by Peter Milios
According to the Australian Bureau of Statistics, job vacancies decreased by 1.5 per cent to 438,500 in the three months to February, with the retail trade sector being the main driver of the decline. This marks the third consecutive quarterly decrease, but job vacancy levels remained high in February 2023. Additionally, total job vacancies in November 2022 were 444,200, indicating a 4.9 per cent decrease in the three months from August 2022.
Although the relationship between job vacancies and inflation is complex, the fewer job vacancies can signal that there is weaker demand for labour, which can lead to a decrease in wage pressures, therefore, dampening the effect on inflation.
Overall, at noon, the S&P/ASX 200 is 1.05 per cent higher at 7,124.30.
The SPI futures are pointing to a rise of 76 points.
Best and worst performers
All sectors are in the black. The best-performing sector is Information Technology, up 1.86 per cent. The sector with the fewest gains is Energy, up 0.01 per cent.
The best-performing large cap is Whitehaven Coal (ASX:WHC), trading 2.62 per cent higher at $6.66. It is followed by shares in BHP Group (ASX:BHP) and Pilbara Minerals (ASX:PLS).
The worst-performing large cap is Meridian Energy (ASX:MEZ), trading 1.82 per cent lower at $4.85. It is followed by shares in Santos (ASX:STO) and Newcrest Mining (ASX:NCM).
Asian markets
Asia-Pacific markets are trading mixed on Thursday with Hong Kong looking to extend its gains.
The Hang Seng index futures are standing at 20,301, compared to the index’s last close at 20,192. On Wednesday, Hong Kong markets gained over 2 per cent, led by China’s tech giant Alibaba on news of its major shakeup.
The Nikkei 225 has fallen marginally, while the Topix has seen a larger loss of 0.47 per cent.
South Korea’s Kospi is up fractionally, while the Kosdaq index has gained 0.54 per cent.
Wednesday bounce
No one specific factor behind Wednesday’s bounce. Some focus on the tech strength in Asia driven by the recent Alibaba breakup news. UBS CEO changed another area of focus as banks have struggled to generate a meaningful rebound despite signs of stabilisation following recent turmoil. Some rate stabilisation is likely supportive given the renewed upward pressure on yields earlier this week and the potential signalling for growth/tech. Earnings takeaways have been fairly positive with the strong results and guidance from Lululemon underpinning the consumer resilience theme (following yesterday’s upside surprise in consumer confidence). In addition, Australian inflation slowed in February, coming in cooler than expected. Nothing particularly incremental surrounding the big themes. Bulls focused on Fed pivot expectations, Fed balance sheet re-expansion, growth cushion from still strong labour market, positioning and dampened deposit contagion concerns. Bears largely focused on continued higher-for-longer rate messaging from the Fed, credit crunch implications from recent bank turmoil, pickup in hard landing concerns and earnings risk.
February pending home sales rise for third-straight month
February pending home sales index posted a surprise increase of 0.8 per cent m/m, beating estimates for a 3.0 per cent decline. However, still down 21.1 per cent y/y. NAR economists noted the Midwest and south, the most affordable regions, are leading the housing recovery, highlighting the tailwind from falling mortgage rates. Report capped off a month of solid outperformance in US housing market metrics. Bloomberg’s Housing and Real Estate Market Surprise Index hit its highest levels since late 2020, while analysts highlighted tailwinds from lower mortgage rates, ongoing strong housing demand. However, inventory constraints remain the biggest issue. Jefferies analysts also noted this week that existing home inventories have contracted during a time when it historically grows ahead of the spring selling season. Despite this month’s decline in existing home prices (the first in nearly 11 years), the team said the inventory backdrop should continue to add upward pressure on prices. Goldman Sachs noted high-frequency data show ongoing deceleration in housing as affordability issues offset underlying strength in employment and wages.
Company news
RareX (ASX:REE) announced a 500 per cent increase from the 2021 Mineral Resource Estimate, driven by a highly successful 2022 drilling campaign, establishing Cummins Range as the second largest undeveloped Australian rare earths deposit. RareX Managing Director, Jeremy Robinson, said, ““This is an exceptional result which positions RareX at the forefront of the critical minerals sector in Australia. I would like to thank our hard-working geological and project teams for their exceptional efforts over the past few years to get this point. The future for RareX is looking very exciting.” Shares are trading 31.9 per cent higher at 6.2 cents.
And in more rare earths related news, West Cobar Metals (ASX:WC1) has announced more high-grade rare earth clay mineralisation from their drilling at their Salazar Project in WA. In response to the positive news, Non-Executive Chairman, Rob Klug, commented, “These results still represent less than 60 per cent of the total number of drill holes assayed and we look forward to receiving the remaining holes during April.” Shares are trading 52.9 per cent higher at 13 cents.
Strategic Elements (ASX:SOR) announced that Energy InkTM technology is on track to exceed the power density of solar technology due to technical breakthroughs in the process of converting moisture into electrical energy. Managing Director Charles Murphy said, “. Success in the short-term development pathway outlined will provide a strong, early indication of the technology’s potential to scale up and power certain larger-scale systems.” Shares are trading 13.6 per cent higher at 12.5 cents.
Commodities and the dollar
Gold is trading at US$1782.70 an ounce.
Iron ore is 1.1 per cent higher at US$125.10 a tonne.
Iron ore futures are pointing to a 0.73 per cent rise.
One Australian dollar is buying 66.73 US cents.
