Aussie dollar reaches July highs as US data hints at faster fall in inflation, ASX closes lower — as it happened

By the end of the day's trading, Boss Energy ended up gaining 6.6% in value, while Neuren Pharmaceuticals gained 6.5%.

At the other end of the spectrum, Core Lithium lost 21.2% in value, while Sayona Mining lost 8.6% and Chalice Mining lost 2.92%.

Of the sectors, energy stocks led the way, followed by real estate, basic materials, and technology stocks.

But every other sector lost some value.

The ASX 200 has closed 2.5 points lower today (-0.03%) to finish on 7501.6 points.

Boss Energy is the best performing stock on the ASX today.

It's currently up 7.1%, to $4.38 a share.

The company has entered its first binding sales agreement for the supply of uranium from its Honeymoon Project in South Australia. Analysts say that's a major step in the company's future.

The company's share price is more than 108% in the last year.

Earlier today, the English men's cricket team lost game 5 of their five-match T20 series against the West Indies, in the West Indies.

It means the West Indies won the T20 series 3-2.

And that means England will fly home with their tail between their legs, having lost both the One Day International and T20 series on this tour.

Core Lithium's share price is down 22% today, and here's the reason why.

The company announced this morning that it was reviewing its operations near Darwin because of "the deterioration in lithium market conditions".

Core Lithium owns the Northern Territory's only lithium mine, but said the price of spodumene concentrate  (high-purity lithium ore) had fallen 80 per cent this year, "including by more than 40 per cent since the end of October".

Core said the falling lithium price had caused the company to consider a range of options, including "possible temporary curtailment of mining operations" and "reductions in exploration and other discretionary expenditures".

You can read more here from the ABC's Matt Brann:

The population of Brisbane is projected to overtake the population of the rest of Queensland in 2027–28, according to the 2023 Population Statement.

That will be the first time since 1978 that Greater Brisbane has had a larger population than the rest of Queensland.

It says Greater Brisbane is projected to continue attracting the highest level of internal migrants of any capital city in coming years, but net overseas migration is still expected to be the largest source of its population growth.

Brisbane’s population is projected to be 3.2 million in 2033–34.

According to the 2023 Population Statement, Melbourne is projected to be the fastest growing capital city from 2023–24.

Due to strong internal and overseas migration, it's also projected to overtake Sydney to become the largest city in Australia in 2031–32.

Here's how the market's tracking at 2pm.

There's some movement, but not much.

Here's what that looks like visually.

The government says net overseas migration (NOM) "is expected to decline back to around pre-pandemic levels over the next couple of years" once the system has adjusted to the reopening of borders and settled down to normal population movements.

It projects that NOM will average 238,420 people a year for the next decade (from 2024-25).

That compares to the decade running up to 2019-20, where NOM averaged 215,960 people a year.

In the decade before that, running up to 2008-09, NOM averaged 165,070 people a year.

 It's a Friday afternoon, a few days before Christmas.

It's not unusual, at this time of year, to get a few press releases from the government at times when most people have switched off.

We've just got another release from senator Katy Gallagher.

This time it's announcing the release of the Centre for Population’s 2023 Population Statement.

It says the statement shows Australia’s population growth has recently been supported by higher net overseas migration following the COVID-19 pandemic and the reopening of international borders.

It says net overseas migration is expected to decline back to around pre-pandemic levels over the next couple of years and population growth is forecast to decline over the medium term, as our population continues to age.

Here are its projections for population growth over the next 10 years, for natural increase (N) and net overseas migration (NOM):

• 2022-23: (N) 121,700, (NOM) 507,600
• 2023-24: (N) 133,100, (NOM) 377,400
• 2024-25: (N) 140,200, (NOM) 248,000
• 2025-26: (N) 142,200, (NOM) 257,100
• 2026-27: (N) 141,200, (NOM) 234,700
• 2027-28: (N) 139,500, (NOM) 234,800
• 2028-29: (N) 137,500, (NOM) 234,800
• 2029-30: (N) 135,300, (NOM) 234,900
• 2030-31: (N) 133,000, (NOM) 234,900
• 2031-32: (N) 130,500, (NOM) 235,000
• 2032-33: (N) 128,900, (NOM) 235,000
• 2033-34: (N) 127,200, (NOM) 235,000

Senator Katy Gallagher, the federal minister for finance, has just issued an interesting press release.

She says the Albanese government will consult on regulations to improve the integrity of the Petroleum Resource Rent Tax regime by updating it to cover new business practices, as recommended by the Gas Transfer Pricing Review.

She says the regulations will implement one component of the Government's PRRT reforms, which will mean the offshore LNG industry pays more tax, sooner.

"Under proposed regulations out for consultation today, we will update the Petroleum Resource Rent Tax Assessment Regulation 2015 to account for the new practice of ‘tolling’ in the offshore LNG sector – an emerging practice whereby companies that own LNG facilities process, transport or store gas in exchange for a ‘toll fee’.

"The changes will improve certainty by ensuring that a commercially negotiated toll fee can be used in calculating PRRT liability.

"To prevent the use of tolling arrangements in tax avoidance, the regulations we’re proposing protect the integrity of the PRRT regime by requiring companies to apply to the Commissioner of Taxation to determine an appropriate arm’s length price where a company cannot demonstrate a toll fee was negotiated fairly.

"This will prevent companies from manipulating toll fees to artificially reduce PRRT payable.

"Draft regulations for consultation and feedback are available on Treasury’s website until 9 February 2024.

"The Government will consult on draft legislation and regulations implementing the remaining elements of its response to the Gas Transfer Pricing Review in early 2024, including strengthening the PRRT anti-avoidance rules.

The NT Property Council says Darwin CBD is already in an "unenviable position" with the nation's highest vacancy rate — but they expect figures to worsen in the new year.

According to their research, 58,000 square metres of commercial office space lies vacant across the Darwin CBD with smaller retail and hospitality venues recording a vacancy rate of around 20 per cent.

Executive director Ruth Palmer said a new report examining vacancy rates in the NT capital would drop next month, which they anticipated would contain even higher figures.

You can read more on the story here:

A company owned by the developer behind a long-awaited water park and surf pool project on Queensland's Sunshine Coast has gone into administration, with the land to be put on the market early in the new year.

The $350 million project was to include a $40 million surf pool, a four-star 160-villa family resort and a water park.

Nurrowin Pty Ltd bought the 25-hectare property on Steve Irwin Way, Glenview, for $4.1 million in late 2015.

Water park plans were announced in 2016, but revised over the years.

But the Australian Securities and Investment Commission (ASIC) has confirmed that Nurrowin is under external administration, with a receiver and manager appointed.

You can read the story from the ABC's Jessica Ross below.

She says as part of the debt recovery process, a commercial real estate agent has been appointed to handle the sale of the land.

Over on LinkedIn, Australian economist Tim Harcourt has already shared a memory of Bob Solow.

My colleague Samuel Yang has been speaking to some of Australia's top equity analysts and market-focused economists to put together a preview of the year ahead.

The story won't come out until January 2 (keep an eye out for it) but I can give you a sneak peak on the analysts' currency forecasts.

All four expect the Australian dollar to pass 70 US cents next year — at the rate it's going (currently 67.98), it might even get there before Sam's story is published!

That would be its first trip above 70 since February this year.

The top forecast is an AUD at 75 US cents by the end of next year, while most see the local currency trading around 72/73 US cents.

The reason?

The US Federal Reserve is expected to start cutting interest rates, potentially hard, from March.

The Reserve Bank of Australia isn't generally expected to start cutting interest rates here until June, and then do so much more slowly.

"The Fed moving to cut should be negative for the overvalued $US particularly against the $A as the Fed is likely to cut more aggressively than the RBA," noted AMP's Shane Oliver, typical of the responses.

But, as he notes, there is plenty of room for risks on both the upside and downside for the Aussie dollar, with China's economic outlook, inflation/rates and the possibility of recession all lingering.

The New York Times is reporting that Robert Solow has died at the age of 99. Here's the first few pars of the Times article:

"Robert M. Solow, who won a Nobel in economic science in 1987 for his theory that advances in technology, rather than increases in capital and labor, have been the primary drivers of economic growth in the United States, died on Thursday at his home in Lexington, Mass. He was 99.

"His son John confirmed the death.

"Professor Solow (pronounced solo) taught at the Massachusetts Institute of Technology, where he and a fellow Nobel laureate, Paul A. Samuelson, forged the M.I.T. style of economic analysis, which emerged as a leading approach in the second half of the 20th century and played an important role in economic policymaking.

"His work demonstrated the power of bringing mathematics to bear on important economic debates and simplifying the analysis by focusing on a small number of variables at a time.

"Beyond the impact of his own research, Professor Solow helped launch the careers of a stunning number of future superstar economists, including four Nobel laureates: Peter Diamond, Joseph E. Stiglitz, William D. Nordhaus and George A. Akerlof. “My pride and joy,” Professor Solow said.

You can read the Times article here:

The US stock market has roared ahead of quiet little backwaters like the ASX of late.

But Tim Murray, capital markets strategist at US firm T. Rowe Price, argues it's not the whole of Wall Street surging, and the bit that is may be justified in doing so.

"The Magnificent 7 are viewed as a separate asset class," he wrote in an end of year note.

"In 2023, we witnessed one of the most top-heavy equity markets ever. But the reality is that US stocks are not broadly expensive. Rather, the aggregate valuation of US stocks is distorted by the high valuations of these seven "mega-caps" companies that make up nearly 30% of the S&P 500 Index.

"It is also tempting to assume that valuations of the Magnificent 7 are unreasonably high. But we can see that the high valuations that these companies hold were accompanied by a similarly high Return on equity (ROE) on a market cap-weighted basis.

"The bottom line is that the elevated valuations of the Magnificent 7 collectively, and US stocks in aggregate, are not unreasonable when taken in context. The real question is whether or not the level of profitability and efficiency that these seven companies have exhibited can be sustained moving forward."

A multi-trillion-dollar question, that one.

For more on the Magnificent 7, my colleague Rachel Pupazzoni looked at the trend earlier this year.

Given the enthusiasm on Wall Street, you'd think traders locally could stir up some pre-Christmas cheer, but no.

The ASX is flat in early trade, up just 2 points to 7,506.

With today expected to be the busiest on the roads out of the capital cities, perhaps it's just a case of local traders clocking out early for their summer holidays...?

Of the trading that is taking place, mining and energy are leading the way up, while healthcare, utilities and financials are the major drags.

Biggest gains:

• Lynas Rare Earths +5.6% to $7.18
• Boss Energy +3.8% to $4.235
• Weebit Nano +2% to $4.19
• Emerald Resources +1.9% to $2.995
• Pilbara Minerals +1.8% to $3.785 

Biggest falls:

• Core Lithium -18.2% to $0.27
• Sayona Mining -2.1% to $0.0685
• Healius -2.1% to $1.5275
• Resmed -1.6% to $25.57
• Bapcor -1.1% to $5.58