ASX WRAP: Top Wednesday news from company reporting season on the Australian market
Australia’s share market soared to a fresh record high yesterday after a unanimous decision by the Reserve Bank of Australia to slash the official cash rate.
The S&P-ASX200 shot up just after the call and rallied to reach a new peak. How much higher will it go today?
We’ll get a good idea if Commonwealth Bank’s stock is worth its sky-high valuation when the country’s largest home loan lender reports its results today.
Also under the microscope will be Treasury Wines Estates, AGL Energy, Computershare, Evolution Mining and Insurance Australia Group.
Wage data from the Australian Bureau of Statistics is also out today.
We’ll bring you all the news you need to know. Stay tuned ...
Key Events
Average mortgage size hits new record high
The average new loan size for owner-occupiers has hit a record high of $678,000.
The data from the Australian Bureau of Statistics’ lending indicators for the June quarter showed a $18,000 rise since the March and June quarter, fuelled by the RBA’s February and May cash rate cuts.
That equates to an estimated increase of $198 a day.
NSW has the largest average new loan size for owner-occupiers at $816,000, a new record for the State, after a rise of $21,000 between the March and June quarters.
WA hit a record high of $620,000, recording the biggest growth of the States and Territories in both percentage and dollar terms, with an increase of $26,000 - or 4 per cent - in just one quarter.
Other States hitting record-high average new loan sizes were Victoria, Queensland and South Australia. All data is in original terms and rounded to the nearest $1000.
And yesterday’s third round of relief from the RBA is set to fuel the flames.
As rates fall, homebuyers have capacity to borrow even more.
Analysis by Canstar shows that a single person earning the average full-time wage, as recorded by the ABS, could potentially borrow an additional $12,000 from the bank, as a result of the cash rate cut.
Read more here.
While you were sleeping ...
Here’s what happened on US markets overnight.
The S&P 500 and the Nasdaq have scored record closing highs as news that July US inflation rose broadly in line with expectations bolstered bets on a Federal Reserve interest rate cut next month.
The Labor Department said the Consumer Price Index rose 0.2 per cent on a monthly basis in July while annual inflation came in slightly below forecasts, drawing calls from US President Donald Trump to lower interest rates.
Yields on shorter-dated Treasury bonds - a reflection of interest rate expectations - slipped and rate futures showed traders are giving an 88.8 per cent chance that the Fed could lower rates by about 25 basis points in September.
“The CPI data is supportive for equities overall, getting some good news with the Fed looking more on track to cut in September and potentially more transitory inflation,” said Katherine Bordlemay, co-head of client portfolio management, fundamental equities at Goldman Sachs Asset Management.
“The first thing I’d guide is continue to lean into the theme of the big are getting bigger. We continue to have conviction around mega-tech and technology.”
Read the full market wrap here.
Originally published on The West Australian
