Wall Street drifts around its records following a worldwide rally
The S&P 500 rose 0.2 per cent, coming off its latest all-time high. The Dow Jones was up 412 points, or 0.9 per cent, while the Nasdaq composite rose 0.1 per cent after setting its own record the day before.
The Australian sharemarket is set to jump, with futures at 4.57am AEST pointing to a rise of 33 points, or 0.4 per cent, at the open. The ASX shed 0.6 per cent on Wednesday. The Australian dollar was 0.2 per cent stronger to US65.41¢ at 5.11am. Reporting season continues, with Westpac and Suncorp among those due up on Thursday.
Treasury yields eased in the bond market as expectations reached a virtual consensus that the Federal Reserve will cut its main interest rates for the first time this year at its next meeting in September. Lower rates can boost investment prices and the economy by making it cheaper for US households and businesses to borrow to buy houses, cars or equipment, though they risk worsening inflation.
Stock indexes jumped in Asia in their first trading after Tuesday's better-than-expected report on US inflation triggered a jump in bets that a cut to interest rates is coming. Hong Kong's Hang Seng leaped 2.6 per cent, Japan's Nikkei 225 rallied 1.3 per cent and South Korea's Kospi climbed 1.1 per cent.
Indexes also rose in Europe, though the moves were more modest after they already had the chance to trade on the US inflation data the afternoon before. Germany's DAX returned 0.7 per cent, and France's CAC 40 rose 0.7 per cent.
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On Wall Street, the hopes for lower interest rates are helping to drown out criticism that the US stock market has grown too expensive after its big leap since hitting a low in April.
One way companies can make their stock prices look less expensive is to deliver strong growth in profits, and Brinker International became the latest to report stronger results for the latest quarter than analysts expected. The company behind the Chili's brand said it saw more customers coming to its restaurants, and it's also making more profit off each $1 in sales.
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Perth Now
8 minutes ago
- Perth Now
Reason Aussies are $3k worse off
Australians are $3000 a person worse off as a lack of competition among businesses adds to the country's productivity woes. That's the view of the Reserve Bank's latest research paper, which shows everyday Aussies are paying the price for the nation's lack of competition. The paper argues a core problem in Australia in the lead-up to the Covid-19 pandemic was the domination of big business, which led to higher prices. A lack of competition among businesses is costing households. NewsWire / Simon Bullard. Credit: News Corp Australia This in turn had negative impacts on productivity, incomes and the welfare of Australians as well as a misallocation of resources between firms. The RBA estimates that by 2017, this misallocation reduced productivity between 1 to 3 per cent, with the upper end of this range equating to every Australian being $3000 worse off today. 'Declining competition and productivity may be linked,' the RBA's report said. 'A decline in the degree of competition has the potential to weigh on productivity through a number of channels. 'It can blunt firms' incentives and ability to invest, innovate, improve and adopt new technologies.' The fall in productivity was not uniform across the economy. According to the paper, much of the falls were in 'upstream' industries, including manufacturing, wholesale trade and professional services. The RBA suggests the flow-on impacts could have reduced the goods and services businesses produce by as much as 40 per cent and households' quality of life by 20 to 30 per cent. Australia's Cash Rate 2022 The RBA's paper came out just days after the central bank's latest statement on monetary policy, which estimates productivity will continue to fall to just 0.7 per cent. According to the Australian Bureau of Statistics, Australia's long-term productivity has slumped. In 2003-2004, productivity grew at 1.8 per cent a year; in 2022-2023, it was down to just 0.9 per cent a year. The ABS graph shows Australia's falling productivity: Picture ABS Credit: Supplied To put a dollar figure on it, the Productivity Commission estimated that full-time workers would be $14,000 a year worse off by 2035 if Australia couldn't rediscover its previous growth and continued on its current trend. RBA governor Michele Bullock explained why the central bank cannot solve the productivity issue. Christian Gilles / NewsWire Credit: News Corp Australia When asked about productivity at a press conference, RBA governor Michele Bullock repeatedly pointed out it wasn't the central bank's issue. 'Businesses are looking at what they can do to take themselves out of the productivity slump,' she said 'There's nothing the Reserve Bank can do. 'All the Reserve Bank can do is make sure we have low and stable inflation, and if we have full employment, both of those things are very stable environments for businesses to think about how they might improve productivity, how they might produce more for the same amount of labour and capital input.' Australian politicians, industry experts and economists will soon meet in Canberra for a three-day forum aimed at lifting productivity. The roundtable has a focus on regulation, taxes, AI and even the amount of hours Australians should be working.
Sky News AU
28 minutes ago
- Sky News AU
Struggling Aussies revile 'disgusting' mega profits from Origin, IAG, CBA as cost of living pressures plague millions
Major Australian companies have unveiled massive profits, causing 'disgust' from struggling Australians suffering cost of living pressures. On Thursday, the nation's largest telco Telstra posted a 31 per cent profit jump in the 2025 financial year to $2.34 billion, Australia's largest energy company Origin lifted 26 per cent to $1.49b and profits of the third biggest bank Westpac grew 14 per cent to $1.9b. These followed insurance provider IAG's profit lifting 51 per cent and the Commonwealth Bank of Australia, the nation's largest company and the highest valued bank in the world, posting a $10.1b profit. Some of these results incensed Australians who questioned how these major companies could reap such large profits while cost of living pressures persist. 'Anyone else disgusted by the profit announcements this morning?' a Reddit user asked on Thursday. 'I thought we had a cost-of-living crisis and inflation? People are suffering and struggling, but the corporates just get away with price gouging and insane increases in profitability? 'I get inflation happens, but these figures feel real out of step with inflation. 'I run a small business and tolerate lower margins when things are tough - why shouldn't our corporates also tighten their belts when the rest of us do? An increase is good - but 25-30 per cent feels obscene.' Another lamented that the companies would be pressured to beat these results in the next quarter, while another said the lack of competition in many Australian sectors meant major companies could continue scoring huge profits. 'Highly competitive markets are a race to the bottom,' the Reddit user said. 'These listed companies enjoy very little competition or heavily manipulated markets.' IAG's profit jump came as it enjoyed higher income from insurance premiums and lower-than-expected natural disaster payouts. The company's gross written premium income rose by 4.3 per cent to $17.1b while its total payouts were $10.2b for the 2025 financial year. Meanwhile, payouts for natural disasters was $195m below what the company expected. It comes as insurance costs have surged more than 35 per cent in the three years to June. Meanwhile, Origin's profit rise followed energy costs soaring over the past few years. While various state and federal government power rebates partly covered consumers, major energy companies continued to reap massive profits as electricity prices soared. 'I really need cost of living explained to me like I'm a five year old," a Reddit user said. "Over the past twelve months, various governments gave me large sums of money via my electricity bill to help with my 'cost of living', to then pass onto Origin who records a $1.5 billion profit?' Another user claimed the government rebates were barely covering the daily supply charges or the rate increases many faced. 'So, the money went straight back to the electricity retailer,' they said. CBA's massive profit was torn into by the Finance Sector Union, which labelled the bank 'un-Australian' for slashing jobs in favour of offshore work and AI. 'CBA is Australia's wealthiest bank, yet it is systematically undermining local workers, shunting jobs offshore and replacing skilled workers with untested automation,' FSU national secretary Julia Angrisano said. Alongside these companies, JB Hi-Fi revealed a $462m profit earlier this week while Evolution Mining posted a $926m profit and Penfolds-owner Treasury Wine Estates's profit was almost $437m.
Sydney Morning Herald
38 minutes ago
- Sydney Morning Herald
The end of negative gearing as we know it? Spender calls for new income tax system
Spender's plan would mean property losses could only be used to offset taxable income on other capital investments, or carried forward to tax paid on capital gains when they are sold. She said the current tax system acted as an incentive for people to sink money into property, but was a disincentive for someone who wanted to boost their skills or work. Moving to a dual-income system would limit the attractiveness of negative gearing and trusts. 'You should be rewarded for investing in yourself, not for expanding your property portfolio,' she said. 'We're taxing young people when they aren't getting high pay, and they're facing high costs such as buying a home or childcare. It's actively working against young people.' In the 2022-23 financial year, 1.1 million people made a net loss on their property investment, with a similar number either breaking even or recording a profit. The number of negatively geared investors is expected to grow due to the rise in mortgage interest rates that began in 2023. Spender said any change would require a transition period to enable people to adapt to the new system. She said her proposal would be budget neutral, as extra tax collected on property investors would be used to either cut personal income tax rates or lift the thresholds at which tax rates change. She said the current tax system was using bracket creep as a 'silent driver' of budget repair, while her proposal would encourage people into the workforce and reward those who depend on wage income. 'We're not incentivising people to be the best that they can be, but how much they can put into property. We can't keep doing that,' she said. Her proposal emerged as the Reserve Bank released research showing that a fall in competition across the economy since the early 2000s had directly contributed to Australia's slowdown in productivity that is costing every person up to $3000. Loading RBA economists Jonathan Hambur and Owen Freestone found that if competition were around the level it was at the turn of the century, overall productivity would be 1 to 3 per cent higher, and the economy up to $80 billion larger due to a better allocation of business resources. 'This shows that declining competition has been a significant drag on productivity, and therefore GDP and incomes,' they found. 'These are important findings. They suggest that declining competition in the Australian economy can account for a significant portion of the slowdown in productivity growth, and therefore growth in incomes and living standards.'
