Stocks were mixed as interest rate hike fears rose, China cut LPR

Stocks were mixed as interest rate hike fears rose, China cut LPR
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Shares in Australian cement maker Adbri fell 16% after profit fell

Shares of an Australian cement producer adbri sunk after placement 15% decrease in net profit for the first six months of the year compared to the same period of the year.

Adbri shares fell more than 16.54% on Monday.

Net profit was A$48.1 million ($33.2 million), while first-half revenue was up 8% year-on-year to A$812.4 million. This was primarily due to strong demand from the construction and mining sectors and improved prices for most products, the company said in a report.

Underlying net profit after tax was partially impacted by operational challenges related to extreme wet weather events on Australia’s east coast and higher costs.

– Abigail Ng

Reuters reports that the Reserve Bank of New Zealand wants rates “comfortably above neutral”.

Reserve Bank of New Zealand Deputy Governor Christian Hawkesby said policymakers in New Zealand wanted interest rates “comfortably above neutral” to combat rising prices. According to Reuters.

The The RBNZ raised its cash rate by 50 basis points to 3% last week. Hawkesby told Reuters that the central bank was considering a hike of 25 or 75 basis points.

He said taking the official cash rate above neutral would lower inflation and “give us some breathing room to see how things go”.

“We buy once [official cash rate] up to that 4%-4.25% level, we’re seeing things balance out from there. So we would give equal weight to the imperative to put OCR up as we put it down,” he said.

Hawkesby said policymakers were waiting for the economy to cool and acknowledged that uncertainties lie ahead.

– Abigail Ng

The IMF will go to Colombo for more economic solutions

The International Monetary Fund will visit Colombo this week to continue discussions with Sri Lankan authorities on economic and financial reforms and policies.

“The goal is to make progress toward reaching a staff-level agreement on the IMF’s Extended Fund Facility (EFF) program in the near term,” the IMF said in a statement over the weekend.

“As Sri Lanka’s public debt is assessed as unsustainable, approval of the EFF program by the IMF Executive Board will require adequate assurances from Sri Lanka’s creditors that debt sustainability will be restored.”

The IMF had already concluded the first round of discussions with Colombo in late June, working on a package of macroeconomic and structural policies to “correct macroeconomic imbalances, restore public debt sustainability and realize Sri Lanka’s growth potential.”

Other challenges to be addressed include containing rising inflation and addressing severe balance of payments pressures.

The EEF is the lending arm of the IMF and helps countries deal with balance of payments or cash flow problems.

– Su-Lin Tan

CNBC Pro: How to reduce risk in your portfolio right now, according to experts

Stocks have been volatile this year as a mix of recession fears, inflationary pressures and other macro risks roiled markets.

According to Goldman Sachs, Wells Fargo, and others, there are three ways investors can adjust their portfolios to reduce risk or reduce losses.

Pro subscribers can read more here.

– Weizhen Tan

The Central Bank of China has lowered lending rates

The The People’s Bank of China has cut its one-year benchmark lending rate 5 basis points and the five-year rate 15 basis points, according to an online statement.

This brings the one-year LPR to 3.65% and the five-year LPR to 4.3%.

Analysts polled by Reuters expected a 10 basis point cut in the one-year LPR, while half of respondents expected a 15 basis point cut in the five-year interest rate.

– Abigail Ng

CNBC Pro: JPMorgan predicts when rally in growth stocks will end

Investors have flocked to growth stocks of late, but as recession fears mount, market watchers are opting to shift to safer bets instead.

However, JPMorgan thinks the rally still has a long way to go and is looking at several indicators as it considers a pivot away from growth stocks.

Pro subscribers can read the story here.

– Xavier Ong

Here’s what to expect from Powell’s Jackson Hole speech

Fed Chairman Jerome Powell is expected to speak at the central bank’s annual symposium in Jackson Hole, Wyoming this week and shed some light on the pace of future rate hikes.

Powell could point to blunt comments from Fed officials recently stressing their commitment to fighting inflation as investors enjoy a summer rally in part due to less aggressive Fed expectations.

Again, St. Louis Fed President James Bullard said in an interview last week The Wall Street Journal he said that he is considering another 0.75 percentage point interest rate increase at the September meeting.

Check out CNBC Pro for More on what to expect from the Fed chairman.

– Sara Min

According to a Reuters poll, China is preparing to lower lending rates

China is set to release lending rates (LPR) on Monday Analysts expect widespread layoffs, according to a Reuters poll.

Most analysts expected the benchmark one-year lending rate to be cut by 10 basis points, while the five-year LPR expected to fall by more than 10 basis points.

About half of the 30 respondents to the poll forecast a 15-point decline, Reuters reported.

The one-year LPR is currently at 3.7%, and the five-year rate is at 4.45%, after the cut in January. China was said to be supporting housing demand by cutting its five-year LPR by 15 basis points in May.

– Abigail Ng

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