The S&P/ASX 200 (ASX: XJO) fell 0.3% on Tuesday, the first day of winter, with consumer confidence taking a hit as the Victorian lockdown rolls on.
Every sector was weaker except energy and materials, which added 1.3% and 0.3%, respectively. Healthcare and financials were the hardest hit, falling 0.7% each as the major banks retreated from recent highs.
Vitamin seller Blackmores Limited (ASX: BKL) and miner Lynas Rare Earths Ltd (ASX: LYC) were the biggest decliners, falling 5.0% and 4.9% respectively as the Chinese export market slows.
Rates on hold
The Reserve Bank held rates at 0.1% as expected, however, highlighted the growing risks in the property market as investor demand outstripped owner-occupier loans, driving a 2.2% price rise across Australia in May.
Whilst the cash rate is on hold, fixed home loan rates have already been increasing in recent months as the banks seek to refinance their super cheap RBA-backed debt with new bond issues, sending their cost of capital higher.
The board reiterated that they will not be making a call on their quantitative easing program until July as previously flagged.
ASX banks upgrade GDP forecasts
The major banks have upgraded their GDP expectations ahead of the official release today, with the result expected to confirm Australia’s position as one of the strongest economies in the world; at least at a headline level.
Australia and New Zealand Banking Group (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA) are most bullish, expecting 2.1% and 2.0% quarterly growth with National Australia Bank (ASX: NAB) and Westpac Banking Corp (ASX: WBC) more conservative, forecasting 1.7% and 1.6%. If recent results are anything to go by it may be a long way off.
Magellan launches FuturePay
Magellan Financial Group Ltd’s (ASX: MFG) retirement income solution ‘FuturePay’ went live on Tuesday.
Whilst not an annuity, the fund seeks to dampen the volatility of global sharemarkets for retired investors, hiving capital into a ‘support’ trust when returns exceed expectations, with this capital used to ensure a regular income can be paid regardless of market conditions. Magellan shares finished the day flat.
Macquarie streets ahead
APRA data has highlighted the stark technology edge built by Macquarie Group Ltd (ASX: MQG) in home lending, which I can attest to having refinanced in 2020.
Macquarie’s loan book grew by 25% in April and 33% over the last 12 months. This equates to Macquarie’s issuance of loans growing at seven times the speed of the rest of the market, with CBA the closest competitor growing at 1.2 times the system at 4.5%.
The bank is much smaller in size but has clearly seen an opportunity in a still people-heavy sector; shares were down 1%.
ASX 200 today
The ASX 200 is set to edge higher when the market opens on Wednesday despite a mixed lead from US markets overnight. For all the latest, check out Rask Media’s daily US stock market report.
