Key Data for the Week
Key economic data released this week:
The Australian sharemarket fell 0.5% yesterday, with the Information Technology and Health Care sectors the worst performers; Afterpay Touch fell 4.1% and WiseTech Global slipped 6.9%, while biotechnology company CSL lost 2.7% and Sonic Healthcare slipped 4.1%, after both going ex-dividend.
The Financials sector finished positive, with the big four banks all posting gains; NAB led the gains, up 1.6%, Westpac added 0.9%, while ANZ and Commonwealth Bank both rose 0.1%.
The Energy sector was the strongest performer, benefiting from rising oil prices; Santos climbed 4.1%, Oil Search rose 3.8% and Woodside Petroleum added 1.9%.
The Materials sector was mixed; Rio Tinto slipped 0.3%, while BHP and Fortescue Metals rose 0.5% and 1.7% respectively.
The Australian futures market points to a 0.26% rise today, being driven by stronger overseas markets.
European sharemarkets rose on Tuesday, with the Energy and Industrials sectors the strongest performers. Lloyds Banking Group rose 3.5% and Deutsche Bank added 1.7% to help boost the Financials sector. By the close of trade, the broad based STOXX Europe 600 rose 0.1%.
US sharemarkets were mixed overnight, with the REITs sector the worst performer. The Technology sector was mixed; Apple rose 1.2% after the launch of new products and Alphabet eked out less than a 0.1% gain, while Microsoft slipped 1.1% and Facebook fell 1.4%. Banks continued to rally to boost the Financials sector; Goldman Sachs rose 1.7%, JPMorgan added 1.3% and Citigroup gained 0.3%. By the close of trade, the Dow Jones rose 0.3%, while the NASDAQ lost less than 0.1%.
Yesterday’s NAB Business Confidence and Conditions data suggests pessimism continues to plague the outlook for Australian businesses. Rate cuts and tax breaks are yet to improve the mood of businesses, who are taking their cues from a difficult operating environment and global uncertainty.
Businesses became more downbeat in August, according to the survey, with a 2 point fall in the Conditions index to +1, and Confidence falling 3 points to +1, both well below their long-term averages.
Businesses (particularly non-miners) have been reluctant to take advantage of the current low interest rate environment to increase investment, with the retail and construction industries still the largest drags on the results.
We would expect existing rate cuts and tax breaks will prop up consumer spending, and in turn, have a flow-on effect on businesses. However, any significant bounce is likely to be muted, with continued global uncertainty likely to weigh on sentiment.
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