Telstra Group Ltd (ASX: TLS) shares were under pressure on Thursday following the release of its half-year results.

Investors were disappointed to see management trim its earnings guidance range for FY 2024 in response to weakness from one side of the business.

Telstra’s shares ended the day over 2% lower at $3.90.

Is this a buying opportunity for investors? Let’s see what analysts at Goldman Sachs are saying about the telco giant.

Are Telstra shares good value?

Goldman has been running the rule over Telstra’s result and believes it was better than the market reaction would imply.

The broker highlights that “NAS challenges overshadow a solid core [result] and drive -2% to -3% EBITDA downgrades, but we believe issues are cyclical.”

The broker picked out a few positives from the result that investors might want to focus on. It said:

Key positives: (1) Mobile EBITDA beat on better costs (and a very small one-off hardware margin benefit). Sub growth was also ahead of GSe, with strong 2Q trading that has continued into 3Q – implying a full CPI mobile price rise is likely this year; (2) NBN re-sale margins improved to 10% (vs. 4%/7% in 1H22/1H23), with some further potential benefit into 2H24 – but we expect the focus to shift to revenue growth; and (3) InfraCo Fixed earnings beat and will accelerate further into 2H24 on improved efficiency and ex-NBN strength.

All in all, Goldman has seen enough to remain positive and has reiterated its buy rating with a trimmed price target of $4.55 (from $4.65).

Based on the current Telstra share price of $3.90, this implies potential upside of almost 17%.

Importantly, Goldman’s dividend forecasts remain unchanged. It continues to expect dividends per share of 18 cents in FY 2024, 19 cents in FY 2025, and 20 cents in FY 2026. This would mean dividend yields of 4.6%, 4.9%, and 5.1%, respectively.

The post Down 12% from their highs: Are Telstra shares a post-results bargain buy? appeared first on The Motley Fool Australia.

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More reading

• 3 high-quality ASX 200 dividend shares to buy for a second income
• 5 things to watch on the ASX 200 on Friday
• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• Everything you need to know about the Telstra dividend
• Telstra shares tumble on half-year disappointment

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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A number of S&P/ASX 200 Index (ASX: XJO) shares have soared in recent months. Despite that, the investment team at Wilson Asset Management has picked out two stocks that it thinks look cheap.

WAM Leaders Ltd (ASX: WLE) is the listed investment company (LIC) that invests in ASX large-cap shares, which are often called ASX blue-chip shares. The idea is that this zone of the market is full of the strongest and biggest Australian companies.

While they aren’t the biggest businesses on the ASX, the below names are among the leaders across the globe at what they do.  

Orora Ltd (ASX: ORA)

WAM describes Orora as a business that provides glass and can beverage packing in Australia and New Zealand. It also provides packaging solutions including corrugated sheet packaging in North America and Central America. Orora acquired Saverglass last year, a high-end bottle manufacturer based in France.

The investment team suggested that the Orora share price has been impacted since the acquisition because the destocking cycle has been “more aggressive” than first anticipated.

However, results by key international customers of Saverglass – Diageo, LVMH and Remy Cointreau – show that there are “green shoots emerging with customer depletion rates ahead of shipping volumes.”

WAM also pointed out that a surge in South Australian wine exports in late 2023 suggests “strong volumes” for the ASX 200 share’s Australasian business.

The investment team revealed that Orora remains a key holding within the WAM Leaders portfolio and they believe it’s “still trading at a deep discount to its deserved valuation”.

Brambles Ltd (ASX: BXB)

Brambles is another very large ASX 200 share. According to WAM it owns and operates the world’s largest pool of reusable pallets and containers, which are used to transport fast-moving consumer goods, fresh produce, beverage, retail and general manufacturing through its supply chains.

The investment team said that Brambles benefits from the same destocking trends as Orora, with key customers reporting “consistent volume improvements” in the three months to December 2023.

WAM said that the amount of pallets issued is generally an early-cycle indicator, and the rate of decline has slowed, while pallet returns are late cycle, and these are elevated.

In the investment team’s opinion, this suggests excess pallets have “washed through the system”.

Brambles is also a “key holding” in the investment portfolio and WAM expects “another solid result” when it reports later in February.

The post 2 ASX 200 shares trading at a ‘deep discount to their deserved valuation’ appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Diageo Plc. The Motley Fool Australia has recommended Orora. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Are you an income investor looking for dividend shares to buy? If you are, then you might want to read on.

That’s because listed below are three top ASX 200 dividend shares that analysts are recommending as buys.

Here’s what you need to know about them:

Charter Hall Group (ASX: CHC)

The first ASX 200 dividend share that could be a buy is Charter Hall. It is a property fund manager and developer across the office, retail, industrial and residential sectors.

Citi is a fan of the company and has a buy rating and $13.50 price target on its shares. It highlights the company’s “strong portfolio and management track record.”

As for dividends, the broker is forecasting dividends per share of 45 cents in FY 2024 and 48 cents in FY 2025. Based on the current Charter Hall share price of $12.36, this will mean yields of 3.65% and 3.9%, respectively.

Telstra Group Ltd (ASX: TLS)

Another ASX 200 dividend share that analysts rate as a buy is telco giant Telstra.

Goldman Sachs has responded to its half-year results this week by retaining its buy rating with a trimmed price target of $4.55.

In respect to income, the broker continues to forecast fully franked dividends of 18 cents per share in FY 2024 and then 19 cents per share in FY 2025. Based on the current Telstra share price of $3.90, this equates to fully franked yields of 4.6% and 4.9%, respectively.

Transurban Group (ASX: TCL)

Finally, the team at Citi is also tipping Transurban an ASX 200 dividend share to buy. It manages and develops urban toll road networks in Australia and North America.

The broker responded to Transurban’s half-year results earlier this month by retaining its buy rating with a $15.60 price target.

In addition, Citi is now expecting dividends per share of 64 cents in FY 2024 and 65 cents in FY 2025. Based on the current Transurban share price of $12.94, this will mean yields of 4.9% and 5%, respectively.

The post 3 high-quality ASX 200 dividend shares to buy for a second income appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• Everything you need to know about the Telstra dividend
• Telstra shares tumble on half-year disappointment
• Telstra share price on watch amid earnings miss and guidance revision

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX uranium shares have been all the rage of late due to a skyrocketing uranium commodity price.

The uranium price is up 110% over the past 12 months and trading at about US$106 per pound.

That’s a 17-year high.

There is strong and rising global demand for uranium as countries embrace nuclear energy as part of the green energy transition.

Supply is currently restricted given so many uranium mines have been on care and maintenance while the uranium price was low.

This supply/demand imbalance is the key driver behind the stratospheric rise in the uranium price.

Fund manager Monash Investors is backing two particular ASX uranium shares for growth.

Which 2 ASX uranium shares does this fundie like most?

The fund manager’s favourite stocks are Paladin Energy Ltd (ASX: PDN), which is the biggest uranium player by market capitalisation, and Boss Energy Ltd (ASX: BOE).

In the January update for the Monash Investors Small Companies Fund, the fundie said both were good contributors to an overall 0.3% increase (after fees) in the fund’s value last month.

Monash describes both ASX uranium shares as “low-risk plays”, commenting:

Both of these companies have large reserves in good jurisdictions, strong management expertise and are low-risk plays on the commodity.

The prospects for uranium supply and demand remain highly favourable.

The Paladin Energy share price is up 63% over the past 12 months.

The Boss Energy share price is up 108% over the past 12 months.

Another fundie, Shaw and Partners, is invested in five ASX uranium stocks, including Paladin Energy shares.

Last month the broker upped its 12-month forecast for the uranium price from US$85 per pound to US$150 per pound. It urged investors to buy uranium stocks now before “panic buying” sets in.

The post 2 ‘low risk plays’ amid surging ASX uranium shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was able to shake off recent volatility and push higher. The benchmark index rose 0.8% to 7,605.7 points.

Will the market be able to build on this on Friday and end the week on a high note? Here are five things to watch:

ASX 200 expected to jump again

The Australian share market looks set to end the week strongly following a positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 70 points or 0.9% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.7%, the S&P 500 is up 0.5%, and the NASDAQ is up 0.15%.

Oil prices storm higher

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have a great finish to the week after oil prices stormed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.8% to US$78.00 a barrel and the Brent crude oil price is up 1.5% to US$82.82 a barrel. A weaker US dollar boosted prices.

Insurance giants results

Two of the largest insurance companies on the ASX 200 will be releasing their results today. Insurance Australia Group Ltd (ASX: IAG) and QBE Insurance Group Ltd (ASX: QBE) are both expected to deliver strong results thanks to favourable trading conditions and rising premiums. This could mean bumper dividends for shareholders.

Gold price rises

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good session after the gold price pushed higher overnight. According to CNBC, the spot gold price is up 0.6% to US$2,016.7 an ounce. This was driven by a softer US dollar.

Telstra remains a buy

Telstra Group Ltd (ASX: TLS) shares are still a buy according to analysts at Goldman Sachs. In response to the release of the telco giant’s half year results, the broker has retained its buy rating with a trimmed price target of $4.55. It said: “NAS challenges overshadow a solid core and drive -2% to -3% EBITDA downgrades, but we believe issues are cyclical.”

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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• This ASX 200 energy stock is predicted to pay a dividend yield of almost 8%!
• Here are the top 10 ASX 200 shares today
• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• Everything you need to know about the Telstra dividend
• Telstra shares tumble on half-year disappointment

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) energy stock Ampol Ltd (ASX: ALD) is forecast to pay a significant dividend yield to shareholders this year.

Let’s take a closer look at the company and its recent performance.

What does Ampol do?

Ampol is one of the largest petroleum, or “transport energy”, providers in Australia. Previously known as Caltex Australia, the company supplies the country’s largest branded petrol and convenience network. It’s also involved in refining, important and marketing fuels and lubricants.

It has 16 terminals, six major pipelines, 55 ‘wet’ depots and more than 1,800 branded sites (including 690 company-operated retail sites). It has a refinery based in Lytton, Queensland.

The company also has a trading and shipping business that operates out of Singapore and Houston (USA). Ampol owns Z Energy, which sells approximately 40% of all fuel volumes across New Zealand. And it has a 20% interest in Seaoil, a fuel company in the Philippines.

The ASX 200 energy stock could pay a big dividend yield

Ampol is making a solid profit at the moment, enabling the ASX 200 energy stock to pay shareholders a decent dividend.

In its fourth-quarter update recently, the company advised it anticipated its earnings before interest and taxes on a replacement cost basis (RCOP EBIT) for 2023 to be “slightly ahead” of the record results delivered in 2022 — on a continuing basis.

Growth in earnings from non-refining divisions offset a reduction in refinery earnings from the historically high levels in the prior year.

The projection on Commsec suggests that the 2024 earnings per share (EPS) could be $2.86. This would imply the business is trading at 13x FY24’s estimated earnings. From that profit, it could pay an annual dividend per share of $2, translating into a grossed-up dividend yield of 8% if we round it to the nearest whole per cent.

But, keep in mind that the forecast also suggests a slight decline in the EPS in 2025. This could see a dividend of $1.89 per share, which would be a grossed-up dividend yield of 7.25%.

What about the growth of electric vehicles?

Of course, electric vehicles don’t need petrol, which could present a growing headwind for the company in the future.

Ampol recently launched its electric vehicle charging and home electricity solutions to ensure it delivers its customers’ “changing energy needs”.

It’s a good move to put charging stations at service stations, but I’d imagine most people will do most of their car charging at home (or work) rather than at a service station.

However, at this stage, electric vehicles still make up a small number of vehicles on the roads.

Ampol share price snapshot

The Ampol share price has surged 15% over the past six months.  

The post This ASX 200 energy stock is predicted to pay a dividend yield of almost 8%! appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Why is the ASX 200 index crashing 1.5% on Wednesday?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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…Ready For It? Today is anything but a cruel summer if you’re a Swiftie, with mother playing her first of seven shows in Australia tonight.

If you’re lucky enough to have a ticket to the Eras Tour (like I am), then you will no doubt be preoccupied over the next 10 days.

But when the dust settles and Taylor jets off to Singapore, it could be a good time to look at following in her footsteps with investing.

Taylor’s parents, Andrea and Scott, used to work in the finance industry before becoming full-time supportive parents. Her dad was a stockbroker and a vice president for Merrill Lynch, whereas her mother Andrea was a marketing manager.

In light of her parent’s background, it may not come as a surprise to learn that Taylor reportedly invests the hard-earned money she is making from her albums and tours.

Where does Taylor Swift invest?

According to Forbes, billionaire investor Boaz Weinstein from Saba Capital Management has been told by Scott Swift that his daughter invests in closed-end funds (CEFs).

Weinstein tweeted:

Did you know that @taylorswift13 invests in discounted closed end funds? You think I’m kidding, but her father, Scott, told me so!

A CEF invests in a portfolio of shares and is usually managed by an investment management firm.

They are classed as closed because they are effectively shut to new money once launched. This means that if you want in, you will need to buy a share from someone that already holds the CEF.

In Australia, we have listed investment companies (LICs) that do the same job. This includes Australian Foundation Investment Co Ltd (ASX: AFI) and MFF Capital Investments Ltd (ASX: MFF).

As Weinstein said, the Folklore singer is savvy and looks to buy these funds at a discount to their net asset value. This is the equivalent of buying an Eras ticket that you know to be worth $200 for $180.

This is very smart for a number of reasons. One is that we love getting value for money with our investments. It provides us with a better risk/reward. If something is already trading at a discount, it gives us a greater margin for safety if things don’t go to plan.

In addition, if things do go to plan, your potential gains are even greater because you bought on the cheap. It would be like reselling that Eras ticket for $250.

Why should you invest?

It’s been over five years since Taylor Swift last toured in Australia. Let’s hope it won’t be another five years until she hits our shores again.

But let’s imagine that it will be. If you are in a position to invest in ASX shares between now and then, you could build up a nice little nest egg.

For example, if you were able to put $250 into the share market each month and earned a 10% per annum return (in-line with historical averages), you would have a portfolio worth approximately $20,000 after 5 years thanks to compounding.

That would be more than enough to buy A Reserve Floor tickets if you can bear to see the Ticketek queue page again.

Alternatively, you could find the money for the tickets from somewhere else and keep going with your investment journey.

After all, if you were to keep investing $250 for another 5 years and earned the same return, you would have grown your investment portfolio to a cool $50,000.

I think we can all learn many things from Taylor Swift. And investing is one of them.

The post How to invest like Taylor Swift with ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One of the biggest names on the ASX 200 reported its latest earnings yesterday. That name is Wesfarmers Ltd (ASX: WES), the sprawling conglomerate behind famous retailers like Bunnings, OfficeWorks and Kmart. And income investors, in particular, will be delighted by the latest Wesfarmers dividend.

As we covered on Thursday, these earnings have been well received by investors, who sent the Wesfarmers share price up to a fresh new 52-week high yesterday.

It’s not hard to see why. As my Fool colleague dug into, Wesfarmers delivered a pleasing set of green figures. Revenues for the six months to 31 December rose by 0.5% to $22.67 billion.

Earnings before interest and tax (EBIT) were up 1.6% to $2.2 billion, while net profits after tax (NPAT) vaulted 3% higher to $1.43 billion.

But let’s talk about the Wesfarmers dividend.

What’s new with the Wesfarmers dividend?

Along with the rest of the company’s metrics, Wesfarmers revealed a higher dividend that’s now in store for shareholders. The company’s upcoming interim dividend will be worth 91 cents per share, replete with full franking credits (as is the norm for Wesfarmers).

This newly-revealed payment is a rather historically important one for Wesfarmers.

For one, it represents a 3.4% increase over last year’s interim dividend worth 88 cents per share. Together with October’s final dividend of $1.03 per share, investors are now in line to bank a total of $1.94 in dividends per share over the 2024 financial year. Again, that is an increase over the $1.88 those investors enjoyed over FY23.

But this payment is also the highest interim dividend that Wesfarmers will have paid out since April 2019. And that payment was partially funded by Wesfarmers’ old ownership of Coles Group Ltd (ASX: COL). Coles was spun out of Wesfarmers’ portfolio back in late 2018.

If anyone who doesn’t currently own Wesfarmers shares wishes to secure this upcoming payout, they will need to own Wesfarmers shares by the ex-dividend date of 20 February (next Tuesday).

Wesfarmers is currently running a dividend reinvestment plan (DRP), which will be active for this dividend payment. For any investors who might wish to receive additional Wesfarmers shares in lieu of the traditional cash payment, they will need to enrol in the DRP by 22 February.

Payment day will then roll around on 27 March next month.

At the current Wesfarmers share price of $61.91, this ASX 200 conglomerate has a trailing dividend yield of 3.09%. Plugging in the newly announced dividend, we get a forward dividend yield of 3.13%.

The post Everything you need to know about the new Wesfarmers dividend appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• What can Wesfarmers’ results tell us about the future of ASX lithium shares?
• Why Altium, Goodman, Magellan, and Wesfarmers shares are storming higher today
• Wesfarmers share price pops 5% to new high after dividend hike
• Wesfarmers share price on watch amid stellar first-half Kmart growth

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Last year saw many ASX growth shares turn it around after a period of malaise.

Now, in 2024, the market is looking forward to interest rates stabilising and maybe even a rate cut or two.

The team at ECP Growth Companies Fund recently named a pair of stocks it’s backing for outperformance this year:

No need for a capital raise

Virtual network provider Megaport Ltd (ASX: MP1) has already kicked off 2024 in the right way.

“Megaport outperformed in January as the company released their 2Q numbers late in the month,” read the ECP memo to clients.

That update was as bullish as ECP analysts predicted, but it was apparent others weren’t thinking the same way.

“While the result was in line with our expectations, the positive share price reaction on the day suggested the market was positioned differently.

“Free cash flow increased over the quarter, leading to a significant increase in the cash at bank, further allaying concerns regarding the need for a capital raise.”

Even after a sensational 12 months in which the Megaport share price more than doubled, the business had future potential galore for the long-term investor.

“While the opportunity to further monetise their network fabric remains immense, it will take time.”

According to CMC Invest, 10 out of 15 analysts currently agree with the ECP team that Megaport is a buy.

‘Considerable runway’ for these growth shares

Resmed CDI (ASX: RMD) is also off to a flying start this year, rising more than 10%.

The growth stock is now trading more than 30% higher since its September trough.

The ECP team liked what it saw from a business update last month.

“The recent quarterly result was received well by the market as it signified operational leverage and margin improvement. 

“Sleep apnoea is still a major problem and an underpenetrated market both in the US and globally, leaving a considerable growth runway available for RedMed.”

ResMed currently has almost the whole sleep apnoea device market to itself.

“With other competitors still well behind, we remain positively disposed to the company’s future prospects.”

Currently, 18 out of 26 analysts surveyed on CMC Invest believe ResMed shares are a buy.

The post 2 ASX 200 growth shares to buy with ‘immense opportunity’ ahead appeared first on The Motley Fool Australia.

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More reading

• Brokers say these explosive ASX growth shares are buys with massive upside
• How high could the ResMed share price climb?
• 3 ASX shares this fund manager thinks are compelling buys right now
• 2 sizzling-hot ASX stocks to buy right now
• Here’s how the ASX 200 market sectors stacked up this week

Motley Fool contributor Tony Yoo has positions in ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) investors have been waiting a long time for the Reserve Bank of Australia (RBA) to cut interest rates.

The last reduction to Australia’s official cash rate came in November 2020. Worried about deflation and the economic impacts of the global pandemic, that day saw the RBA cut interest rates by 0.25%, which brought the cash rate down to 0.10%.

The cash rate remained at that historic low until May 2022.

With inflation suddenly soaring, the RBA then began a rapid tightening cycle. The last increase in November 2023 brought the benchmark interest rate to the current 4.35%.

The ASX 200 has weathered those increases surprisingly well. Yet stocks have gone backwards with nearly every rate hike announcement while lifting with almost every pause in the tightening cycle.

With history as our guide, ASX 200 investors will likely send the market march higher once the central bank begins easing.

Many investors were disappointed when that didn’t happen in February. And according to the RBA interest rate indicator, 10% are still expecting that to happen when the RBA board meets again on 19 March.

(Those expectations may be higher now, following a higher-than-expected increase in unemployment. Thursday’s data revealed the Aussie jobless level increased to 4.1% in January. That’s up from 3.9% and the highest in two years.)

How long will ASX 200 investors have to wait for interest rates to come down?

While interest rates went up by the elevator, it’s likely they’ll take the stairs on the way down.

According to RBA governor Michele Bullock, “Our view, and it’s reflected in our forecasts, is that inflation is being persistent. But we are seeing it come down and back in the band in 2025.”

A large part of that persistent inflation (which just a few years ago was ‘stubbornly absent’) stems from the lagging increases in services costs. Those service cost increases are also lagging behind the slowing inflation we’re seeing across most market sectors.

With all this in mind, economists at the Commonwealth Bank of Australia (ASX: CBA) are pencilling in the first RBA rate cut in September.

While that might seem a long way off, CommBank CEO Matt Comyn cautions that ASX 200 investors may not see any interest rate relief until 2025 (courtesy of The Australian Financial Review).

That’s partly due to the sticky inflation in the United States. US inflation came in at an annual rate of 3.1% in January, above consensus expectations of 2.9%.

Citing “persistent” inflation, Comyn said of CBA’s September base case for rate cuts that “there is certainly a possibility that could be delayed” until 2025.

According to Comyn:

[Rate cuts] will be data-driven and, clearly, inflation coming down should be the highest priority. There is some uncertainty about exactly when rates will come down and what the pace of the reductions might be.

Foolish takeaway

There’s clearly a lot of uncertainty in the air.

While that can be disconcerting, there’s one thing we can be (almost) certain of.

Interest rates will come back down.

That may happen as early as March. Or it may not happen until September or even not until 2025.

In the meantime, I suggest using any shorter-term market retrace as an opportunity to look at adding more high-quality ASX 200 shares to your investment portfolio.

The post Crikey! Will ASX 200 investors really have to wait until 2025 for RBA interest rate cuts? appeared first on The Motley Fool Australia.

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More reading

• How much passive income could I earn buying $5,000 of CBA shares today?
• Why you should sell your CBA shares before it’s too late
• 5 things to watch on the ASX 200 on Thursday
• Everything you need to know about the CBA dividend
• CBA shares tumble 3% on half-year profit decline and margin pain

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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