ASX finishes lower as markets nervously await US Federal Reserve interest rates speech, Kmart and Bunnings boost profits for Wesfarmers — as it happened
A highly anticipated speech to be delivered by the US Federal Reserve chairman overnight left the Australian share market on edge, finishing lower for the week at the close of trade.
A lacklustre production outlook from lithium miner Pilbara Minerals also dragged the market lower despite a surge in profits, while Wesfarmers reported a 4.8 per cent rise in profits.
Look back on the day's financial news and insights from our specialist business reporters on our blog.
Disclaimer: this blog is not intended as investment advice.
By Kate Ainsworth
Now the (trading) day is done, here's how the markets looked at 4:30pm AEST:
Updates on the major ASX indices:
By Kate Ainsworth
The ASX finished down 0.9% to 7,115 points at the close of trade — its lowest close in more than six weeks.
Investors were overly cautious during the day ahead of Fed chairman Jerome Powell's speech in Jackson Hole, which is happening around midnight AEST.
It was a day spent in the red for most of the sectors, excluding consumer non-cyclicals (+0.7%) and academic and educational services (+0.2%).
Consumer cyclicals was neutral, while the rest were firmly in negative territory, with industrials down the most (-1.6%) followed by technology (-1.6%) and energy (-1.4%).
As for the best five performers for the day:
And the those with the biggest falls:
The end of trade also means the end of the blog for the day, and another week.
We'll be back next week with all the washup of the Jackson Hole Economic Symposium, plus the final week of reporting season and Qantas CEO Alan Joyce facing a Senate Committee on Monday afternoon.
Until then you can catch up on today's developments below, or download the ABC News app and subscribe to our range of news alerts for the latest news.
See you next week!
By Stephanie Chalmers
Cost-conscious consumers have turned to discount chains like Kmart and Target, and that's delivered a boost to retail group Wesfarmers.
The conglomerate's managing director Rob Scott spoke with Rachel Pupazzoni on Close of Business from Perth.
"I think if we were to see further increases in interest rates, it is likely that we will see a decrease in consumer spending," Mr Scott said — but expects that won't be all bad news for the group.
"As we demonstrated with the Kmart result this year, when customers are more value conscious, and when household budgets are under pressure, that often attracts new customers to businesses such as Kmart.
"We often find that when customers [are] more value-conscious that can be beneficial for some of our retail businesses."
Wesfarmers' results did, however, show a pull-back in spending in the second half of the last financial year and beyond, but Mr Scott says it's in comparison to a big result in the previous period.
"The performance in the first seven weeks of this financial year has been pretty solid, albeit down on the very high levels we experienced more recently through COVID," he said.
In recent weeks, corporate Australia has faced scrutiny over some of the huge profits businesses have delivered, while their customers are struggling to cope with rising prices.
Mr Scott pushed back on any suggestion Wesfarmers is price gouging.
"Just in the last couple of months, Kmart has dropped over 1,000 prices to help our customers. So we have not increased our profits through increasing our profit margins."
Earnings margins at Bunnings were slightly down on the previous year, from 12.1% to 11.8%, while Kmart Group margins rose to 7.2% versus 5.5% a year ago.
You can watch that full interview tonight 9:30pm AEST on ABC News Channel or catch up on Close of Business anytime on iView.
By Kate Ainsworth
If you missed it earlier today, Elon Musk and his space technology company SpaceX have been sued by the US Justice Department over allegations it discriminated against asylum seekers or refugees by refusing to hire them.
The Justice Department alleged the discrimination took place from September 2018 to May 2022 in violation of the Immigration and Nationality Act.
SpaceX allegedly claimed in job postings and public statements that the company could only hire US citizens and "green card holders", the Justice Department said.
But CEO Musk has hit back at the lawsuit on X (formerly Twitter) saying it is the "weaponisation of the DOJ for political purposes".
You can read more below:
By Kate Ainsworth
Did you know you can get notifications about the latest business and money news direct to your devices through the ABC News app? Here's how:
If you don't have the app:
If you already have the app:
Enjoy!
By Kate Ainsworth
You know that saying "a picture paints a thousand words"?
Reuters photographers at the Jackson Hole Economic Symposium know *exactly* what they're doing when capturing the event.
Financial leaders are gathering at the remote Jackson Lake Lodge within the Grand Teton National Park — which is not at all the worst place in the world to spend a few days mulling the economy.
But in the lobby, there is an enormous grizzly bear taxidermy on display in a glass case, and the bankers and policymakers have been snapped making their way past it as they arrive, or chatting to reporters in front of it.
(If you're green to business and markets, "bear" is a term used to describe the stock market when share prices fall. You'll also often sometimes hear the markets being described as having a "bearish sentiment" or "bearish mood", which describes having a negative attitude.)
So, for a rare, lighthearted moment on the blog, I present to you: the Jackson Lake Lodge bear (and some global financial leaders).
(And full disclosure, only two of these photos are from this year's conference so far — but I'm sure more will be snapped before it wraps up.)
By Kate Ainsworth
The local market remains low as we move past the halfway point of the trading day, down 0.9% as of 2pm AEST.
Much like investors overnight, those here on home soil are also nervously waiting to hear about the US interest rate outlook when Fed chairman Jerome Powell speaks later tonight our time in Wyoming.
Investors and analysts alike will be sifting through Powell's speech, looking for Easter eggs and clues about what the Fed is thinking when it comes to interest rates, and how long it plans to keep them high.
As for the sectors, industrials, tech stocks and miners are pulling the ASX lower, while consumer non-cyclicals and educational services are the only two in positive territory.
The top movers so far:
And the bottom five performers right now:
By Kate Ainsworth
Here's how things are faring as of 1:20pm AEST:
Live updates on the major ASX indices:
By Kate Ainsworth
If you didn't know, August 25 is Equal Pay Day — and the date itself is no accident.
August 25 represents the 56 days from the beginning of the new financial year, which is the number of days women must work to earn the same as men did last year, on average.
"The 56 extra days that women have to work to earn the same, on average, as men, shows us that these barriers are still significant in Australian workplaces," Workplace Gender Equality Agency CEO Mary Wooldridge said.
"It means that women are missing out on 13 cents, on average, for every $1 that a man makes.
"Currently at 13%, the gender pay gap in Australia is a persistent and pervasive issue that undermines women’s earnings."
So what can be done? The WGEA, which is an agency of the federal government, says today is a reminder that employers need to "eliminate the barriers of bias, discrimination and entrenched gender stereotypes that devalue women and their work and drive the gender pay gap".
"Today’s Equal Pay Day is a call to action for all employers to build on this moment by taking the time to find out what steps they need to take to support greater gender equality in their own workplace," Ms Wooldridge said.
From next year, the WGEA will publish the gender pay gap for employers that have 100 or more workers in Australia, which it says will help tackle gender inequality through "increased transparency and action".
By Kate Ainsworth
Lithium miner Pilbara Minerals posted a net profit of $3.4 billion in the last financial year — an enormous 326% increase compared to a year earlier thanks to soaring lithium prices — but it's value has slumped significantly on the market today.
That's because its production outlook for the coming year is lower than what was expected, with the miner expecting to produce between 660-690,000 tonnes of spodumene concentrate in the next financial year.
Forecasts expected that range to be upwards of 700,000 tonnes — and it's that shortfall that's seen it's share price slide into the red.
But the miner says the long-term outlook remains "very positive" for lithium.
As of 12:30pm AEST, Pilbara shares were down 7.1% to $4.75.
By Kate Ainsworth
Earlier in the blog we covered the financial regulator taking subsidiaries of IAG to court for misleading customers over home insurance discounts.
IAG has now released a statement about the proceedings, which it says it plans to defend.
Here's their statement in full:
"IAG acknowledges the civil penalty proceedings commenced by the Australian Securities and Investments Commission (ASIC) in the Federal Court of Australia against IAG’s subsidiaries Insurance Australia Limited (IAL) and Insurance Manufacturers of Australia Pty Limited (IMA).
"The proceedings allege contraventions of the ASIC Act and the Corporations Act concerning the pricing of, and certain disclosures about how premiums are priced, for renewing customers of SGIO, SGIC and RACV home insurance products.
"IAL and IMA maintain they have delivered on loyalty promises made to customers, do not agree that they have misled customers about the extent of the discounts they would receive, and intend to defend the proceedings."
By Kate Ainsworth
If you missed this yesterday, staff at the Reserve Bank of Australia rejected a 10.5% pay offer from management, saying it doesn't help with the rising cost-of-living.
The RBA had offered the pay increase over three years to junior and mid-level staff.
Under the proposal, staff would get a 4 per cent pay rise at the start of the new agreement, 3.5 per cent from September 2024, and 3 per cent from September 2025.
But after the ballot closed this week, 57 per cent of staff voted to reject the offer.
Jason Hall, the national assistant secretary for the Finance Sector Union, said RBA staff had sent a clear message to management by rejecting their pay offer.
"We hope the RBA now understands that it must deal with the expectations of its workforce and substantially increase this pay offer," he said.
You can read the full story by my colleague, business reporter Gareth Hutchens below:
By Kate Ainsworth
Wall Street's losses overnight were led by the tech-heavy Nasdaq, which plummeted 1.9% after a strong rally earlier in the session.
Stocks in Nvidia barely ended higher on Thursday, after hitting a new record early in the session when it beat expectations by positing a quarterly revenue of $US13.51 billion after the bell.
The chip maker also predicted revenue would hit an eye-watering $US16 billion in the third quarter.
During trade, Nvidia rose to $US502.66, and lifted its stock to 223% higher in the year to date.
But while all eyes were on Nvidia's results, other chip makers fell as a result.
The Philadelphia Semiconductor Index lost more than 3%, Marvell Technology and Nvidia rival Advanced Micro Devices Inc each tumbled nearly 7%, while Intel dropped 4.1%.
Despite being buoyed by Nvidia, the Nasdaq finished lower, with some investors taking profit after the rally and markets being generally nervous about Jerome Powell's impending speech.
By Kate Ainsworth
The Australian sharemarket has opened 1.2% lower this morning, down to 7,094 points as of 10:20am AEST.
(For live figures, head to the top of the blog.)
All sectors are in the red, with technology down 2%, while industrials fell by 1.9% and basic materials down 1.7%.
Real estate is down by 1.7%, while energy is down 1.6%.
As for the top movers, they are few and far between right now:
At the other end though, the bottom five are solidly in negative territory:
By Kate Ainsworth
Here's how things are shaping up as of 10:20am AEST:
Live updates on the major ASX indices:
By Kate Ainsworth
Let's head back to the US briefly, where shares in Disney fell by 3.9% at the close of trade overnight, reaching their lowest level in nearly nine years.
Disney stockholders have been scrutinising CEO Bob Iger's plans to turn around the entertainment giant, which announced price hikes to its streaming services, more ads, and significant cost cuts to try to boost its business.
Investor sentiment led traders towards bearish bets with put options guarding against the stock slipping below $US80 between mid-September and mid-October. The put option gives traders the right to sell shares at a fixed price in the future.
Disney was also dragged lower thanks to the weakness in the broader market, with investors increasingly cautious ahead of the Fed chair's speech.
Iger has been up front about the entertainment company facing a "challenging environment" in the near term.
Disney's stock closed at $US82.47 — the lowest price since October 16, 2014.
By Kate Ainsworth
The Australian Securities and Investments Commission (ASIC) has launched civil proceedings against Insurance Australia Group (IAG) for allegedly misleading home insurance customers on pricing discounts.
The Federal Court proceedings have been launched against IAG's subsidiaries of Insurance Australia Limited (IAL) and Insurance Manufacturers of Australia (IMA).
ASIC claims the insurers were misleading in encouraging loyalty discounts to entice customers to renew their home insurance policies, "as loyal customers may have had their premiums increased before the discounts were applied".
IAL and IMA renewed more than 1 million home insurance policies, involving the SGIO, SGIC and RACV brands.
"We allege that IAG subsidiaries, IAL and IMA, misled their customers about the extent of the discounts they would receive," ASIC deputy chair Sarah Court said.
"The way they operated their pricing algorithm meant that some longer term or more loyal customers were allocated, or may have been allocated, higher premiums before the promised discounts were applied.
"There is a risk that loyal customers, having been promised a discount, were persuaded to stay with these companies, and in doing so lost their opportunity to shop around for a better price."
ASIC also alleges between August 25, 2017 and August 24, 2023:
The ABC has contacted IAG for comment.
By Kate Ainsworth
Retail giant Wesfarmers has seen its profits rise by 4.8% in the past financial year, thanks to strong performances by Bunnings and Kmart.
Bunnings, which is its biggest money-maker, saw earnings rise by 1.2% to $2.23 billion compared to a year ago, as the DIY retailer saw strong demand and activity from customers in the between January 1 and June 30 this year.
Kmart's revenue rose to $10.63 billion for the last financial year, an increase of 16.5% compared to the year prior.
It also earned $769 million — 52.3% above the previous financial year —and is a new record for the business, which Wesfarmers attributes to more normal trading conditions after COVID restrictions eased.
Wesfarmers also owns Officeworks, and which also saw significant growth. Its revenue climbed by 5.9% to $3.35 billion, reflected by back to school trading (thanks to no more home learning from the pandemic) and more orders from businesses.
The country's largest-listed conglomerate said net profit after tax came in at $2.47 billion, compared to $2.35 billion a year earlier.
Wesfarmers will pay a $1.03 dividend per share.
By Kate Ainsworth
Here's how the markets are looking as of 8am AEST:
By Kate Ainsworth
Good morning and welcome to the end of the traditional working week — it's Friday, August 25 and you're reading the ABC's markets and business blog.
Let's start as we usually do by looking at what happened overseas last night, where Wall Street finished lower: The Dow Jones was down 1.1%, the S&P 500 fell by 1.4%, and the Nasdaq down 1.9%.
Why? It's mostly because of what's happening in Jackson Hole, Wyoming right now.
As I write this, there's a whole group of central bankers gathering for an annual symposium, which is just a fancy way of saying they're having a big conference to discuss the economic and financial outlook for the US.
High on the agenda? Inflation — and a speech by Federal Reserve chairman Jerome Powell (who is pictured above alongside New York Fed president John Williams).
In his speech, Powell is going to outline how the US economy is faring and give an indicator into how the US central bank might approach its next rates meeting.
The anticipation for that speech is so high that it's already given markets the jitters and led to investor uncertainty. To quote CommSec senior analyst Tom Piotrowski:
"The markets are a little bit twitchy to say the least ahead of that [speech]."
That's not happening until about midnight AEST, but it looks like it'll be enough to keep our local market on edge, with the ASX set to open lower.
Plus, earnings season is continuing to roll on for another day — we've already heard from Wesfarmers, which has seen a near 5% jump in profits to $2.465 billion. (More on their results shortly.)
Right, let's get a coffee (or a tonic of your choosing) and finish the week strong, shall we?
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)