Utilities (down 1.1 per cent) was the weakest sector, with AGL shares down 1.4 per cent and Meridian 1.7 per cent. Pro Medicus (down 5.1 per cent) was the most important large-cap decliner.
The lowdown
In a report concerning the financial system, Citi Research mused that stronger-than-expected inflation knowledge has made it more durable for the Reserve Bank to take care of the present money price.
“We pencil a 25 [basis-point] increase in the cash rate in August to 4.6 per cent. Not raising rates risks policy credibility and would signal a dilution in importance of inflation, which would be unheralded,” mentioned Citi Research head of economics Josh Williamson in a analysis be aware to shoppers.
Morgan Stanley can be forecasting a price hike in August, however its fairness strategists acknowledged that this was not a consensus view after conversations with traders.
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“While the RBA has shown a clear preference to not accelerate the downward path of inflation with tighter policy, the stalling of progress over 2024 is much more consequential and is likely to raise concerns around broader inflation expectations,” wrote Morgan Stanley researchers.
Overseas, Wall Street’s record-breaking rally saved going after weak experiences on the US financial system saved the door open for attainable cuts to rates of interest.
The S&P 500 Index rose 0.5 per cent to set a report excessive for a second straight day and for the thirty third time this 12 months. The Dow Jones Industrial Average slipped 0.1 per cent, whereas the Nasdaq Composite Index added 0.9 per cent to eclipse the report set a day earlier. Trading ended early for the day forward of the July 4 public vacation.
Tesla once more helped increase the market and rose 6.5 per cent a day after reporting a milder drop in gross sales for the spring than analysts feared. It was one of many strongest forces pushing the S&P 500 up, together with Nvidia. The darling of Wall Street’s rush into artificial-intelligence expertise climbed 4.6 per cent to carry the chip firm’s achieve for the 12 months thus far to 159 per cent.
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The motion was stronger within the bond market, the place Treasury yields slid following a flurry of experiences that got here in weaker than anticipated on each the roles market and US providers corporations. The knowledge might preserve the Federal Reserve on target to ship the cuts to rates of interest later this 12 months that Wall Street needs.
One report mentioned exercise for companies in the actual property, retail commerce and different US providers industries contracted in June for simply the third time in 49 months. The studying was weaker than economists’ forecasts, which referred to as for only a slowing of development. Perhaps extra importantly for Wall Street, the report from the Institute Supply Management additionally mentioned costs had been rising at a slower tempo.
That adopted experiences from earlier within the morning exhibiting a slowing jobs market. One mentioned barely extra US staff utilized for unemployment advantages final week than economists anticipated, although the quantity stays low in contrast with historical past.