Share market correction ‘likely’ as Coles, Harvey Norman dive — as it happened

OK, that’s all from the ABC business team for today and this week.

Looking ahead we’re watching all things Trump and the US economy, geopolitics, local inflation, economic growth and the implications for interest rates.

This half-year reporting season is also proving a wild ride for investors.

Have a nice weekend and take care.

Catch you next week.

Loading

Australians have squirrelled away an additional $2.8 billion in the month of January, Canstar has reported.

Today’s APRA statistics show household deposits among authorised deposit-taking institutions (ADIs) hit a new record high of $1.72 trillion in January, an increase of $134.5 billion in the space of a year.

Can anyone help Matt here?

It’s a mystery.

AMP’s head of investment strategy has decided to throw a little Friday afternoon grenade.

Here’s his outlook for equities:

Stretched valuations, political uncertainty associated with Trump & the mid-term elections, AI bubble & tech valuation worries, and geopolitical risks are the main drags [for shares].

But returns should still be positive thanks to Fed rate cuts, Trump’s consumer-friendly pivot and solid profit growth.

A return to profit growth should also support gains in Australian shares even though the RBA has increased rates.

Another 15% or so correction in share markets is likely along the way though.

As always this is not intended as investment or financial advice.

Australia’s National Accounts for the fourth quarter of 2025 will be published Wednesday March 4.

The papers will contain gross domestic product (GDP) figures.

The strength of economic growth will weigh into the Reserve Bank’s deliberations on interest rates.

It’s been a bruising week for Australia’s second biggest supermarket. Shares plunged 7% after half-year earnings showed net profits were down 11.3% this morning. The company is also being sued by the ACCC over allegedly misleading promotions, which wrapped up closing arguments this week.

After briefly picking up a few points in the afternoon, the supermarket giant’s shares continue to slide, down 7.35% for the day.

The S&P/ASX 200 has closed up 23 points or 0.25% to 9,198.60.

It’s a record closing high.

So far this year the Australian share market is up 5.3%, against 2.8% for global shares.

Here’s an excerpt from AMP’s Shane Oliver weekly note about the cash coming out of tech and into the broader US share market.

The rotation from tech to non-tech continues.

This is evident in the continuing outperformance of the equal weighted US S&P 500 which is up 6.7% year to date compared to the tech heavy market cap weighted S&P 500 which is up just 0.9%.

[It’s also evident] in the relative outperformance so far this year of non-US share markets with Eurozone shares up 6.4% and Japanese shares up 16%.

Tech has a 32% weight in the US share market but its nearly 50% if tech like stocks are included.

Many Australians are worried about the rising cost of living, but we don’t often hear how our young people feel about it.

ABC’s Behind the News program asked young people about their financial worries — which include housing, inflation and pay!

The Australian Securities and Investments Commission is suing Budget Direct’s underwriter, Auto and General.

ASIC claims tens of thousands of the insurer’s customers lost discounts they were promised and were overcharged.

Here’s a quick look at the case and what it means for Budget Direct customers.

REA Group’s shares are up 4.17%, trading at $167.25 in late Friday trading.

The owner of realestate.com.au announced it was buying back over 60,000 shares over the past few days.

Bapcor’s stock price is down 48% to 90 cents at 2:30pm AEDT.

British-Australian mining giant Rio Tinto has signed a deal with Chile’s Codelco to explore development and investment opportunities.

The two companies agreed to join together to identify pilot projects. Rio Tinto currently partners with Chilean state-owned Nuevo Cobre, a copper and lithium project in Chile.

Australians love their parcels it seems.

Australia Post has reported: “Parcel volumes increased by 5.1% [in the first half], driving revenue of $3.61 billion, up 4.1% on the same period last year.”

During the “peak”, Australia Post delivered 3,075 parcels every minute* — around one million additional parcels per week compared with last year, while achieving record service levels.

However, intensive competition in the eCommerce market has led to tighter pricing and compressed margins.

*Calculation based on Australia Post deliveries during the period  November 1 – December 31, 2025 over 12-hour days, excluding Sundays and public holidays.

Perhaps unsurprisingly, Australia Post’s letters service runs at a loss.

The letters service saw an interim loss of $2.1 million for the half driven by continued structural declines in letter volumes.

This is an improved outcome due in part to a $0.20 increase to the Basic Postage Rate (BPR), which came into effect in July 2025. 

Here’s what the postal group had to say about this service today:

As Australians continue to send fewer letters, the letters service is expected to record a large loss for FY26.

In December, Australia Post lodged a draft notification with the Australian Competition and Consumer Commission (ACCC), proposing a $0.15 increase in the BPR from $1.70 to $1.85.

Further price increases will be required to help mitigate the impact of the continued structural decline in the letters service.

With fewer than 3% of letters sent by individuals, the average cost to Australian households would be less than $1 extra per year.

Following a record-breaking peak, Australia Post has reported an interim profit of $50.4 million, “while significantly accelerating investments to transform its network and meet surging eCommerce demand,” the government-owned corporation said.

This result is $198.7 million lower than the prior corresponding period.

The result, Australia Post said, “highlights increased costs for energy, enterprise agreement wage increases and property”.

“The letters service continues to run at a loss and volumes remain in decline.”

Increased demand for eCommerce during “peak” drove a 5.1% rise in parcel volumes for the half, compared with 1H25, with more than 283 million parcels delivered.

Australia Post has published its earnings performance for the half year to 31 December 2025:

The key points are as follows:

• Group revenue $5.06 billion, up 1.1% on same period last year (1H25)
• Group profit before tax $50.4 million, down $198.7 million from $249.1 million in 1H25
• Parcels and Services revenue $4.11 billion, up 1.1% on 1H25
• Letters revenue $952.2 million, up 0.9% and volumes down 11.5% compared to 1H25
• Investment of $219.9 million to transform the business, up 53.6% on 1H25

There’s evidence the enthusiasm for private credit may be cooling.

Here’s an excerpt from a JPMorgan note that just dropped in my inbox:

Private-sector credit rose 0.5%m/m in January, two-tenths below both J.P. Morgan and consensus expectations (+0.7%m/m).

The softer print hints at an emerging stabilisation in credit growth into 2026 and is consistent with the RBA’s shift to a hiking bias.

In annual terms, credit growth held at 7.7%oya — unchanged from December but still elevated by historical standards.

From here, we expect a moderation in rate‑sensitive segments, while tailwinds for first-home buyers should keep housing credit relatively firm.

That last line is not-such-great news for anyone hoping for a cooling in property price growth.