Lowest jobless rate since 1974, Resources sector rebounds: ASX up 0.3% at noon

Australia’s workforce continues to grow after employers added more jobs than economists expected in June, sending the unemployment rate to the lowest in 50 years. The figures have reinforced the strength of the economy ahead of the Reserve Bank of Australia’s (RBA) meeting next month.

Employment rose 88,400 from May largely attributed to full-time roles as reported by the Australian Bureau of Statistics. Economists expected a rise of 30,000 jobs while the unemployment rate fell to 3.5 per cent to the lowest since 1974.

The labour force participation rate ticked higher to 66.8 per cent which correlates to the number of job vacancies in the nation. In May, job openings rose 13.8 per cent from the month before to 480,100, according to the Bureau.

The RBA has raised interest rates by 125 basis points to 1.35 per cent in back-to-back meetings since May. Economists have forecasted that the central bank is expected to raise interest rates by 50 basis points before taking a breather in September as they curb 20-year high inflation.

The Australian dollar against the US dollar was little changed on the news, however equities rallied.

At noon, the S&P/ASX 200 is 0.3 per cent or 20 points higher at 6,642. The SPI futures are pointing to a rise of 24 points.

A rebound in commodity prices has propped up the Australian sharemarket as materials and energy stocks led the rebound by adding up to 1.8 per cent each. Information technology extended gains by 1 per cent, communication services and healthcare have also added 1 per cent each. Property has fallen 1.6 per cent, financials has lost 0.9 per cent while industrials and communication services are marginally lower.

Coal miners are leading the winner’s circle on speculation that China could be preparing to reverse its unofficial ban on Australian coal imports in August or September, according to The Australian. The 2020 bans impacted metallurgical coal more so than thermal coal suggesting that a ban unwind might benefit met coal volumes and prices.

New Hope Corporation (ASX:NHC) is up 6.7 per cent at $4.29, Whitehaven Coal (ASX:WHC) has added 6.9 per cent to $5.76 and Coronado Global Resources (ASX:CRN) is trading 6.2 per cent higher at $1.71 and are the ASX 200’s top three best performers.

Lake Resources (ASX:LKE) is down 6.3 per cent to 63 cents after the lithium miner responded to a short-seller report and is the worst performer on the ASX 200. Bega Cheese (ASX:BGA) and St Barbara (ASX:SBM) are also in the loser’s circle.

Company news

Telstra (ASX:TLS) has completed the acquisition of Digicel Pacific, following receipt of all necessary government and regulatory approvals. Telstra contributed US$270 million of equity to the US$1.6 billion purchase price and the Australian Government, through Export Finance Australia, provided the remaining US$1.33 billion. Shares are trading 0.4 per cent higher to $3.91.

Worley (ASX:WOR) has been awarded a contract from SSE Thermal for the development of a proposed low carbon power station located in Peterhead, Scotland. The contract has been awarded to a consortium of Worley, Mitsubishi Heavy Industries Group and Tecnicas Reunidas. Shares are trading 0.2 per cent higher to $13.24.

The Star Entertainment Group’s (ASX:SGR) Queensland casino operations will undergo an external review today. Robert Gotterson and counsel assisting will make general remarks concerning the nature and scope. Shares are trading 0.5 per cent higher to $2.93.

Select Harvests (ASX:SHV) says that its 2022 crop was impacted by weather conditions. This consisted of higher-than-usual humidity leading up to and during harvest where some of the crop required mechanical drying. This means that 100 per cent of the 2022 crop is now secure. Shares are trading 2 per cent higher to $5.30.

Catapult Group (ASX:CAT), a global performance technology company in elite sports, has announced that, following the release of GameTracker for the NBA, it has extended its full video suite to all NCAA and international basketball teams. Shares are trading 2.8 per cent higher to 92.5 cents.

Pilbara Minerals (ASX:PLS) has received 41 bids for 5000 dry metric tonnes of its spodumene concentrate. The bids were offered during an auction on the company’s digital Battery Metal Exchange platform. The winning bid came in at US$6188 per dry metric tonne (A$9169/dmt). The delivery is expected from August this year. Shares are trading 2.5 per cent higher at $2.42.

Galan Lithium’s (ASX:GAL) key project is the Hombre Muerto West lithium brine project in Argentina. Today, there’s been progress reported from the company’s long-term pump testing program. A three-day constant rate pump test has uncovered high lithium grades, positive porosity results and favourable conditions for high-volume brine production. The results will form part of Galan’s current definitive feasibility study. Shares are trading 0.5 per cent higher to 98.5 cents.

Business technology solutions company Data#3 (ASX:DTL) expects financial year 2022 net profit before tax of around $44 million, which is a 19 per cent jump from the same time a year ago which was $36.9 million. The board intends to maintain the historic dividend payout ratio. Shares are trading 7.9 per cent higher to $5.22.

Funds under management at Australian Ethical Investments (ASX:AEF) fell 9 per cent to $6.2 billion over the June quarter attributed to high volatile investment markets. The investment manager has also announced that a successor fund transfer deed was signed with Christian Super which will see all members of Christian Super transferred into Australian Ethical Super by 2023. Shares are trading 2.1 per cent higher to $5.29.
 
Commodities and the dollar

Gold is trading at US$1728.28 an ounce.
One Australian dollar is buying 67.58 US cents.
Iron ore is 3.4 per cent higher at US$109.40 a tonne.
Its futures are pointing to a rise of 0.2 per cent.
One Australian dollar is buying 67.58 US cents.