Closing Bell
What's Affecting Markets Today
US Fed Decision
Investor attention is centered on the US Federal Reserve’s updated quarterly rate projections, known as the dot plot. Key areas of interest include potential changes to the forecast for another quarter-point hike this year and any adjustments to the 2024 rate reduction projections. Fawad Razaqzada of City Index and FOREX.com believes that any indication of fewer rate cuts for 2024 would deter bearish bets on the dollar. Lauren Goodwin of New York Life Investments mentions that while inflation risks are on the rise, the Fed is likely to maintain its projected quarter-point hike, possibly implementing it in November. She emphasizes that significant economic slowdown or recession would be required for the Fed to consider rate cuts next summer.
Australia’s Rate-Hike Prospects
Economists are split on the possibility of the Reserve Bank of Australia (RBA) raising its key rate again this year. While some predict another increase in borrowing costs, others expect the cash rate to remain at 4.1%. The RBA had previously considered another rate hike but decided to hold off. Between May 2022 and June 2023, the central bank had already increased rates by 4 percentage points. Bill Evans, chief economist at Westpac, highlighted the importance of the third-quarter CPI report set for release on October 25, suggesting that the threshold for an inflation-induced rate hike in November is high.
Iron Ore’s Rally and Future Outlook
Iron ore prices have surged since early August, driven by increased buying from Chinese steel mills replenishing their low inventories. Bank of America notes that while demand has risen, steel mills’ profit margins remain negative. A rebound in steel prices is essential for a positive iron ore outlook. Current iron ore futures in Singapore stand at $US121.20 per tonne for October, up from $US98.65 in mid-August. Despite this rally, many analysts predict a return to prices closer to $US100 a tonne in the coming months. Fitch subsidiary BMI forecasts a drop to $US50 a tonne by 2032, indicating a challenging future for miners.
ASX Stocks
ASX 200 - 7163.3 -33.3 (-0.46%)
Key Highlights:
The Australian sharemarket is experiencing its third consecutive day of losses, with the S&P/ASX 200 down by 0.4% at midday. Both the energy and materials sectors have seen declines of over 1%, with major companies like BHP and Woodside dropping around 1.5%. KMD Brands reported a 3.9% decrease, pointing to cost-of-living pressures on its Kathmandu brand. Flight Centre Travel saw a 1.7% drop, while Sezzle shares surged by nearly 20% after reports of robust income in August. Sims, a scrap metal company, is down by 0.4% after finalizing the sale of its 50% stake in LMS Energy for $272.1 million. Alligator Energy’s stock has decreased by 13% after raising $25.5 million.
Leader
QORIA Ltd – QOR (+11.91%)
Ainsworth Game Technology Ltd – AGI (+6.74%)
Clearview Wealth Ltd – CVW (+6.25%)
Impedimed Ltd – IPD (+5.71%)
Aussie Broadband Ltd – ABB (+5.16%)
Laggards
Brainchip Holdings Ltd – BRN (-10.00%)
Australian Strategic Materials Ltd – ASM (-9.78%)
Lotus Resources Ltd – LOT (-9.65%)
Latin Resources Ltd – LRS (-7.38%)
Sovereign Metals Ltd – SVM (-7.14%)
Calendar
Economic
