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- Local shares close 0.20% higher ahead of Fed meet
- The FOMC will hand down its rates decision tonight
- Coal stocks outperform on Wednesday
Aussie shares inched higher on Wednesday by 0.2% as investors await the Fed’s monetary policy decision later tonight.
A 75-basis point hike has been the consensus for some time, but analysts are waiting for the Fed’s comments to see whether there is any signal of the slowing in the pace of hiking.
Blerina Uruci, Chief US Economist at T. Rowe Price, said: “The Fed is between a rock and a hard place. Its key question is how to step down the pace of rate hikes without appearing to be soft on inflation.”
“My best guess is that the Fed will want to leave its options open for the December meeting and not loosen financial conditions prematurely.
“While market functioning is very much on its mind, the Fed wants to be prepared for the worst without prematurely signaling a pivot on economic concerns when inflation is still so high,” said Uruci.
MFS Investment Management’s Chief Economist and Portfolio Manager, Erik Weisman said:
“Parsing Fed-speak is never easy, but investors should really be looking for anything that indicates more clearly what the terminal rate will be and how quickly we will get there.
“The timing of the done part is important, because we can’t even begin to think about cuts until we have a better understanding of the timing of the peak policy rate,” said Weisman.
Meanwhile the Aussie dollar climbed to over US64c this afternoon ahead of the Fed, despite the RBA only rising by 25bp yesterday.
Housing finance approvals plunged by 8.2% in December (versus 3% estimates) according to data released by the RBA today.
Private credit also retreated, signalling a slowdown in the Australian economy.
Back to the ASX, Energy and Mining stocks gained while rates sensitive sectors Tech and Real Estate lagged.
Giant health stock CSL (ASX:CSL) fell 0.35% despite announcing a new collaboration and licensing deal with Nasdaq-listed Arcturus Therapeutics to access next-generation mRNA vaccine technology.
Looking ahead to tonight’s Wall St, apart from the key Fed announcement, the US will also announce its jobless claims numbers.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| JLG | Johns Lyng Group | 5.3 | 6% | 1,463,040 | $1,298,567,321 |
| GNE | Genesis Energy Ltd | 2.35 | 5% | 33,572 | $2,341,403,191 |
| CQE | Charter Hall Soc In | 3.38 | 5% | 344,029 | $1,173,177,976 |
| SQ2 | Block | 89.17 | 5% | 226,693 | $3,502,929,866 |
| BKL | Blackmores Limited | 68.66 | 5% | 52,018 | $1,269,002,167 |
| PME | Pro Medicus Limited | 40.53 | 5% | 173,397 | $4,036,165,213 |
| IPH | IPH Limited | 7.73 | 5% | 808,814 | $1,614,885,932 |
| LIC | Lifestyle Communit. | 12.75 | 5% | 122,121 | $1,273,359,696 |
| GMG | Goodman Group | 18.055 | 5% | 2,672,250 | $32,226,840,005 |
| PNI | Pinnacle Investment | 6.93 | 5% | 1,167,736 | $1,323,084,769 |
| CIP | Centuria I REIT | 2.97 | 4% | 1,698,914 | $1,809,552,310 |
| MTS | Metcash Limited | 4.14 | 4% | 5,627,032 | $3,842,855,576 |
| JHX | James Hardie Indust | 30.91 | 4% | 1,449,059 | $13,238,229,262 |
| NXT | Nextdc Limited | 10.505 | 4% | 796,028 | $4,616,776,419 |
| ARF | Arena REIT. | 4.215 | 4% | 593,708 | $1,407,512,209 |
| CEN | Contact Energy Ltd | 6.6 | 4% | 7,779 | $1,575,384,618 |
| CLW | Chtr H Lwr | 4.47 | 4% | 2,238,796 | $3,115,938,058 |
| SCP | SCA Property Group | 2.85 | 4% | 1,657,888 | $3,069,787,215 |
| VUK | Virgin Money Uk PLC | 2.28 | 4% | 4,766,497 | $1,804,898,053 |
| GOZ | Growthpoint Property | 3.51 | 4% | 406,400 | $2,615,580,020 |
Coal producers Coronado Global (ASX:CRN), Whitehaven Coal (ASX:WHC) and Stanmore Resources (ASX:SMR) were the standouts today, up 3-9%.
Vulcan Steel (ASX:VSL) was also among the winners, up 5%, buoyed by China’s announcement that it was preparing for a full reopening in March 2023.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| RBD | Restaurant Brands NZ | 8.74 | -19% | 140 | $1,344,896,878 |
| CEN | Contact Energy Ltd | 6.77 | -5% | 11,817 | $1,784,789,992 |
| CMW | Cromwell Prop | 0.69 | -5% | 2,472,720 | $1,898,678,357 |
| AMC | Amcor PLC | 17.32 | -5% | 2,292,471 | $12,041,418,792 |
| RWC | Reliance Worldwide | 3.13 | -4% | 2,797,986 | $2,575,708,934 |
| OCL | Objective Corp | 14.26 | -4% | 15,504 | $1,409,942,731 |
| XRO | Xero Ltd | 75.29 | -4% | 257,735 | $11,753,807,286 |
| SYR | Syrah Resources | 2.415 | -4% | 2,901,369 | $1,683,132,482 |
| PLS | Pilbara Min Ltd | 5.12 | -4% | 19,081,689 | $15,862,774,789 |
| AKE | Allkem Limited | 14.525 | -3% | 2,888,927 | $9,590,377,613 |
| LFG | Liberty Fin Group | 3.48 | -3% | 149,936 | $1,092,960,000 |
| CGC | Costa Group Holdings | 2.565 | -3% | 1,222,807 | $1,231,048,135 |
| DMP | Domino Pizza Enterpr | 61.37 | -3% | 334,993 | $5,489,091,602 |
| LTR | Liontown Resources | 1.8775 | -3% | 7,605,557 | $4,250,102,402 |
| GMG | Goodman Group | 17.14 | -3% | 3,419,424 | $33,190,279,403 |
| WTC | Wisetech Global Ltd | 57.53 | -3% | 195,345 | $19,370,151,145 |
| SGP | Stockland | 3.52 | -3% | 5,022,875 | $8,641,561,416 |
| MP1 | Megaport Limited | 6.27 | -3% | 675,866 | $1,018,583,341 |
| DDR | Dicker Data Limited | 10.18 | -2% | 214,036 | $1,879,451,719 |
| PME | Pro Medicus Limited | 55.69 | -2% | 73,000 | $5,964,125,969 |
| NAN | Nanosonics Limited | 4.165 | -2% | 256,733 | $1,289,659,043 |
Restaurant Brands NZ (ASZ:RBD) plunged 19% on no announcement.
