ASX closes 0.7% lower; RBA rethinks inflation outlook

ASX falls despite dovish RBA, energy, mining lower, OZ Minerals upgrades
 
The S&P/ASX200 (ASX: XJO) fell another 0.7 per cent despite strong comments from the Reserve Bank of Australia Governor who confirmed interest rates would be doing nowhere until at least 2024.
 
Every sector barring technology finished lower, which gained 0.2 per cent during the session.
 
Once again, the materials and energy sectors were weaker as politicians call for the US to begin consuming stockpiles.
 
BHP (ASX: BHP) fell 2.6 per cent and Rio Tinto (ASX: RIO) 2.2 per cent, with Santos (ASX: STO) also falling 0.9 per cent.
 
The weakness came despite RBA Governor Philip Lowe delivering what was described as a ‘dovish’ speech on the economy, referring to the fact that he does not anticipate raising interest rates anytime soon.
 
During the speech he noted that Job Keeper may well have saved Australia from the Great Resignation in the US which is seeing a jump in wages, whilst noting that every major central bank expects inflation to fall in 2022 following 2021’s supply issues.
 
The economy would need to turn over very differently from their central case to warrant an increase in the cash rate before 2024 he said, something that traders are betting against on a daily basis. 
 
OZ upgrades production, Capitol Health rises, Resimac loans surge
 
Copper and gold miner OZ Minerals fell 0.7 per cent on broader mining sector weakness despite announcing an increase in their finite reserves.
 
The group increased its copper reserve estimates by another 5 per cent to 10.3 million tonnes, with the company having seen an electric vehicle driven tailwind in 2021.
 
Medical imaging provider Capitol Health (ASX: CAJ) was among the market leaders jumping over 7 per cent after announcing they would be targeting a significant improvement in margins in 2022 and would pursue accretive bolt on acquisitions in the sector.
 
Revenue increased 9.7 per cent to October 31 compared to 2020 levels and the company delivered $25 million in free cash flow.
 
Non-bank lender Resimac (ASX: RMC) fell 2 per cent despite reporting record home loan growth which were 72 per cent higher during the quarter, reaching $2.5 billion.
 
The loan book is growing at a 15 per cent clip and recently exceeded $14.5 billion. Management expects profit to remain steady on 2020 levels should financial markets remain ‘stable’.
 
Cannabis product producer Creso Pharma (ASX: CPH) has entered a trading halt amid news that the Chairman’s company has been hit with an investigation by ASIC.
 
US markets bounce back, crypto rally slows, Walmart, Home Depot report
 
US share markets were broadly higher after the release of a better-than-expected retail sales result which saw growth of 1.7 per cent in October.
 
However, analysts are suggesting a significant portion was due to higher prices and the bring forward of some Christmas spending.
 
Despite this shares in home improvement group Home Depot (NYSE: HD) gained over 5 per cent after reporting same store sales growth of 5.5 per cent in its global stores and 9 per cent revenue growth.
 
Cost of sales increased by nearly 10 per cent, sending margins lower but shareholders were clearly impressed.
 
Big box retailer Walmart (NYSE: WMT) fell by over 2 per cent after reporting a similar level of improvement, with revenue up 9.8 per cent.
 
The Dow Jones underperformed, gaining 0.2 per cent, with the S&P500 and Nasdaq up 0.4 and 0.8 per cent respectively as tech continues to dominate.
 
Emerging technology platform Roblox (NASDAQ: RBLX) which allows users to create online games gained over 7 per cent after suggesting that each of their core markets was as large as US$200 billion globally, and highlighting the massive opportunity in the metaverse.

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