ASX 200 afternoon report: 13 June 2024

The ASX 200 trades 41 points (0.54%) higher at 7756 at 2.30pm AEST.

The ASX 200 has rebounded today despite a nasty two-day sell-off start to this holiday-shortened week. This is supported by gains on Wall Street and a cooler-than-expected US inflation reading.

Inflation influences probability of Fed rate cut

Data showed that core inflation in the US increased by 0.2% in May, allowing the annual core inflation rate to ease to a three-year low of 3.4%. The cooler reading saw the probability of a Fed rate cut in September rise to 57%, with a total of 45bp cuts priced before year-end.

Additional jobs encourage RBA rate hold

While hopes of a Fed cut have risen in the last 24 hours, the same cannot be said for the Reserve Bank of Australia (RBA). After today's labour force report for May showed the Australian labour market remains in good health. The Australian economy added 39,700 jobs in May, marginally stronger than the 30,000 gain the market expected. Plus, the unemployment rate eased to 4.0% from 4.1% prior.

The Australian Bureau of Statistics last month forewarned about the possibility of a stronger outcome today. Noting that more people than usual were waiting to start work in May, like in January when unemployment subsequently retraced. Today's labour force report increases the likelihood that the RBA will keep rates on hold at 4.35% next week as it continues to target sticky inflation.

ASX 200 stocks

IT stocks

IT stocks have gained after Broadcom surged 14.57% in after-hours trading after it announced a 10-for-1 stock split and strong earnings.

• Nextdc surged 3.95% to $18.39
• Life360 gained 3.56% to $14.26
• Zip gained 3.28% to $1.34
• Seek added 2.93% to $23.50

Real Estate stocks

Real Estate stocks have surged after cooler US inflation data brought Fed rate cuts into sight.

• Goodman Group gained 3.08% to $35.79
• REA gained 2.98% to $191.75
• Centuria added 2.21% to $1.73
• GPT Group added 1.70% to $4.17

Banking sector

• NAB added 1.04% to $35.10
• CBA gained 1.00% to $125.39
• Westpac gained 0.66% to $26.88
• ANZ gained 0.56% to $28.94

Mining sector

It's been a mixed day for the big miners after Chinese inflation data released yesterday shows the Chinese economy has been unable to break the shackles of a deflationary vortex.

• Mineral Resources fell 1.09% to $63.44
• BHP lost 0.61% to $43.23
• Rio Tinto lost 0.26% to $120.72
• Fortescue gained 0.13% to $23.32

Sigma Healthcare

Sigma Healthcare's share price fell 5.81% to $1.13. After the ACC outlined preliminary competition concerns with Sigma's proposed acquisition of Chemist Warehouse. We have doubts about whether this one will receive the go-ahead. Given that Sigma is one of the largest wholesalers of prescription medicines, and it would create a merged entity with pricing power in the politically delicate pharmacy sector.

ASX 200 technical analysis

The view remains that the ASX 200 will trade sideways between 7900 and 7600 this month. Before an eventual break higher in the new financial year towards 8000. A sustained move above resistance at 7900/10 would confirm that the next leg higher has commenced. On the downside, a sustained break below 7600 would open a deeper decline towards 7400.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 13 June 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}