IMF upbeat on inflation, ASX recoups 2022 losses in January, Adani appoints independent auditor into fraud claims – as it happened
The International Monetary Fund says there are indications that surging prices are peaking and that the world may be winning the war against inflation.
Meanwhile, the ASX 200 lost ground, but recouped all its 2022 losses in January.
Disclaimer: this blog is not intended as investment advice.
By Sue Lannin
By Sue Lannin
Collapsed solar power firm Sun Cable has been put up for sale after going into voluntary administration earlier this month amid a dispute between billionaire backers Andrew Forrest and Mike Cannon-Brookes.
Interested buyers have been invited to submit a bid to sales advisor Moelis Australia for the sale or recapitalisation of the renewable energy company.
Administrator FTI Consulting is asking for bids for Sun Cable to be submitted by the end of April, with the aim of completing a sale by the end of May this year.
Sun Cable owns the $30 billion Australia-Asia Power Link project which aims to export solar power from the Northern Territory to Singapore.
Read about Sun Cable's near collapse in this story from my colleagues David Chau and Michael Janda.
By Sue Lannin
The Australian share market was boosted by a fall in retail sales in December, but ended lower for a second session, as investors await this week's move on interest rates by the Federal Reserve.
7 out of 11 sectors finished in the red with the losses led by technology firms, industrials and real estate.
But for the month, the ASX 200 surged 6.2 per cent, its best month since March 2022.
That means it has recovered all of last year's 5.4 per cent loss.
Consumer staples like Woolworths (+3.8 per cent) rose the most as investors hope the RBA will pull back on the rate rises after retail sales fell nearly 4 per cent in December.
The Commonwealth Bank (+0.3 per cent) reached a record high closing above $110 for the first time.
Data centre operator Megaport slumped by nearly one quarter as investors were disappointed by its trading update.
There was also cautious trade in Asia.
Factories in China returned to growth in December after Beijing ended the country's COVID-19 restrictions.
The official Purchasing Managers Index, which measures manufacturing activity, rose to 50.1 from 47 in December.
By Sue Lannin
The ASX 200 has ended lower, down 0.07 per cent at 7,477, after a choppy day of trade.
It was boosted after retail sales fell in December for the first time in 2022.
That's food for thought for the Reserve Bank which is closely watching the economic data to decide the next move on interest rates.
The Australian dollar fell back further after the retail numbers came with investors thinking the RBA could pause rate hikes if the economy slows down.
Traders are betting on a 86 per cent chance that the central bank will raise rates by 0.25 per cent at its first meeting of the year next Tuesday.
By Sue Lannin
Australian shares were boosted by the fall in retail sales in December on hopes the Reserve Bank will pull back on its interest rate rises.
Shares climbed to a nine month high, but they've run out of steam in late trade.
The ASX 200 index was down 0.2 per cent at 3pm AEDT, in a day of choppy trade.
Consumer stocks are the best performers, healthcare and energy stocks are higher, but miners have lost their gains as have banks, thanks to the prospect of lower income if rates don't keep rising as much.
Woolworths (+2.8 per cent) and Coles (+2.3 per cent) are kicking it out of the park on the prospect of a pause in rate increases.
The worst performers are data centres operator Megaport (-27.3 per cent) after investors didn't like its trading update, with numbers less by predicted by analysts.
That's even though revenue rose by one quarter to $US24.4 million.
By Sue Lannin
The International Monetary says there may be signs the world is winning the war against inflation because of steep interest rate hikes by global central banks.
In a new forecast, the world's lender of last resort, says there are indications that surging prices are peaking, but economic growth is tipped to weaken this year.
The IMF forecasts in its updated World Economic Outlook (WEO) that the global economy could slow down this year from an estimated 3.4 per cent in 2022, to 2.9 per cent in 2023.
However, the forecast is less gloomy than back in October, when the IMF predicted the world's economy would expand by just 2.7 per cent this year.
"The rise in central bank rates to fight inflation and Russia's war in Ukraine continue to weigh on economic activity," the IMF said.
"The rapid spread of COVID-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster than expected economic recovery."
The IMF's outlook on inflation is also more upbeat.
It expect global inflation to fall from an estimated 8.8 per cent last year to 6.6 per cent in 2023, and further slowdown to 4.3 per cent in 2024.
However, it notes, that inflation is still well above pre-COVID levels of 3.5 per cent.
And the world may still not escape a global recession, especially if the pandemic lingers in China and the war in Ukraine gets worse.
"The balance risks remains tilted to the downside, but adverse risks have moderated since the October 2022 WEO," the IMF said.
"On the upside, a stronger boost from pent-up demand in numerous economies or a faster fall in inflation are plausible."
"On the downside, the severe health outcomes in China could hold back the recovery, Russia's war in Ukraine could escalate, and tighter global financing costs could worsen debt distress."
The RBA meets next week and traders are betting on a 86 per cent chance of another rate rise, but some economists think the central bank could pause after that.
Investors are tipping the Federal Reserve will continue to cool the pace of its rate increases this week.
By Sue Lannin
Australian shares have climbed after a slow start with January set to be the best month in more than two years according to Reuters.
The All Ordinaries index is up one fifth of a per cent, and the local currency fell a bit after the retail sales numbers came out, which suggests traders think the RBA may not move next week at its first meeting of the year.
Consumer companies, healthcare, miners, banks, and oil firms are moving the market, with 6 out of 11 sectors higher.
Digital fintech and personal loan lender Moneyme (+32 per cent) is doing the best in the All Ordinaries, and data centre operator Megaport (-20.6 per cent) is doing the worst.
MoneyMe swung from loss to profit for the first half of the financial year, and revenue more than doubled to a record $117 million.
Baby formula maker Bubs Australia (-7 per cent) is taking a hit after a 28 per cent drop in quarterly revenue to $14.3 million because of COVID-19 lock downs and supply disruptions in China.
By Sue Lannin
Those steep interest rate rises by the Reserve Bank are starting to hit spending.
The Bureau of Statistics says retail trade slipped by 3.9 per cent in December to $34.4 billion dollars.
"This is the first monthly fall in retail turnover for 2022, following eleven consecutive monthly rises," says ABS head of retail stats Ben Dorber.
"The large fall in December suggests that retail spending is slowing due to high cost of living pressures."
Over the year, retail sales remained elevated, rising by 7.5 per cent.
The Reserve Bank will be looking at this data closely when it decides whether or not to raise interest rates again next week, at its first meeting of the year.
Consumer spending has been propping up the economy, although the value of sales has been driven up by the rising cost of living.
Retail sales rose 1.7 per cent in November to a record high, with people bringing forward their Christmas spending at the Black Friday and Cyber Monday online sales.
Here's my ABC business desk colleague David Chau, who drills down further into the numbers.
By Sue Lannin
Banks are not our favourite companies, and many have been involved in dodgy, even criminal behaviour – just look at the banking royal commission.
And alot of people remain angry that no big name bosses in the US were jailed or sacked because of the global financial crisis.
Anyway for your reading pleasure, I present the most fined banks over the last decade courtesy of foreign exchange and crypto currency trading platform Forex Suggest.
And the worst bad bank of the Wall Street titans?
Bank of America had to pay more than $US60 billion in penalties from 124 fines since 2012.
It was fined heavily in the aftermath of the GFC, and received four out of the ten biggest fines since 2012.
JP Morgan was the second most fined financial institution since 2012 at $US34.21 billion for toxic securities abuses (complex investments which almost brought down the global financial system), mortgage loan servicing and foreclosure abuses, mortgage abuses, and anti money laundering criminal charges (that's the rap sheet – I didn't make it up).
Wells Fargo was the third most heavily fined bank with a combined value of $US20.32 billion over the past ten years for mortgage loan servicing and foreclosure abuses, and it had to pay out $US5.3 billion to homeowners affected by the sub prime crisis (when banks lent money to people who couldn't afford it and sold their risky home loans as mortgage bonds, which led to the GFC.
Essentially the investors buying the mortgage bonds did not know what they buying, what the loans were worth, and whether they would be paid back.
Forex Suggest says that since 2012, toxic securities abuses were the most fined offences with a combined value of $US94.6 billion.
"These offences often relate to misleading investors with regard to the packaging, securitisation, issuance, marketing, many other breached codes of conduct that were at the centre of the 2008 financial crisis," Forex Suggest said.
Last year, companies in New York state, the home of Wall Street, accounted for nearly one third of the fines.
There were 154 fines handed out for financial violations in 2022 in the US.
By Sue Lannin
Here are the top movers on the ASX 200 after the first hour of trade.
Consumer firms, banks, healthcare, and miners are driving the market, with most sectors now higher.
By Sue Lannin
More cautious trade on the Australian share market ahead of today's retail trade figures and this week's meetings of major central banks.
The ASX 200 started off flat but has now climbed by just over one quarter of a percentage point.
Driving the gains are miners, healthcare, and consumers stocks.
But 7 out of the 11 sectors are lower led down by industrials, technology, real estate, and energy firms, after an overnight fall in oil prices.
By Sue Lannin
The local market is little changed in early trade.
At 10:15 am AEDT, the All Ordinaries is slightly lower at 7695, while the ASX 200 is at 7,483.
More sectors are lower than higher with education firms, real estate trusts, utilities, banks, tech and energy stocks in the red.
Healthcare firms and miners are going up.
The Australian dollar is weaker at around 70.50 US cents.
Retailer Coles (+1.7 per cent) is doing the best after the competition watchdog and the Foreign Investment Review Board approved service station owner Viva Energy's purchase of Coles Express convenience stores.
But Viva Energy shares down 0.7 per cent.
Data centres operator Megaport (-12 per cent) is doing the worst after a quarterly trading update.
The latest retail sales numbers are out later this morning.
By Daniel Ziffer
Hi team, jumping in to tell you about an interesting report.
What's called 'occupational gender segregation' is the unequal distribution of male and female workers across and within job types.
Despite a massive increase in the participation of women in the workforce – the number and proportion – they haven't flowed in to some of the largest and best-paid industries: like mining and construction.
And despite massive growth in the services sector, jobs like health care and teaching, men haven't gone there.
And it's getting worse.
CEDA has done a great look at what is a huge factor in employment in Australia.
“There is still a low proportion of women in traditionally male-dominated industries such as: construction; mining; science, technology, engineering, and mathematics (STEM); and manufacturing,” CEDA chief executive Melinda Cilento says.
“Conversely, there is a low share of men in female-dominated industries, such as health care and education, and some of these occupations have become even more segregated over time".
Why is this a problem? Lots of reasons.
“This limits job mobility, stifles labour-market flexibility and keeps a lid on productivity,” she adds.
How to fix it
CEDA has seven recommendations to fix the problem, four for government and three for business. These are all 'banner' recommendations, with plenty of work to do in each of them, including
Business has work to do too.
By Sue Lannin
This has to be the week's most interesting story.
Indian conglomerate Adani has lost nearly $US65 billion ($92 billion) in just a few days after US hedge fund Hindenburg Research released a damning report last week accusing the Indian conglomerate of share price manipulation, fraud, and the use of offshore tax havens in what it called "the largest con in corporate history."
Critics may say that Adani is vying with FTX to be the biggest corporate swindler.
Adani hit back threatening to sue Hindenburg, accusing it of being anti-India, and engaging in securities fraud by releasing the report to drive down the share price, as hedge funds are apt to do.
The timing was key – Hindenburg released the report just as Adani started India's largest secondary share sale to raise $US2.5 billion.
But now Adani seems to have conceded defeat.
Indian newspaper The Mint reports that Adani plans to hire one of the globe's big accounting firms to evaluate its corporate governance and audit practices.
"The audit will include eight of the group's listed firms."
"The independent audit report will be presented to the board, basis (sic) the findings, the matter be taken to court if the board of Adani Enterprises decides so, " Mint quoted one of the sources as saying.
Some may say it's hiring a big accounting firm to get the report it wants.
These developments are important for Australia because Adani operates the Carmichael coal mine in Queensland's Galilee Basin, and the Abbot Point coal terminal.
There have been alot of allegations of financial mismanagement at Adani over the years, and there was lots of opposition in Queensland to the building of the mine.
Reuters reported last week that India's market regulator has increased scrutiny of the Adani Group.
Here's the 2017 Four Corners' story from my business colleague, Stephen Long, who traveled to India and was questioned by Indian police.
By Sue Lannin
Wall Street lost ground pulled down by tech giants and large corporates.
Investors are awaiting this week's meetings of the US Federal Reserve, the European Central Bank, and the Bank of England.
The big three central banks are expected to raise official interest rates to curb inflation.
The Federal Reserve is expected to lift the federal funds rate by 0.25 per cent to a range of 4.5 per cent to 4.75 per cent.
That would be the smallest increase since the Fed started raising rates early last year to combat surging inflation.
The Dow Jones index fell 0.8 per cent with all sectors in the red, led lower by energy stocks, miners and technology firms.
Healthcare products firm Johnson & Johnson (-3.7 per cent) lost nearly $US17 billion, after an appeals court denied the healthcare products firm bankrupcty protection to protect itself from liabilities related to its baby powder products.
The firm says it will appeal the ruling.
Johnson & Johnson faces about 40,000 cancer legal claims that allege tainted talc in the company's baby powder caused cancer.
The consumer healthcare company denies the product contains deadly asbestos.
Google owner Alphabet lost 2.4 per cent to $US96.94, while Apple (-2 per cent) and Microsoft (-2.2 per cent) were also in the red.
The Nasdaq Composite declined by nearly 2 per cent, while the benchmark S&P 500 index fell more than 1 per cent.
with Reuters
By Sue Lannin
Here's one for all you guitar aficionados out there.
Guitar giants Gibson and Heritage Guitars have settled their latest legal battle.
Heritage, which was set up by former Gibson employees, accused Gibson of threatening to take legal action over guitar shapes.
That went against a 1991 settlement after Gibson accused Heritage of copy infringement.
In the current case, Heritage accused Gibson of trying to monopolise the guitar market.
Both companies have now agreed to abandon their claims and pay their own legal fees.
Meng Ru Kwok, chief executive of Heritage Guitars and Caldecott Music Group, welcomed the settlement.
"We are delighted that matters have been resolved and we can now focus on what really matters – carrying on the tradition of guitar craftsmanship and excellence."
In a statement, Gibson said it was pleased the matter has been dismissed.
"As this matter is now resolved, Gibson can move forward and focus on innovation with confidence," the company said.
"Gibson's unique designs are registered and trademarked shapes that are exclusive property of Gibson."
"Gibson guitar shapes are iconic and firmly protected for the past, present and future."
Check out these tit for tat tweets above and below!
Get ready for the next battle of the guitar giants.
with guitar.com
By Sue Lannin
Good morning, welcome to the ABC's Markets Blog. I'm Sue Lannin.
Wall Street in in the red as investors await more profit results and the Federal Reserve's expected interest rate rise this week.
The Dow Jones index is down 0.6 per cent and oil prices slumped with Brent crude losing 2 per cent of its value.
The Australian dollar has lost ground overnight as well and has fallen 0.7 per cent to 70.55 US cent.
Join me for all today's markets news.
We acknowledge Aboriginal and Torres Strait Islander peoples as the First Australians and Traditional Custodians of the lands where we live, learn, and work.
This service may include material from Agence France-Presse (AFP), APTN, Reuters, AAP, CNN and the BBC World Service which is copyright and cannot be reproduced.
AEST = Australian Eastern Standard Time which is 10 hours ahead of GMT (Greenwich Mean Time)