Live updates: China’s economy beats expectations with 5.4pc rise, ASX turns negative

Is it the weather Natty, or is it just the flurry of traders hustling now there’s less than an hour left before the market shuts for the week?

I jest — stay safe Sydneysiders! If it’s any consolation, the Brisvegas sky is getting darker by the minute 😬

That’s a fair point you make Phillip, and a timely reminder that getting proper financial advice from a licensed professional can help answer your questions and make you aware of other elements to take into consideration.

And while we’re at it — a reminder that this comment (and blog in general) is not intended as financial or investment advice.

The broader ASX 200 might be a touch flat this afternoon, but that’s not the case for local mining stocks.

Miners have risen by as much as 0.7% today — the highest level in a month — and is 0.3% higher as of 2:20pm AEDT.

It also means mining stocks are on track for their fourth-straight day of gains.

The reason for the boost is all thanks to iron ore prices also hitting a four-week high.

BHP and Fortescue had gained as much as 0.6% and 1.9% respectively, but are now sitting at 0.1% and 1% as we head into the final hours of trade.

But not every miner (even those in the iron ore business) is reaping the rewards.

Rio Tinto is still trading lower this afternoon, but has recovered after dropping as much as 1.8% in early trade off the back of Reuters reporting that the miner held merger talks with Glencore last year, but the discussions are no longer active.

Currently, Rio Tinto is down 0.5%, trading at $119.04 a share.

That’s the question on many people’s minds. For more on the implications on this week’s jobs report for interest rates, see David Chau’s Finance Report:

(and catch up on the unemployment data in my report from last night too):

Indeed, that is another popular way for young people to save for a house… though there are benefits and trade offs as you say…

A quick check in on some of the market reaction to the news that China’s economy beat forecasts at the end of last year.

There’s a mixed performance around the region — the Shanghai composite is up 0.1 per cent, as is Hong Kong’s Hang Seng. China’s blue chip CSI 100 index is up 0.3 per cent.

However, Japanese stocks are under pressure with the Tokyo’s Nikkei down 1 per cent.

Locally, the ASX 200 is just above the flatline, while the Aussie dollar moved slightly higher on the news but has steadied around 62.1 US cents now.

We’ve just had a slew of economic data released from China, including economic growth figures for the final quarter of 2024.

China’s economy grew 5.4 per cent annually in the fourth quarter, picking up from 4.6 per cent in the previous quarter and beating market expectations.

According to the government data, that puts growth for the full 2024 year at 5 per cent, meeting its annual growth target.

The last few months of 2024 witnessed a raft of stimulus measures unleashed in an effort to steady China’s economy.

Industrial production and retail sales for December also beat forecasts.

Even though Reuters is reporting, based on sources, that the talks didn’t go anywhere and are now over, RBC analyst Kaan Peker says the market was still caught off-guard that any potential merger talks between the mining giants happened at all.

“Despite Glencore once approaching Rio Tinto’s key shareholder Chinalco in July 2014 for a potential merger, it still comes as a surprise,” he writes.

“Rio Tinto has since divested coal, while Glencore has added assets through buying out its JV partners of Cerrejon and acquiring Teck’s coking coal assets.

“The approach of BHP to Anglo American last year may well have catalysed talks between the two.“

Peker sees two benefits and two downsides for Rio from a deal with Glencore.

It would gain additional copper exposure and reduce its dependence on iron ore for revenues — especially good with China’s economy in structural slowdown.

However, it would be lumbered with coal assets again having managed to divest its previous ones in 2018 to progress decarbonisation.

Also, Rio’s assets are seen as higher quality on average than Glencore’s.

For Glencore, which also has a large commodities marketing division, there could be up to a billion dollars in synergies from also selling Rio’s commodities, although Rio already has its own substantial trading division in Singapore.

A deal would also provide a way for Ivan Glasenberg to reduce his holding in the company, currently sitting at nearly 10% of Glencore shares.

Our former colleague Rachel Pupazzoni had this on BHP’s failed attempts to buy out Anglo American last year. (Rachel now works for Rio Tinto.)

The Australian share market is faring a little better early this afternoon in a mostly quiet session, with the All Ordinaries up 0.15% to 8582 and the ASX 200 up 0.13% to 8338 at around 13:30pm AEDT.

The Australian dollar is flat at 62.08 US cents.

Here are the top and bottom movers on the ASX 200:

Speaking of gold (retrievers and mines), a note from UBS just now says it’s good times ahead for Australian gold miners, with gold at an all time high.

“We expect gold to extend its rally despite higher real US rates as safe haven / diversification buying continues on global geopolitical risks and consumer demand remains resilient.”

“We retain our forecast for US$2,900/oz by mid year, which equates to ~A$4,500/oz or even higher if the weak A$ prevails.”

“Given we envisage few production/cost issues, strong cash generation should to continue to support equity prices. With limited organic growth options for some companies, we might see increased focus on shareholder returns or more inorganic moves.”

However in the note UBS analysts downgraded gold producer Genesis Minerals to Neutral.

You should go and give him a cuddle on behalf of me and the ABC Business team

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Hi Peter,

I take your general point about polls, especially if the sample size is less than a thousand (as opposed to say the ABS Labour Force survey, which interviews tens of thousands of people a month).

However, given 1,000 is around the minimum benchmark for statistically significant results, the UBS survey meets that.

UBS Evidence Lab is part of the investment bank’s advice delivered to paying clients.

Indeed, the information that our reporting is based on today is not from a press release, it is directly from a note that UBS strategist Richard Schellbach sent to clients on January 15.

We got the note late yesterday, after those paying clients had time to take whatever action on it they saw fit for their portfolios (this is usually how investment banks distribute info to the press).

UBS has far more incentive to publish accurate and useful research for its high-wealth and fund manager clients than to generate sensational media headlines (it is not a ‘retail bank’ for the general public).

So, as with the UBS ‘liar loans’ research, I wouldn’t call this meaningless.

And, as with that liar loans research, neither the ABS nor the banking regulator APRA collect data on this issue and the major banks (if they have data on this at all) are not in the habit of sharing it.

Given that information vacuum, this is some of the only data we’ve got on this trend and therefore worth reporting.

• ASX 200: -0.02%
• Australian dollar: -0.1% to 62.08 US cents
• Wall Street: Dow -0.2% S&P -0.2 Nasdaq -0.9%
• Europe: Dax +0.4% FTSE +1.1%
• Spot gold: +0.1% at $US2,715/ounce
• Brent crude: -1% to US$81.25
• Iron ore: +2.2% to $US102.80 a tonne
• Bitcoin: +0.01% to $US100,149

Prices current around 12pm AEDT.

Live updates on the major ASX indices:

That’s a very good point Michael. Always best to proceed with caution, especially when we’re talking about hundreds of thousands of dollars, like in many of these cases

Westpac’s chief economist Luci Ellis has put out her regular Friday note, this time focused on the Australian dollar’s weakness.

First off, she points out that a dollar currently sitting around 62 US cents is not historically unique.

“We have, of course, seen these periods of ‘American exceptionalism’ — and a weak Australian dollar — before,” she observes.

“The period around 2000 is a case in point. Back then, both the exchange rate against the US dollar and the TWI were around the 50 mark — much lower than even current levels.”

Like now, optimism about the US tech sector back then was driving strength in the greenback.

However, unlike now, Australia’s productivity was growing strongly and our export sector (clearly unforeseen by currency traders at the time) was about to take off, mainly thanks to the rapid rise in China’s economy.

Ellis says things are a bit different this time around, with productivity growth weak and iron ore, coal, LNG and education exports all likely to be near, at or past their peaks.

“Australia’s top four exports are therefore all more or less capped in volumes terms,” she cautions.

“There is no crisis here: the run of large trade surpluses Australia recorded in recent years were historically unusual, and partly driven by the effects of the pandemic and Russia’s invasion of Ukraine on iron ore and energy prices.

“That said, it does mean that future growth in export volumes is mostly going to have to come from somewhere other than the current top four exports.

“Australia is going to need to pivot. The good news is that history shows that it can, and the behaviour of the exchange rate will help it navigate that period of change.”

Business as usual is not going to cut the mustard if we want to keep growing our living standards as a nation.

Hello, Nadia Daly here to take you through the afternoon’s business news. Any questions, comments, send them though

We expect to see some monthly data from China today. They’re expected to show an improvement in economic activity, with GDP to rise to the government’s 5% target. Kyle Rodda, senior financial market analyst at capital.com said:

“The markets will simply be looking for any green shoots to suggest growth is improving and economic stimulus plied last year is starting to have effect.”

The major Australian share indices are trading almost flat in early trade.

The All Ords is down 2 points to 8,567 points, while the ASX 200 is off just 3 points to 8,334.

That’s losses of around 0.02-0.04%.

We are under no illusions that many people simply can’t afford to help their children buy property or pay off mortgages, despite them wanting to help them get ahead in life.

Have you gifted cash to a loved one to help them get into the property market or … keep them from defaulting on their loan?

Or are you feeling dismayed that you can’t help your children or that your family isn’t one of the lucky ones that can?

Send me an email on terzon.emilia@abc.net.au

GC, you’d be amazed how opaque this area of lending and gifting is with very little data for journalists!