and background checks.

Let’s face it, with late fees hitting 20% of users monthly, some extra guidance could really help make those shopping sprees a bit less stressful.

Debt Dilemma: Aussies Feeling the Pinch as Savings Hit Rock Bottom

Ouch! It’s getting tight out there for Aussie wallets as new data reveals a significant savings struggle.

With the Reserve Bank keeping the cash rate at a hefty 4.35%, personal debt levels are likely to surge.

Household savings have dropped to a mere 0.9% of income, marking the lowest rate since 2006-07.

This means around 40% of Australians have less than $1,000 saved — not ideal for a rainy day!

Mortgage pressure is mounting, with a whopping 40% of homeowners admitting they’re struggling to meet their loan repayments.

Experts suggest that folks are turning to credit cards and buy-now-pay-later options just to get by, which can lead to a slippery slope if not managed properly.

On the bright side, a rate cut before Christmas is looking more likely, thanks to recent moves by the US Federal Reserve. 

Still, the road ahead remains uncertain!

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