Market Wrap: Markets take election result in their stride amid hawkish rate rises

After falling for seven straight weeks, US stockmarkets lifted despite a profit warning from social media company Snap that triggered a 44 per cent plunge in its share price.

Gains also for the ASX200, supported by a rebound on Wall Street and prospects of more stimulus in China to combat the impact of ongoing COVID lockdowns.

Here are the top five things that happened in markets this week:

1. Anthony Albanese becomes Australia’s 31st PM

After winning the federal election, Anthony Albanese was sworn in as Australia’s 31st Prime Minister on Monday, promising action on climate change, greater gender equality and improved wage growth.

Markets have taken the change of government in their stride.

2. Kiwi flies after hawkish RBNZ rate rise

The Reserve Bank of New Zealand raised the official cash rate by 50 basis points to 2 per cent, a follow up to its 50 basis point rate hike in April.

While this was widely expected, the hawkish surprise came as the RBNZ revised its terminal rate to 3.9 per cent in June 2023 from its earlier 3.35 per cent forecast.

3. FOMC meeting minutes hawkish

The minutes from the Federal Reserve’s May meeting indicated a broad consensus for 50 basis point rate hikes at the June and July meetings and conveyed few concerns about downside risks to growth.

4. Natural gas steams higher

Natural gas closed at its highest price since 2008, as the war in Ukraine continues to cause chaos for energy markets.

Natural gas provides about 20 per cent of Australia’s energy sources, and Australia is the world’s fifth-biggest natural gas exporter.

5. ASX200-listed AI  company Appen soars by 30 per cent

Artificial intelligence data services company Appen soared 30 per cent after becoming the target of a $1.2 billion unsolicited takeover proposal from Telus International.

Before the bid, Appen had fallen 43 per cent year to date.

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Topics: Finance
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