ASX Today: XJO down -2% as investors presumably realise 4% CPI isn’t a good thing

When America coughs the world catches a cold, but apparently Australia’s immune system is compromised.

Despite reacting, perhaps strangely, with gusto to yesterday’s CPI read of 4%, today the market reversed and closed down around -1.9%. (Let’s just call it -2%.)

And that brings us to a depressing metric: over the last week, the ASX200 is down -5%.

I wouldn’t be surprised if the less-exciting realities of yesterday’s supposed good news(?) from the ABS kicked in.

Those realities being: that headline inflation is well outside the 2-3% target band; that fuel prices are set to remain elevated, that property prices too are falling (though if you zoom out onto a 5Y chart it’s a pretty small drop), and that we might be in for another RBA hike not too far down the road.

Plus, that Wall Street continues to outperform the ASX200 to a shameful degree (this Dockers fan journalist can’t help but feel there’s a parallel to be drawn on here) and that Donald Trump’s war with Iran is unlikely to go anywhere.

And that AI companies are still the top dogs, for some reason, and we don’t have any, unless you consider BHP an AI stock like Morgan Stanley do because it mines copper; which seems to be a perception held only by analysts at Morgan Stanley.

Strangely, though, there was no real obvious catalyst for such a depressing day. Betashares analysts have pointed to a general sense of despondency, but you don’t need to be an analyst to figure that out.

The S&P500 ended down a quarter of a percent overnight which usually does influence the Aussie mood, but not to the tune of -2%.

Personally, I think the market has considered overnight what 4% CPI actually means and realised that there wasn’t really any reason to celebrate.

Join the discussion: See what’s trending right now on HotCopper, Australia’s largest stock forum, and be part of the conversations that move the markets.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.