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- The benchmark index ASX 200 was down just 2.10 points at 6,610.50 in the initial few minutes of trading on Tuesday (5 July).
- RBA is broadly expected to announce another 50 basis points hike in cash rate to 1.35% in its policy meet today.
- Six of 11 sectors traded higher today, with energy being the best performing sector.
Aussie stocks opened on a flat note on Tuesday (5 July) as investors awaited Reserve Bank of Australia's (RBA) interest rate decision, due later in the day. The benchmark index ASX 200 opened flat and was down just 2.10 points at 6,610.50 in the initial few minutes of trading. Markets lacked direction in the absence of sufficient cues from the global markets as Wall Street indices were closed on Monday for a public holiday. The ASX 200 closed 1.11% higher at 6,612.60 points on Monday.
There is a broad consensus in the market that RBA will go for another 50 basis points (bps) hike in cash rate to 1.35% today. It is worth mentioning that in May this year, the RBA increased rates for the first time after almost a decade, followed by another rate hike in June.
Meanwhile, the US stocks will start this week's trading today (Tuesday) as the market remained closed because of the Independence Day holiday on Monday. US futures slipped in overnight trading on Monday. The Dow Jones futures dropped 0.3%, while the S&P 500 futures fell 0.4%, and the NASDAQ futures shed 0.5%.
It is worth mentioning that investors are keenly waiting for the US jobs report, which will be out this week, to get clues on how inflation and increasing borrowing costs are impacting the labor market. This is important at a time when factories worldwide are reporting declining demand for products. The inflation and recession fears resulted in a bruising first half of this year. Since World War 2, the US economy has seen almost 12 recessions, characterised by contraction in economic output and a rise in unemployment numbers. This year, some believe that the US economy is on the brink of recession, while others believe that the country's economy is already in a recession. For those contemplating that the downturn has already begun, there is surprisingly an unusual thing to notice. This is because away from the normal trend, though the economic output declined during the first quarter and there were indications that it did again in the second quarter, there was an improvement in the job market.
Amidst this, there are indications that the Federal Reserve will go for further another 50-75 basis points hike in interest rate in its next meeting to cool down inflation.
Bubs Australia Limited (ASX:BUB):
The shares of ASX-listed Baby formula business Bubs Australia Limited remained on investors' radar on Tuesday (5 July) after the company announced an underwritten capital raise of AU$63 million new fully paid ordinary shares at an offer price of $0.52 per new share. The equity raising is likely to help Bubs support growth initiatives and execute on long-term strategic goals.
Champion Iron Limited (ASX:CIA):
The share price of Champion Iron Limited grabbed investors' attention on Tuesday after the company announced the appointment of Donald Tremblay as its chief financial officer (CFO). As per the announcement, the appointment is effective 12 September 2022.
Coming to the top ASX 200 gainers, Regis Resources Limited (ASX:RRL), Life360 (ASX:360) and Magellan Financial Group Limited (ASX:MFG) led the pack with 6.551%, 6.185%, and 4.013% gains, respectively. On the flip side, Unibail-Rodamco-Westfield (ASX:URW), and Chorus Ltd. (ASX:CNU) were the biggest losers, falling 3.958% and 2.425%, respectively.
Six of 11 sectors traded higher today. Energy was the best performing sector, up 0.89% in the early morning trade as crude oil rallied overnight. The information technology and materials sectors were up 0.82% and 0.54% at the time of writing. Consumer staples and financials were the worst performers, down 0.90% and 0.53%, respectively.
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