This was the investment company that took control when Evergrande had defaulted on a loan from the $157 billion asset manager. The prime shorefront property was key to the developer’s plans to restructure its overseas debts and the move threw that process into disarray.
A cash rate of 1%
Markets are pricing in a peak cash rate of 1 per cent this year as a measure of consumer prices soared to its highest level in eight years, increasing pressure on the Reserve Bank to start winding back stimulus. Trimmed mean inflation, which excludes the most volatile items and is the Reserve Bank’s most-watched measure for the purpose of policy, was 2.6% year-on-year in the December quarter two years ahead of the bank’s own projections and well within its 2%-3% target range.
Sezzle zips higher, Zip sizzles
Buy now pay later (BNPL) firm Zip is in discussions to purchase its US rival Sezzle, the companies said on Tuesday, as the sector struggles against competition from well-resourced newcomers and scrutiny from regulators. Sezzle shareholders responded warmly, with shares jumping as much as 19% of value before closing the week up 7.8%. Zip shareholders are much less excited, and the stock is down 12% this week. The deal would also provide Zip with a means to compete with the likes of Swedish BNPL firm Klarna or payments behemoth Paypal. This follows the completion of US payment giant Block’s (previously known as Square) acquisition of Afterpay.
Mortgage rates rise
Mortgages with a fixed rate are now approaching pre-pandemic levels as the promise of rising interest rates abroad pushes up the cost for local banks to fund loans. The average 4-year fixed rate mortgage from a big four lender is now 3.35% back to levels not seen since January 2020, according to data from RateCity. Banks have to pay more to raise funding in overseas markets as the US Fed is in the process of tightening interest rates. That’s been a swift change, the average 4-year fixed mortgage was 2.38% in August.
Ukrainian trouble is a gift to the oil markets
Families of diplomats are being evacuated from Ukraine when tensions with Russia rise. U.S., Canada, and Australia withdraw families of diplomats as regional war scare heightens amid Russian standoff. Oil markets are reacting, with the benchmark Brent crude oil up 14 percent thus far this year. But, local producers like Woodside are well and truly in the money, with share prices up 9% in 2023.
ASX corrects (briefly)
After returning from the Australia Day break determined to sell, the S&P/ASX 200 joined the Nasdaq Composite in correction territory on Thursday. Shares on the benchmark index plunged 1.7 percent, marking a slide of more than 10 percent from a recent peak, as it is called, a correction. A bounce of 2.2% on Friday brought the benchmark index back out, for a year to date drop of 8%.
Apple revenue sets another record
BIPO Technology investors don’t have a whole lot of good news to read on Thursday evening after Apple shattered analyst expectations with record quarter four revenue and profits. The computer and iPhone maker reported US$123.9 billion in revenue. Net income rose 20% to $34.6 billion, compared with analyst estimates of US 31.1 billion. iPhones accounted for 58% of total revenues globally, joining the top five also in the US and Australia in the most selling smartphones. Shares rose 5% in after hours trading.
Crypto markets stabilise
Blockchain investors got some consolation this week as the selloff in dominant coins Bitcoin and Ethereum calmed. In a choppy week of trading, Bitcoin swung between $46,000 and $53,000, settling up 4% on the week at $52,000. Ethereum, which some say has more technical applications, fell 2.5 percent on Friday to around $3,400. Both coins have fallen at least 20 percent this year.
ASX 200 ends lower for a third week: The week that was
The S&P/ASX 200 ended a massive Friday session up 2.2% to 6988.1, with every sector healing in the green.
Consumer discretionary stocks led the way with a 3.3% gain, and telecom services stocks were up 2.9%. Breville was up 6.8%, Premier Investments climbed 4.8% and Wesfarmers was up 4.2%.
Newcrest Mining slid 6.4% despite saying it remained on track to meet its annual guidance. BHP rose 2.7%, and Ramelius Resources, which dropped 8.0%, was the biggest loser of the day.
The ASX 200 fell 2.6% for the week, its third-straight weekly finish in the red.
