The ASX 200 is trading up 13 points (0.18%) at 7468 at 3.30pm Sydney time.
The ASX 200 has turned lower this afternoon after month-end selling balances flows and lower-than-expected retail sales and home loan data for December.
December home loan growth rose just 0.3%, the slowest pace since October 2022. At the same time, retail sales fell 3.9% in December (versus -0.2% expected), the most significant monthly decline since August 2020.
While these numbers did not rule out the RBA raising rates next week or easing concerns around Australia’s housing market or household consumption, they did help ease expectations around the RBA’s top cash rate, falling from 3.85% to 3.75%.
Consumer staples sector
Falling house prices, high inflation and RBA rate hikes are weighing on discretionary spending, with the consumer staples sector outperforming the defensive.
- Woolworths added 3.2% to $35.88.
- Coles added 2.45% to $17.77.
- Metcash added 1.2% to $4.17.
- Infant formula maker Bubbs Australia fell 9.15 percent from the lockers on disappointing sales in China.
What does soft housing and retail data mean for AUD/USD? Read Tony’s analysis here.
IT sector
- Following a disappointing quarterly update, Megaport fell 23% to $5.90.
- BNPL Shares Sezzle -7.69%
- Zip -3.28%
- Block fell -2.37% after the release of weaker-than-expected retail sales numbers, which weighed on earnings.
Financial sector
The big banks have turned low in a toxic mix of weak credit appetite and households starting to feel the effects of cost-of-living pressures.
- NAB fell -0.38% to $31.71
- ANZ fell 0.24% to $24.97
- Westpac fell -0.21% to $23.70
- CBA is trading flat at $109.77 today after making a new all-time high of $110.45.
Mining sector
Materials stocks had a mixed day despite a boost in China’s PMI data, now in the 50.1 expansion range following China’s reopening in mid-December.
Technical analysis
Over the past five sessions, there has been a significant loss of momentum in the ASX 200 – understandable after a wave of highs in January. Additionally, the ASX 200 is overbought, and for Elliott Wave fans, there is a five-wave advance from the October 6411 bearish RSI divergence low, warning of a possible pullback.
We are looking to buy a bull market high of 7632 and a sustained break of the 7632 high or a pullback to the 7200/7000 support area.