That's all for today, folks. Enjoy the evening and maybe another good match at the Australian Open.
Here's our evening wrap of today's session.
What to look out for overnight:
- The IMF will update its World Economic Outlook. Chief Christine Lagarde has been a bit more upbeat in her assessment of the global economy of late, so there's a chance of an upward revision to global growth estimates.
- Apple is set to reveal its first drop in quarterly earnings in a decade. Analysts on average estimate Apple's fiscal first-quarter earnings per share at $US13.41, down slightly from $US13.87 in the year-earlier quarter. Revenue is seen up 18 per cent at $US54.7 billion. The December quarter is typically the strongest one of the year for consumer electronics sales and Apple had a new product, the iPad mini, in its holiday season line-up.
Arab Bank's David Scutt has just tweeted that this is the highest close for the ASX200 441 in trading sessions. We haven't checked the numbers but we can confirm that it's the highest since May 2, 2011.
Among the sectors, materials gained 0.6 per cent, buoyed by a 1.3 per cent rise in BHP on the back of strong production numbers. Financials rose 0.3 per cenr, energy added 0.4 per cent and gold stocks jumped 1.8 per cent.
Among the losers were the health sector, falling 1.3 per cent, and industrials, down 0.7 per cent.
The sharemarket has closed slightly higher, hanging onto its early gains. The benchmark S&P/ASX200 index added 8.7 points, or 0.2 per cent, to 4787.8, while the broader All Ords rose 9.2 points, or 0.2 per cent, to 4812.2.Back to top
Japan's government has raised its view of the economy for the first time in eight months as private consumption is holding firm and business sentiment shows signs of improvement due to a falling yen and rising share prices.
Improvement in exports and recently compiled economic stimulus steps will likely put the economy back on a recovery path, but a slowdown in overseas economies remains a risk factor, the government said in its monthly economic report.
The government also said it expects the Bank of Japan to take bold steps to meet a 2 per cent inflation goal that the government agreed with the central bank on Tuesday as part of a bold push to escape nagging deflation and to revive the economy.
"The economy is weak, but signs of bottoming out can be seen in some areas," the report said.
The Australian dollar has slipped after surprisingly benign inflation data suggested there is still plenty of scope for further interest rate cuts, though investors still doubt a move will come next month.
The dollar eased a third of a cent to $US1.0527 after key measures of underlying inflation rose by less than expected to be in the lower half of the Reserve Bank's target of 2 to 3 per cent. It's currently trading at $US1.0538.
The data prompted a gentle move in Australian debt futures with swap markets implying a 36 per cent chance of a quarter point easing to 2.75 per cent at the RBA's next policy meeting on February 5, from 33 per cent. Yet, they still see rates bottoming around 2.5 per cent sometime this year.
"While the weaker inflation profile in the coming quarters provides the RBA with the option to cut rates, we believe a cut is unlikely at the February meeting," says Martin Whetton, a rate strategist at Nomura in Sydney.
"We have seen an improvement in the international backdrop while the domestic economy has not deteriorated meaningfully."
Big surprise at the Australian Open: 19-year old Sloane Stephens has just defeated Serena Williams in three sets.
The ASX200 has made another play for the 4800 level today courtesy of positive performances by key stocks in the materials and financial sectors, CMC Markets tradr Tim Waterer says:
- Again it was a solid if not spectacular day on the market which is a theme that seems to be re-occurring so far in 2013.
- BHP results were warmly received by traders however this was offset by Rio weakness and this seemed to constrain the local bourse from having a solid breakout above 4800 today.
- But overall it was a case of ‘steady as she goes’ with the ASX200 again edging higher.
Shadow treasurer Joe Hockey says the government must reveal how its broken promise to return a budget surplus this financial year will impact on the cost of living of Australian households.
Mr Hockey said the latest consumer price index for the December quarter released on Wednesday showed the annual rate of inflation edged up to 2.2 per cent from two per cent previously, while domestic cost pressures remained of concern.
He said non-tradeables - domestically produced goods and services, such as meat, newspapers, takeaway food and new dwelling purchases - rose 0.7 per cent in the quarter and 3.9 per cent over the year.
He also noted that the cost of electricity over 2012 rose by 17.7 per cent, while other gas and household fuels increased by 17.3 per cent.Back to top
With less than an hour before the close of trade, here's how markets around the region are performing:
- Japan(Nikkei): -0.9%
- Shanghai: -0.4%
- Taiwan: -0.3%
- South Korea: -0.2%
- Singapore: +0.3%
- New Zealand: +0.1%
Here's an interesting piece from the Guardian, a US company has unveiled plans to launch of fleet of spacecraft to hunt for asteroids in the hope of mining them for resources.
Selecting shares to recommend is fraught with challenges, writes Motley Fool's Scott Phillips, but that doesn't mean there isn't value to be found.
After today's inflation numbers, CBA economist Michael Workman had some interesting comments on monetary policy:
- The focus will turn to the next round of Capex and jobs releases. Another downgrade to business investment expectations (due late February) in the mining and non-mining sectors could be sufficient to persuade the RBA to cut the cash rate in March. But it may also require another fall in the January jobs data (due early February) and a rise in the unemployment rate.
- If international economic trends are taken into account, then any decision to cut the cash rate may be delayed for a few months. On balance, the growth data from Australia’s major export markets has been positive in recent months. Financial market volatility, and risks, in the EU and the US, have fallen appreciably compared to most of 2012. In addition, asset prices, including equities, have risen, which improves household balance sheets and, eventually, consumer confidence.
- The policy game plan during 2012 involved the RBA accommodating fiscal consolidation and offsetting the high AUD by lowering interest rates. This policy approach requires a benign inflation backdrop which looks to be still in place after today’s update.
- The risks are clearly skewed towards another RBA cash rate cut, to 2.75%, in coming months. Timing-wise, March appears more likely than February. Markets see a 28% chance of a February RBA rate cut, and about 61% by March.
With the World Economic Forum taking place in Davos, Switzerland, under the theme of 'Resilient Dynamism', Quartz.com has put together a list of previous themes from the last decade....interesting.
2003: Building Trust
2004: Partnering for Security and Prosperity
2005: Taking Responsibility for Tough Choices
2006: The Creative Imperative
2007: The Shifting Power Equation
2008: The Power of Collaborative Innovation
2009: Shaping the Post-Crisis World
2010: Rethink, Redesign, Rebuild
2011: Shared Norms for the New Reality
2012: The Great Transformation: Shaping New Models
2013: Resilient Dynamism
While today's consumer price index is a pleasant surprise on the downside, it is a mild one, Michael Pascoe writes:
Core inflation has been running low enough to allow the Reserve Bank to trim rates next month if it so wishes, but not so low as to push it in that direction.
But the numbers breakdown also shows why inflation isn't dead as an issue for the RBA, why it can't afford to wildly slash interest rates as the usual suspects keep suggesting.
Something to keep in mind when looking at the inflation figures: wages have been growing faster.
In November, Bureau of Statistics figures for the wage price index showed that wages were up 3.7 per cent in the year to September.
The total hourly rates of pay excluding bonuses rose 0.7 per cent in the September quarter, a drop from the previous three months when it advanced by 1 per cent.
Treasurer Wayne Swan said today's CPI result reflected subdued price pressures across the board with a number of seasonal factors putting downward pressure on inflation.
‘‘Importantly, today’s result provides further evidence that there has been no significant broad-based increase in consumer prices as a result of the carbon price,’’ Mr Swan said.
‘‘That is a result which is entirely consistent with Treasury modelling. In fact, much of the impact of the carbon price on inflation occurred in the previous quarter.’’
The data also showed the ‘‘scare campaign’’ from Opposition Leader Tony Abbott and the Liberals about the carbon tax had been exposed as ‘‘fraudulent’’, the treasurer said.
IKEA, the world's biggest furniture retailer, posted a record net profit today for the 2011-12 year, helped by sales and market share growth as budget design enticed austerity-hit shoppers.
Net profit at the privately-held Swedish firm, known the world over for low-price, self-assembly, flat-packed furniture, rose 8 per cent to 3.2 billion euros in the 12 months through last August.
IKEA says it is relatively resilient to economic downturns as these make cost conscious consumers turn to cheaper goods.
HSBC have put together a nice graphic tracking inflation over the last decade:
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