The Australian share market closed lower on Friday, with shares in Santos also lower after Aramco dismissed "inaccurate" reports of its potential takeover of the company.
The Australian dollar hit its highest since January 2 to buy $US67.4 cents, while the Bitcoin price fell to a four-month low.
Meanwhile, a report by the ACCC has warned that the eastern states could face a gas shortfall by 2027 β a year earlier than it had previously predicted.
Follow the day's financial news and insights from our specialist business reporters on our live blog.
Disclaimer: this blog is not intended as investment advice.
Key events
- ASX closes Friday lower
- Card activity falls ahead of tax cuts: Westpac
- Samsung shares leap on strong AI demand
To leave a comment on the blog, please log in or sign up for an ABC account.
Live updates
Pinned
Market snapshot
By Nassim Khadem
ASX 200: -0.1% to 7,822.3 points (live figures below)
Australian dollar: steady at 67.4 US cents
S&P 500: +0.5% to 5,537 points
Nasdaq: +0.9% to 18,188 points
FTSE: +0.9% to 8,241 points
EuroStoxx: +0.6% to 517 points
Spot gold: +0.4% $US2,365/ounce
Brent crude: -0.3% $US87.13/barrel
Iron ore: -1.8% to $US111.65/tonne
Bitcoin: -4.6% to $US54,398.1
Prices current around 4.20pm AEST.
Live updates on the major ASX indices:
ABC Embed
https://www.abc.net.au/news/business/embed/quote-list?abcnewsembedheight=1000
Happy Friday
By Nassim Khadem
Happy Friday to our wonderful blog readers.
Thanks for tuning in.
I am off to make an elaborate Persian rice dish. This is how the Persians roll when it comes to dinner... (credit to my auntie for this spread):
Key Event
ASX closes Friday lower
By Nassim Khadem
The S&P/ASX200 closed lower Friday, falling 9.5 points or 0.12 per cent to 7,822.30.
But the index still saw a 0.7 per cent gain over the week, led by mining stocks.
Wall Street was closed for Independence Day on Thursday, and in the UK, early results showed the Labour Party will win the election.
The Australian dollar hit its highest since January 2 to buy $US67.4 cents, while the Bitcoin price fell to a four-month low.
Key Event
Card activity falls ahead of tax cuts: Westpac
By Nassim Khadem
Westpac says use of credit and debit card transactions has dropped ahead of tax cuts landing in peoples bank accounts.
The Westpac Card Tracker Index β which looks at indicators based on the millions of credit and debit card transactions processed by the big four bank every day β fell 2.6 points to 130.2 over the two weeks to June 29.
This marks the lowest read in just over a year with the Index recording declines in six of the last eight weeks, Westpac said.
"Momentum has continued to weaken," Westpac senior economist Matthew Hassan said.
"Monthly and quarterly growth measures are firmly in contraction. Card activity is tracking a 0.4 per cent month decline for the June month as a whole and a 0.6 per cent decline over the quarter.
"While this does not map perfectly to total spending, it points to a material slowdown from the 1.3 per cent quarter gain in nominal consumption recorded in the March quarter.
Wat to know how much you'll get in tax cuts? Find out here:
Key Event
Samsung shares leap on strong AI demand
By Nassim Khadem
South Korean electronics giant Samsung's shares jumped to their highest level since January 2021 after the South Korean tech giant said it expects better-than-expected profit for the second-quarter, thanks to skyrocketing demand for artificial intelligence.
Its share price climbed in overnight trade, with Samsung shares closing at 84,600 won on Thursday.
Samsung expects operating profit for the April to June quarter to be about 10.4 trillion won, a massive rise from from 670 billion won a year ago.
The firm also said it expects revenue for the second quarter to be between 73 trillion to 75 trillion won, from 60.01 trillion won one year ago.
Samsung said in April it expects the second quarter to be driven mostly by demand for generative AI, while mobile demand remains stable.
![As it happened: ACCC warns east coast could face gas shortfalls by 2027, ASX lower (2) As it happened: ACCC warns east coast could face gas shortfalls by 2027, ASX lower (2)](https://i0.wp.com/au-img-cdn.livecenter.com/lc-aus-images/lcimg-f000ecc3-f3a6-4bff-aab8-61f808d04cd1.jpeg)
The company has invested heavily in generative AI with its Galaxy S24 Ultra smartphone.
The latest phone comes with features for editing photos and searching for items online by using AI.
Earlier this year, Apple's iPhone became the world's biggest selling smartphone for the first time, ending Samsung's 12-year run as market leader.
But the two companies continue to battle for the top spot with more clever AI features. More on that here:
Hybrid car sales are streets ahead of EVs, and it's causing emission reduction concerns
By Kate Ainsworth
Data published by the Federal Chamber of Automotive Industries (FCAI) this week shows that sales of hybrid cars are outstripping those of electric vehicles (EVs), with experts concerned it will slow down the national reduction on transport emissions.
The figures show hybrid cars made up 14.4% of all new cars sold in June, compared to 7.8% just 12 months ago.
Comparatively, EV sales fell to 8.3%, down from 8.8% in June 2023. In fact, it's only the second time since 2020 that EV sales declined.
The trend is a worrying one for experts, who fear the boost in popularity for hybrid vehicles will delay the mass uptake of EVs, and hinder efforts to reduce emissions.
You can read the full story from ABC Science's technology reporter James Purtill below:
Are derelict homes part of the answer to Australia's housing crisis?
By Kate Ainsworth
Official figures suggest there areup to 140,000 properties sitting vacant and derelict across the country, while record-low rental vacancy rates push rents through the roof.
So could these derelict homes help Australia solve its housing crisis?
That's an argument being made by local governments and property law experts, who want to see state governments use their powers to force the owners of empty and run-down homes to use them or lose them.
You can watch or read the full story from business editor Michael Janda below π
Loading...
Key Event
PayPal Australia's 'unfair' term in small business contracts
By Nassim Khadem
PayPal Australia used an "unfair" term in its standard form contracts with small businesses, a Federal Court has found.
The court found that the term was unfair because its effect was to allow PayPal to retain fees that it had erroneously charged if the small business failed to notify PayPal of the error within 60 days of the fee appearing on its account statement.
The court also ordered the company pay ASIC's litigation costs in the case, which commenced in September 2023 and covered small businesses who opened a PayPal Business Account between September 21, 2021 and November 7, 2023.
At the end of June 2023, there were more than 600,000 small businesses with PayPal Business Accounts.
PayPal agreed that the term was unfair and consented to the declarations, having voluntarily removed the term from its contracts on November 8.
The court declared the unfair term void from the start of the contracts and ordered that PayPal be restrained from applying, relying on, or enforcing, the term in its contracts with small businesses.
"Today's decision serves as a reminder to all businesses that unfair contract terms contained within standard form contracts with small businesses will not be tolerated, and that ASIC will take decisive action where appropriate to protect the rights of consumers and small businesses," ASIC deputy chair Sarah Court said.
A spokesman for PayPal Australia said the company "takes our responsibility to our customers very seriously and we have been working in full cooperation with ASIC on this matter".
ASIC says it has ramped up the number of investigations it is undertaking against companies over the past 12 months following criticism heard during a Senate inquiry that the regulator has failed to properly do its job and that Australia has become a haven for white-collar crime. More on that here:
Key Event
Bitcoin price continues to fall
By Nassim Khadem
The Bitcoin price has continued to fall over the past 24 hours and is down 5.82 per cent over the past week.
In afternoon trade, it's dropped almost 3 per cent to US$55,498.
The price is now at a fourth-month low.
The plunge follows US Federal Reserve chairman Jerome Powell recently playing down expectations about an interest rate cut, saying there is a need for more convincing evidence on inflation before taking action.
Analysts say this cautionary language from the Fed, as well as geopolitical uncertainty, has cooled market enthusiasm, contributing to the fall of Bitcoin.
While analysts think it could sink further, traders are more optimistic in their expectations of where the price will go.
![As it happened: ACCC warns east coast could face gas shortfalls by 2027, ASX lower (3) As it happened: ACCC warns east coast could face gas shortfalls by 2027, ASX lower (3)](https://i0.wp.com/au-img-cdn.livecenter.com/lc-aus-images/lcimg-dc01b6c1-6def-4756-8f63-bdcab1bd98b4.jpeg)
Key Event
Will oil prices continue to climb?
By Nassim Khadem
Strong demand and lower OPEC exports are pushing oil prices higher, but will prices continue to leap?
Crude oil prices have climbed higher this week, with the benchmark Brent crude price trading above $US87 a barrel β the highest levels since April.
Reuters reports Brent crude futures were up 21 cents, or 0.2 per cent, at $87.55 a barrel overnight and US West Texas Intermediate (WTI) crude futureswere up 18 cents at $84.06 in trade thinned by the US Independence Day holiday.
Those gains followed a bigger than expected decline in US crude stocks.
The US Energy Information Administration (EIA) reported a 12.2 million draw in inventories. Analysts polled by Reuters had expected a draw of 680,000 barrels.
Analysts are predicting the rise could extend into the coming weeks, hitting $90 per barrel, and there's in previous months been talk that prices could hit $100 per barrel.
The war in Gaza and elections in France and the United Kingdom are also creating geopolitical uncertainty.
Traders will be watching for data on US employment later on Friday, which may influence the direction of interest rates there.
OPEC can control prices β by cutting production and reducing supply β so the question is, if the oil price keeps rising, will OPEC reverse its production cuts? I explain how the OPEC oil cartel works here in an earlier explainer I did late last year:
Key Event
Why headline inflation also matters for interest rates: CBA
By Nassim Khadem
When making predications about inflation and interest rates, economists have generally focused more attention on underlying inflation rather than headline inflation.
CBA head of Australian economics Gareth Aird writes that headline inflation is just as important for the policy outlook as underlying inflation in 2024-25.
"The headline rate of inflation from the September quarter takes on added importance because on our forecasts it will sit within the RBA's target band (of 2 to 3 per cent)," he notes.
"My colleague Stephen Wu calculated that the combined impact of the Commonwealth and State Government electricity rebates will shave two thirds of a percentage point off Q3 24 CPI.
"On our forecasts this will drop the annual rate of headline inflation to a little under 3 per cent where it should broadly sit over 2024/25."
Mr Aird says while it is true that headline inflation is 'artificially' lowered by the electricity rebates, CBA "do not expect a A75 rebate per quarter to stimulate demand more broadly in the economy".
"And actual inflation outcomes play a very important role in influencing the future path of inflation," he says.
He also argues that headline inflation plays an important role in influencing inflation expectations, indexation and wage settings.
"Lower headline CPI will also put downward pressure on wages growth in 2025 given the rate of headline inflation is often used as a starting point in a lot of wages negotiations," he says.
But in the very nearβterm financial market participants will be focused on the upcoming Q2 CPI due for release on July 31.
"If the labour market were to further loosen in the June labour force survey the RBA may leave rates on hold in August with a 1.0%/qtr Q2 24 trimmed mean outcome," he notes.
"But if the labour market showed no signs of additional loosening in June the RBA may feel compelled to pull the rate hike trigger in August.
"Our base case for the RBA to sit on hold in August and to deliver a first rate cut in November is premised on both Q2 24 trimmed mean of 0.9%/qtr followed by 0.7%/qtr in Q3 24 and an ongoing upward trend in the unemployment rate."
Key Event
Consumer spending flatlines as interest rate hikes bite
By Michael Janda
Fresh data out from the ABS shows just how effective rising interest rates have been at reducing consumer demand.
The data, derived from actual transactions through the banking system, show consumerspending rose just 0.1% overall over the past year.
Indeed's Asia-Pacific economist Callam Pickering says that's despite rising prices and strong population growth, meaning the average Australian household has cut back dramatically.
![As it happened: ACCC warns east coast could face gas shortfalls by 2027, ASX lower (4) As it happened: ACCC warns east coast could face gas shortfalls by 2027, ASX lower (4)](https://i0.wp.com/au-img-cdn.livecenter.com/lc-aus-images/lcimg-c9c37afd-73ac-4def-aa45-6b233d7aebe6.jpeg)
"Spending continues to be driven by non-discretionary or essential items, up 1.8% over the past year," he notes.
"Spending on these items is often hard to avoid β they are 'essentials' for a reason β and so the consumption of these goods and services tend to be less sensitive to changes in price or economic conditions. The reason the current cost-of-living crisis has been so damaging is precisely because it's been concentrated among essentials.
"And then we have discretionary spending, down 1.9% over the past year, which reflects households trying to save money from an increasingly tight household budget.
"In other words, Australian households are having a lot less fun with their hard-earned cash than they used to. Spending on recreation & culture was down 2.8% over the year, with spending at hotels, cafes & restaurants down 3%."
![As it happened: ACCC warns east coast could face gas shortfalls by 2027, ASX lower (5) As it happened: ACCC warns east coast could face gas shortfalls by 2027, ASX lower (5)](https://i0.wp.com/au-img-cdn.livecenter.com/lc-aus-images/lcimg-4770f96f-6137-4fe7-a886-f1ea8086fcb7.jpeg)
Mr Pickering says it's still possible the Reserve Bank might hike interest rates next month, despite signs many households are struggling to make ends meet.
"Subdued household spending remains a concern for the RBA given it accounts for a large share of economic activity. Right now though, that's being overshadowed by continued tightness in the labour market and inflation that remains uncomfortably high.
"It's quite possible that we may only be a month away from another rate hike, following some nasty inflation figures towards the end of June."
Catch up on our deep dive into beauty dupes
By Kate Ainsworth
Hey Kate π I really liked your story on dupes.
- Natty
Hello and happy Friday Natty! Always great to hear from you.
Thanks so much for your kind words about the beauty dupe deep dive (try saying that five times fast), and for giving me another reason to talk about the stories. π€
It was a joint effort with my very talented colleague Emilia Terzon, and I know she won't mind me saying we've learnt *a lot*about intellectual property, trademarks and patents.
Full disclosure, I am a long-time observer and participant in the beauty world (if you need proof, it's some of what's in my actual makeup bag that ended up displayed in this story) and the feedback we've received on the stories has been wide-ranging and generated plenty of discussions online.
If you missed it, you can catch up on the series of stories here:
- After being sued twice, MCoBeauty has become a multi-million-dollar empire built on beauty dupes
- In the world of beauty duping, patents offer little protection and small businesses are most vulnerable
- MCoBeauty follows a rigorous process when it dupes cosmetics. Here's what it looks like
And before I hop off my self-promotion bandwagon for the morning, if anyone joining us on the blog has information or a story they'd like to share about the world of beauty dupes (or anything else, for that matter), I'm all ears.
Get in touch by dropping me a line at Ainsworth.Kate@abc.net.au or kateainsworth@protonmail.com if you'd prefer a more secure option.
Loading...
Key Event
ACCC warns of gas shortages for eastern states from 2027
By Kate Ainsworth
A new report from the ACCC has warned the gas shortage facing eastern states is now worse than what it predicted six months ago, forecasting a shortfall in supply from 2027.
In its December 2023 interim report, the ACCC said Australia was likely to have "sufficient supply" of gas throughout the transition towards renewable energy until 2028.
Now in its June interim report, released today, the ACCC said while there is enough gas supply in the short-term, shortages are possible from 2027 unless more supply comes online.
"This is earlier than our last forecast (in December 2023) of a possible shortfall from 2028, reflecting lower forecast supply due to delays in anticipated regulatory approvals for new projects and problems with legacy gas fields," the report said.
The warning from the ACCC comes after the Australian Energy Market Operator (AEMO) forecasted in March that southern states would face gas shortages from 2028.
The ACCC said that long-term solutions to address the shortages would require "a range of policy and market responses".
"Amongst these, there is an urgent need to develop new sources of gas production and supply," the report said.
"Ensuring efficient supply to the east coast market would also be supported by increased competition in upstream production."
The full report is available on the ACCC's website.
Key Event
Santos lower after Aramco labelled takeover reports 'inaccurate'
By Kate Ainsworth
After picking up 4.6% during the trade yesterday, shares in Santos have fallen by 0.8% this morning to $7.95 (as of 10:55am AEST).
Shares in the gas company had soared yesterday on reports Saudi Aramco and Abu Dhabi National Oil Company (ADNOC)had both been considering making offers for the business.
But overnight, the reports were dismissed as "inaccurate" by Aramco, which is seeing Santos's shares dipping during the first hour of trade today.
The rumoured takeover offers come after Santos and Woodside Energy scrapped talks of a merger deal back in February that would have created a global oil and gas giant worth around $80 billion.
Key Event
ASX slips in opening minutes of trade
By Kate Ainsworth
The ASX 200 has opened 0.3% lower on Friday to 7,812 points as of 10:25am AEST.
(For live figures, head to the top of the blog.)
So far only one sector is in positive territory, and even then, it's only just there: utilities is 0.1% higher.
Healthcare and consumer staples are both flat, while the remaining eight sectors are in the red.
Education and real estate are both down 0.7%, while industrials is 0.6% lower. Financials and tech have both shed 0.3%, basic materials and consumer cyclicals are 0.2% lower, and energy has dropped by 0.1%.
As for the top performers so far:
- West African Resources +4.7%
- Magellan Financial +3.8%
- Graincorp +1.5%
- Red5 +1.4%
- Flight Centre +1.2%
And at the other end of the scale:
- Seven Group Holdings -3.6%
- Boss Energy -3.6%
- Centuria Capital Group -2%
- Tabcorp -1.4%
- Credit Corp Group -1.4%
Market snapshot
By Kate Ainsworth
- ASX 200:-0.3% to 7,811 points (live figures below)
- Australian dollar:steady at 67.27 US cents
- S&P 500:+0.5% to 5,537 points (Wednesday)
- Nasdaq:+0.9% to 18,188 points (Wednesday)
- FTSE:+0.9% to 8,241 points
- EuroStoxx:+0.6% to 517 points
- Spot gold:steady at $US2,357/ounce
- Brent crude:steady at $US87.45/barrel
- Iron ore:flat at $US113.20/tonne
- Bitcoin:-2.2% to $US57,024
Prices current around 10:15am AEST.
Live updates on the major ASX indices:
Key Event
Australian dollar reaches its highest level since January 2
By Kate Ainsworth
Overnight, the Australian dollar has climbed to its highest level since January 2.
It's buying 67.3 US cents, as investors weigh up the chances of an RBA rate hike in August against the potential of a rate cut by the US Federal Reserve in September.
As NAB wrote in its morning note:
"Limited overnight price action with the US out for Independence day, though of note the AUD has held Wednesday's range break out to close in North America at its highest level since 2 January, amid further broad based USD slippage in what has been a 'risk-on' European day."
Key Event
Reports suggesting Santos offer are 'inaccurate', Aramco says
By Kate Ainsworth
Saudi Aramco says reports that it is considering making an offer for Santos are inaccurate.
Yesterday, Bloomberg News reported that Saudi Aramco was considering an offer for the Australian gas giant, as was Abu Dhabi National Oil Company (ADNOC).
But a spokesperson for Aramco has dismissed the media reports in a brief emailed statement:
"With reference to recent media reports claiming that Aramco is considering an offer for Santos, the company can confirm that such claims are inaccurate," the spokesperson said.
A spokesperson for Santos said the company doesn't comment on media speculation, and ADNOC has declined to comment.
Santos shares rose by 4.2% to $8 during trade yesterday.
Key Event
Need a refresher on what happened in the finance world yesterday?
By Kate Ainsworth
It was an eventful day in the world of finance yesterday, which kicked off with reports from Bloomberg that Saudi Aramco and Abu Dhabi National Oil company were separately eyeing up bids from Santos.
Iron ore prices also strengthened, which boosted the federal government's bottom line and saw a rise in mining company shares.
Lucky for us, Alan Kohler expertly wrapped it all up in under two minutes.
Loading...
And if you're really keen to look back on the day's events as they unfolded, you can find yesterday's blog hereπ