Market Wrap-Up: Afterpay's Block Surges, Qantas Identifies App Glitch Cause

The Australian share market wrapped up the week on a positive note, with the ASX 200 finishing 0.6% higher, closing at 7,629 points by the end of trade and marking a 0.7% gain for the week. All sectors ended in the green, with consumer discretionary leading the charge, up 2.2% for the day and 2.3% for the week.

Block, the owner of Afterpay, stole the spotlight with a significant surge following its profit results, driving the market momentum. Meanwhile, Qantas made headlines earlier in the week as it pinpointed the cause behind its app glitch issue, which exposed customer data to other travelers.

For a comprehensive review of today's financial news and insights, check out our blog where our specialist business reporters covered it all as it happened. Remember, while we provide updates, this blog is not intended as investment advice.

Thanks to all our readers for joining us throughout the week. We'll be back on Monday with more updates, including the RBA's interest rates decision and the latest Statement on Monetary Policy. In the meantime, catch up on today's developments below or via the ABC News app. Don't forget to tune in to Close of Business on ABC News Channel tonight at 9:30 pm AEST, or stream it anytime on ABC iview for a recap of the week.

Stay tuned for more insights and analysis next week!

ASX 200: +0.6% at 7,629 points (0.7% gain for the week)Consumer Discretionary Sector: +2.2%Real Estate: +1.8%Technology: +1.4%Communications: +0.7%Energy: +0.7%Healthcare, Utilities, Consumer Staples: +0.5% eachIndustrials: +0.4%Financials: +0.3%Materials: +0.2%Top Performers:

Block (Afterpay Owner): +10%Wesfarmers: +2.8%While the market saw notable gains, some stocks experienced declines. Stay informed for a balanced perspective on market movements.

Economic Insights: RBA Rate Hike Predictions and Commodities Outlook

Warren Hogan, chief economic advisor at Judo Bank, has been stirring discussion with his forecast of not one, not two, but three rate hikes from the RBA this year. If his predictions hold true, the cash rate could soar to 5.1% by year-end, a considerable jump from its current 4.35%. In an upcoming interview on Close of Business tonight, Hogan delves into the rationale behind his views, emphasizing the necessity for the RBA to continue raising rates.

The RBA must adjust the interest rate to ensure the overall economy is positioned to tackle inflation and alleviate the cost of living crisis," Hogan explains. "Based on my models and analysis, it appears the RBA may fall short at 4.35%, risking incomplete resolution of the economic challenges. We need slightly higher rates for full confidence in inflation reduction." However, Hogan remains open to the possibility of being proven wrong.

Meanwhile, NAB's outlook for commodities prices paints a grim picture with significant implications for the federal budget. Gerard Burg, senior economist at NAB, highlights the volatile nature of recent commodity price trends, particularly the sharp declines in steel-making commodities like iron ore, leading to an estimated -6.8% quarterly decline in the non-rural Commodity Price Index.

Global economic outlook remains subdued, especially for China, the largest consumer of commodities," Burg notes. "Soft domestic consumption and escalating trade tensions further dampen growth prospects." Despite upward revisions for base metals and gold, NAB projects a substantial average decline of 12.6% in the commodity index for 2024.

Economists warn that these trends, coupled with rising unemployment, pose significant threats to government revenue and the budget bottom line. As the situation unfolds, monitoring central bank policies and commodity market dynamics becomes paramount for informed economic decisions.

Update on NAB Services and Housing Crisis: Challenges and Solutions

Following an earlier disruption to some online services, NAB reports that certain systems are now operational. However, issues persist with its desktop internet banking service, particularly affecting outbound fast payments. The bank assures customers that efforts are underway to resolve the matter swiftly.

Meanwhile, analysts and property developers are sounding the alarm on Australia's housing situation, predicting a worsening scenario before any signs of improvement emerge. Rick Graf, Development Director at Billbergia, underscores the glaring housing shortage in Australia, asserting the urgent need for increased housing supply to address affordability concerns.

We're falling short of meeting housing demand, which should ideally see 240,000 to 250,000 new homes built annually," explains AMP Deputy Chief Economist Diana Mousina. Despite government initiatives like the $10 billion Housing Australia Future Fund and a target of 1.2 million homes over five years, an independent report from the National Housing Supply and Affordability Council warns of missing targets unless all promises are fulfilled.

Council chair Susan Lloyd-Hurwitz highlights a current shortfall of 40,000 homes, exacerbating existing undersupply issues. Economist Diana Mousina echoes the sentiment, projecting continued strain on renters and first-time buyers, with rents soaring at an alarming 8% annually.

As Treasurer Jim Chalmers announces over $25 billion committed to new housing initiatives in the upcoming budget, the question remains: what additional measures can be implemented to enhance housing affordability? With challenges persisting and demand outpacing supply, innovative solutions become imperative for a sustainable housing future.

Insights on Housing Challenges and Qantas App Update

Amid discussions on Australia's housing crisis, property developer Rick Graf emphasizes the need for expedited planning processes at the state level. Graf, a prominent figure in senate committees on housing in Canberra, criticizes the sluggish planning system in NSW, advocating for substantial reforms to address housing supply shortages effectively.

In a recent development, Qantas has issued an update to its frequent flyer members regarding Wednesday's app glitch incident. The airline assures customers that the Qantas App is now stable and functioning normally after identifying the root cause as a technology issue, dispelling concerns of a cyber incident. The incident, attributed to a caching issue, led to incorrect information being displayed on passengers' apps. Qantas reassures customers of its commitment to data security and vows to prevent similar incidents in the future.

Meanwhile, NAB acknowledges ongoing issues with its systems, including online banking and the mobile app, without disclosing the cause. The bank is actively working to resolve these disruptions.

As the ASX200 records a 0.6% increase to 7,636 points in the final afternoon session of the week, positive market sentiment prevails. Real estate emerges as the top-performing sector (+1.9%), followed by consumer discretionary (+1.6%), technology (+1.4%), and energy (+1%). Stay tuned for further updates and analysis.

Market Update and Financial Insights

The ASX continues its upward trajectory with various sectors posting modest gains. Communications (+0.7%), consumer staples (+0.6%), and healthcare (+0.5%) show steady increases, while utilities and industrials both notch a 0.3% rise. Financials and materials follow suit, each climbing 0.2%.

In the realm of individual stocks, Afterpay owner Block steals the spotlight, witnessing an impressive 10% surge in its share price during trading. This surge follows Block's latest quarterly update, revealing a remarkable 22% year-on-year increase in gross profit to $US2.09 billion. Notably, Block's Cash App generated a gross profit of $US1.26 billion, with Square's profit rising by 19% to $US820 million, surpassing expectations. Block's adjusted EBITDA stands at $US705 million, marking a substantial 91% increase from the previous year.

Here's a glance at the top five performers:

Block (Afterpay Owner): +10% And the bottom five performers:

Shifting gears, recent discussions surrounding Macquarie's transition to a cashless system have drawn attention. While some may find the notion alarming, it's important to note that Macquarie Bank's shift towards digital payments was announced in September last year, with the implementation beginning this month. The move is driven by the bank's predominantly digital customer base, with less than 1% utilizing physical payment methods. This shift aligns with Macquarie's identity as a 'digital bank,' with minimal physical branch presence.

Finally, the OECD's cautionary message urging the federal government to curtail spending on the National Disability Insurance Scheme (NDIS) sparks controversy, drawing a sharp response from Minister Bill Shorten. Stay tuned for further updates and analysis.

Market Update and Financial Insights

The ASX continues its upward trajectory with various sectors posting modest gains. Communications (+0.7%), consumer staples (+0.6%), and healthcare (+0.5%) show steady increases, while utilities and industrials both notch a 0.3% rise. Financials and materials follow suit, each climbing 0.2%.

In the realm of individual stocks, Afterpay owner Block steals the spotlight, witnessing an impressive 10% surge in its share price during trading. This surge follows Block's latest quarterly update, revealing a remarkable 22% year-on-year increase in gross profit to $US2.09 billion. Notably, Block's Cash App generated a gross profit of $US1.26 billion, with Square's profit rising by 19% to $US820 million, surpassing expectations. Block's adjusted EBITDA stands at $US705 million, marking a substantial 91% increase from the previous year.

Here's a glance at the top five performers:

Block (Afterpay Owner): +10% And the bottom five performers:

Shifting gears, recent discussions surrounding Macquarie's transition to a cashless system have drawn attention. While some may find the notion alarming, it's important to note that Macquarie Bank's shift towards digital payments was announced in September last year, with the implementation beginning this month. The move is driven by the bank's predominantly digital customer base, with less than 1% utilizing physical payment methods. This shift aligns with Macquarie's identity as a 'digital bank,' with minimal physical branch presence.

Finally, the OECD's cautionary message urging the federal government to curtail spending on the National Disability Insurance Scheme (NDIS) sparks controversy, drawing a sharp response from Minister Bill Shorten. Stay tuned for further updates and analysis.

Investor Sentiment and Market Insights

Michael Janda provides a thought-provoking analysis on the rationale behind the recent pause in momentum for the 'Magnificent 7' companies. He emphasizes the impact of inflation and interest rates on future earnings, highlighting how uncertainty regarding these factors can influence investor valuation. Janda's analogy underscores the significance of real purchasing power over time, regardless of projected future profits.

Acknowledging an earlier error in the market snapshot, Janda rectifies discrepancies arising from outdated data, ensuring accurate reporting. Despite the Australian share market's attempt to mirror US gains, the ASX 200 trails slightly behind, recording a 0.4% uptick in early trade. Notable sectoral surges include a 3.1% spike in industrials, buoyed by positive sentiment on interest rate prospects. However, gains are tempered by Macquarie Group's decline, offsetting gains for retail banks.

In response to Macquarie's full-year profit announcement, Saxo Asia-Pacific senior sales trader Junvum Kim offers a succinct assessment, noting a subdued performance marked by revenue and earnings regression compared to previous periods. Despite a notable increase in net profit in the latter half, Kim suggests it failed to significantly bolster overall results.

As market dynamics evolve, investors navigate uncertainties while assessing company performances and broader economic indicators. Stay tuned for further analysis and updates as the day progresses.

Challenges Persist for Macquarie Amid Profit Slide

Michael Janda provides insights into Macquarie's financial performance, noting a significant decline in full-year net profit, down 32% from the previous financial year to $3.5 billion. The investment bank attributes this downturn to persistent macroeconomic instability, particularly impacting its commodities arm, which witnessed a steep 47% dive in profit contributions compared to the previous year.

Despite the decline, Macquarie CEO Shemara Wickramanayake emphasizes the company's resilience amid ongoing economic uncertainty, highlighting its 55th consecutive year of profitability. However, Wickramanayake's cautious tone suggests a tempered outlook, with no expectation for an immediate rebound. She remains optimistic about Macquarie's medium-term prospects, citing strengths in major markets with structural growth tailwinds.

Nevertheless, market sentiment appears restless, evidenced by a 1.5% drop in Macquarie's share price to $185.25 at the open. Amidst broader economic concerns, warnings of prolonged higher interest rates from the US Federal Reserve and calls for fiscal restraint from the OECD further contribute to market jitters.

As uncertainties persist, investors brace for potential headwinds while closely monitoring market developments and policy shifts. Stay tuned for ongoing analysis and updates as the situation evolves.

Rate Cut Bets Rise as Fed Comments Impact Markets

NAB market economist Tapas Strickland highlights the significant market response following comments from the US Federal Reserve downplaying the likelihood of another rate hike. Strickland notes a notable increase in rate cut pricing, with bets for a rate cut in 2024 now standing at 40 basis points, compared to 35 basis points earlier in the week and 28 basis points on Tuesday.

The impact was evident across various asset classes, with yields witnessing a decline. The US 10-year yield dropped by 4.7 basis points to 4.58%, while the 2-year yield fell by 7.7 basis points to 4.88%. Additionally, the USD experienced a decline alongside falling yields.

Amidst this market sentiment shift, share markets saw an uptick, reflecting investor optimism in response to the evolving interest rate outlook.

As market dynamics continue to unfold, investors remain vigilant, closely monitoring central bank communications and their implications on asset valuations and market sentiment.

In conclusion, the recent commentary from the US Federal Reserve has sparked notable movements across financial markets. With increased bets on a rate cut for 2024 and corresponding shifts in yields and currency valuations, investor sentiment has been notably influenced. The rise in share markets reflects the broader optimism stemming from these developments. As market participants navigate evolving central bank policies and economic indicators, vigilance and adaptability remain essential in navigating the ever-changing landscape of global finance.