Markets live updates: ASX gains strongly, American Eagle shares surge on earnings update

The Treasurer and Reserve Bank governor have said, repeatedly, the war against inflation is not yet won.

But government cost-of-living relief and RBA interest rate cuts appear, according to a number of economists now, to be bringing some household budgets out of the red.

JPMorgan economists describe household spending now as “on track”.

“Australian household spending rose 0.5 per cent month on month in July, in line with consensus but below the J.P. Morgan (0.7 per cent forecast),” economist Tom Ryan said.

“With downward revisions to prior months, the annual rate now sits at 5.1 per cent, reflecting an ongoing rebound in demand as looser monetary policy and rising real incomes boost consumer confidence.”

Sunrise Energy Metals (SRL) has just entered a trading halt.

Shares in SRL were trading 20 per cent higher at $2.02 ahead of the pause.

The ASX trading update, published at 1:27pm AEST, states,” Trading in the securities of the entity will be temporarily paused pending a further announcement.”

Hi Phillip,

Thanks for your comment.
I believe many Australians are in the same boat as you, dying to know when we can expect another rate cut, if at all.

I attended RBA governor Michele Bullock’s speech in Perth yesterday and, to be honest, you never expect a completely clear answer on the outlook for rates from her.

However, the governor did hint that consumption was starting to rise slowly, as consumers were being less cautious.

As she said, and I quoted:

“What it means for the future of interest rates, I don’t know at this stage.

“But all I would say is that, if anything, probably it’s a little stronger than we thought it would be.

“It’s possible if it [consumption] keeps going [up], then there may not be many interest rate declines left to come.

“It all depends.”

Financial markets are pretty sure there won’t be a September rate cut, but quite certain there will be a November one.

But, after three rate cuts so far this year, the trend in thinking among most economists is certainly towards fewer rate cuts from here on — one, maybe two — rather than three or more.

There are reports Australia’s second-oldest literary journal, Meanjin, is being shut down.

The decision was made by Melbourne University Publishing on “purely financial grounds”, the organisation said in a statement to Crikey.

Reporter Emilia Terzon was all over this story this time last year.

CreditorWatch’s chief economist, Ivan Colhoun, has been looking at today’s ABS Monthly Household Spending Indicator.

Here are his thoughts:

Consumer spending looks stronger on paper, but special factors (EOFY sales, flu season, Lions Rugby Tour) are inflating July’s Household Spending Indicator (HSI) results – suggesting the true underlying trend is weaker than headline figures imply.Category shifts are notable: Health spending surged (+1.8 per cent month on month), while discretionary areas like furniture, electricals, and clothing dropped after EOFY discounting.Interest rate outlook hinges on unemployment: If unemployment climbs to 4.4 per cent or higher, the RBA is expected to accelerate two rate cuts within the next 3-6 months.

We love existential questions here on the blog.

The old model used to be: retire at 65 and then live off retirement savings or the Age Pension.

You can understand why people now think they need to live to 120 or above, and work until they’re 100, just to meet expenses!

You may have noticed the share market has rebounded today.

The benchmark S&P/ASX 200 is up 74 points or 0.85 per cent to 8,813.20.

It follows a slight reversal in the bond market overnight.

Bonds had been selling off across the globe, leading to higher yields, which is negative for shares.

The buying of bonds overnight and into Asian trade today has boosted the local share market.

Japan’s Nikkei 225 is also firmer today, but China’s main share index is in negative territory.

Westpac has chimed in on the latest official economic growth figures.

The National Accounts came in stronger than expected, with the economy growing 0.6 per cent over the June quarter, and 1.8 per cent in annual terms.

“The key takeout from the Accounts was that the consumer has finally awakened,” Westpac economist Pat Bustamante wrote.

“Consumer spending grew 0.9 per cent in the June quarter, and it was the first time in 2-year spending per person grew in annual terms.”

This is all food for thought for the Reserve Bank, of course.

The latest official spending data shows household budgets are looking slightly better.

Household spending rose 0.5 per cent in July, according to seasonally adjusted figures released today by the Australian Bureau of Statistics (ABS).

It follows rises of 0.3 per cent in June and 1.0 per cent in May.

“Household spending rose for the third month in a row in July and has now gone up nine times in the last 10 months,” ABS head of business statistics, Robert Ewing, said.

“Household spending is 5.1 per cent higher than the same time last year.

“This is the highest annual growth since November 2023.”

Hi Everyone,

Michael Janda and the team have done a terrific job keeping you updated this morning.

I’m on now!

This is one of my favourite roles here at the ABC.

I hope you can join me on the blog ride this afternoon.

Send me questions or comment away to your heart’s content.

Let’s go!

I am handing over the baton to the very able David Taylor to take you through the afternoon’s market action.

I am sure I’ll be seeing you on the blog again soon.

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Yes, I was surprised too, but not totally shocked given how much home prices have surged in Adelaide since COVID.

It reminds me of a conversation I had with Gerard Minack earlier in the year, as part of my Housing Hostages podcast series for ABC News Daily, when he pointed out that not only did Sydney have Manhattan-style prices, but so did Wollongong and Newcastle … even Adelaide.

The really surprising thing in this new report from REA Group and the Commonwealth Bank is that there are still more home buyers breaking into the market than during most of the 2010s.

A surging population has pushed those numbers up, but it seems many are still finding a way to break in — through government schemes, family assistance or “rentvesting”.

My colleague Yiying Li has the story.

Software company Xero was the biggest loser on the ASX on Wednesday, as the company announced it was expanding its Jax AI agent within its software.

Chief executive Sukhinder Singh Cassidy joined The Business to discuss how artificial intelligence is impacting the company and its clients.

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Xero shares have bounced back today, jumping 4.1% to $155.95, although they are 7.5% down so far this year.

More post-GDP analysis, this time from Bendigo Bank chief economist David Robertson.

He says higher inflation and resilient GDP has confirmed little chance of a September cash rate cut.

“After the August RBA cash rate cut, we’re not expecting a back-to-back cut in September — especially after a higher read for inflation in the latest monthly indicator for July.”

All eyes will now be on the quarterly inflation data — released late next month — to see just how long homeowners will need to wait until they can breathe another sigh of relief.

“The Reserve Bank wouldn’t have been surprised by the rise in CPI in the monthly numbers due to electricity rebates and other one-off factors, but core inflation was a little higher, so the RBA will want to see the full third quarter data out on October 29 before cutting again.

“Our next RBA rate cut is still forecast in November, but we are getting closer to the low in the easing cycle, so jobs data and export demand will be important in this timing, and whether the RBA needs to keep cutting rates next year.”

I know lots of people went “phew” when the RBA made the first of three cuts to the official cash rate, but I maintain that the lag — and the broad inflation in non-discretionary costs (food, fuel, housing) — mean that households are still stuck in #cossielivs hell for a bit longer.

Yesterday’s household savings data backs that up.

While there’s been a lot of heat about the appearance of former Victorian premier Daniel Andrews at China’s military celebrations, something else is worth noting.

With Russia and China working as allies and having huge sway in the world economy, both leaders have no intention of dying, at least not soon.

Reuters reports that when Russian President Vladimir Putin walked shoulder to shoulder with Chinese President Xi Jinping on Wednesday, a hot mic caught them discussing organ transplants and the possibility that humans could live to 150 years old.

The moment came as Putin and Xi walked with North Korea’s Kim Jong Un at the head of a delegation of more than two dozen foreign leaders to view a military parade in Beijing, marking the 80th anniversary of the end of World War II.

As Putin and Xi walked toward the Tiananmen rostrum where they viewed the parade with Kim, Putin’s translator could be heard saying in Chinese:

“Biotechnology is continuously developing.

“Human organs can be continuously transplanted. The longer you live, the younger you become, and (you can) even achieve immortality.”

In response, Xi, who was off camera, can be heard responding in Chinese:

“Some predict that in this century humans may live to 150 years old.”

Kim was smiling and looking in the direction of Putin and Xi, but it was not clear if the conversation was being translated for him. Putin cannot be heard speaking clearly in Russian in the CCTV clip. Putin confirmed later that he and Xi had discussed the subject on Wednesday.

“I think when we went to the parade, the chairman talked about it,” Putin told reporters in Beijing when asked about the leaked conversation.

“Modern means of health improvement, medical means, even surgical ones related to organ replacement, they allow humanity to hope that active life will continue differently than it does today.”

Australian traders have had no hesitation in following their global counterparts, with the ASX 200 rising 0.7% in early trade to 8,804 points.

Futures trading had hinted at a more modest rise for the benchmark index.

Every sector except energy was up (oil prices fell fairly steeply overnight), with financials leading the gains.

The big banks were up between 1 to 1.7% in the first 10 minutes of trade.

Three-quarters of the top 200 companies were trading higher shortly after the market opened.

Aside from energy, building materials companies with exposure to the US, such as Reece and James Hardie, also fell on signs America’s economy is cooling.

The Australian dollar is holding on to recent gains against a weaker Greenback, at 65.47 US cents.

US fashion brand American Eagle has seen its shares surge more than 20% in after-hours trading after well-received second quarter profit results and a positive sales update.

While second quarter sales stagnated, earnings per share jumped, and the firm’s chief executive, Jay Schottenstein, gave an upbeat outlook.

“The fall season is off to a positive start,” he said in a press release.

“Fueled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce, we have seen an uptick in customer awareness, engagement and comparable sales.”

American Eagle received a huge volume of free publicity when US President Donald Trump weighed into a debate over whether the company’s latest ad campaign featuring the slogan “Sydney Sweeney has great jeans” played on eugenic themes (see the ABC News explainer via the link at the bottom of this post).

Lale Akoner, global market analyst at eToro, says the company has shown the attention garnered by the ad campaign is translating at the till.

“American Eagle Q2 results eased concerns around execution and proved marketing momentum is translating into sales, driving a sharp stock re-rating,” she notes.

“Shares jumped 20% after internet traffic gains, disciplined promotions, and stronger margins drove operating income growth, while Aerie hit record sales and AE denim regained traction.

“Crucially, celebrity campaigns with Sydney Sweeney and Travis Kelce generated ~700k new customers, 40b impressions, and record Labor Day sales, validating the brand reset strategy.

“The near-term debate shifts to durability; can momentum in denim and Aerie offset the ~$70m in tariff headwinds and increased ad spend in 2H? With management guiding sales to grow low single digits and emphasized margin stability, execution into the key Q4 holiday season will be key to sustaining investor confidence.”

Tens of thousands of documents related to the investigation into convicted sex offender Jeffrey Epstein and his death in prison have been released by a US House of Representatives committee.

Footage of police searches inside Epstein’s home, witness and victim interview tapes, and flight logs were among the swathes of files posted on Google Drive.

Still, most of the files contain information already publicly known or available. And it was also only a tiny fraction of the files the US Department of Justice is believed to hold.

The ABC’s Elissa Steedman takes a look at what we now know, and what we still don’t know, from the Epstein files.

A pretty important update from consumer group Choice about five cots it has found for sale in Australia, mostly through big-name online marketplaces such as eBay and Baby Bunting Marketplace, which fail safety standards.

“In our latest testing, we unfortunately found many cots from online retailers weren’t adhering to basic safety standards,” said Choice household expert, Chris Barnes.

“Some cots had limb entrapment or strangulation hazards, others had no safety warnings, or were missing information on recommended mattress sizes — leaving babies and toddlers at risk.”

Choice noted that Australia is moving towards a new mandatory standard for cot safety, coming into effect in January 2026.

It said, in the meantime, its experts test each cot against key safety clauses from existing voluntary and mandatory safety standards.