Key Data for the Week
Key economic data released this week:
The Australian sharemarket staged a remarkable recovery on Friday to end the session up 4.4%, despite earlier being down as much as 8.1% in morning trade. A number of events contributed to the rally; Prime Minister Scott Morrison was addressing the media at the time, while in the US, House Speaker Nancy Pelosi told reporters the Democrats and the Republicans were close to agreeing to a stimulus package.
Health Care was the best performing sector, led by strong gains from Cochlear (21.1%), CSL (11.9%) and Ramsay Heath Care (6.9%).
The Financials sector was boosted by the big four banks, which all ended the session between 1.5% and 5.1% higher, with Commonwealth Bank the best performer. Consumer stocks posted strong improvements; Coles gained 8.7%, Wesfarmers lifted 8.0% and Woolworths added 6.7%. Telstra rose 6.4% to help lift the Telecommunications sector higher.
The Australian futures market points to a 1.08% rise today, driven by stronger global markets on Friday.
European sharemarkets ended a six-day losing streak on Friday, led by gains from the Resources index, while travel and leisure companies continued to fall, with the sector down a further 2.4%. The UK FTSE 100 lifted 2.5%, the broad based STOXX Europe 600 rose 1.4% and the German DAX climbed 0.8%. The Italian FTSE MIB posted a 7% improvement, bouncing back from a seven-year low, while the Spanish IBEX 35 strengthened 3.7%, underpinned by bank stocks, which were supported by higher euro zone bond yields.
US sharemarkets strengthened on Friday, as all key indices posted their biggest daily percentage gain since October 2008, after a national emergency declaration was made by President Trump. Apple rose 12% after the company announced it will reopen all its 42 branded stores in China. Fellow technology heavyweights Intel (19.5%), Microsoft (14.2%), Facebook (10.2%), Alphabet (9.4%) and Amazon (6.5%) also posted strong gains, while payment companies PayPal, MasterCard and Visa added 13.6%, 11.8% and 9.8% respectively. By the close of trade, the Dow Jones and NASDAQ both climbed 9.4%, while the S&P 500 lifted 9.3%.
The US Federal Reserve cut its Federal Funds Rate by a full percentage point this morning, having previously delivered an emergency 50 basis point rate cut earlier this month.
Below is a list of key actions taken by the central bank to support markets that have recently been impacted by the coronavirus outbreak and the oil price war. The US Federal Reserve has announced it has:
The word unprecedented is being used a lot at the moment. These are drastic moves to support liquidity in the bond market and stabilise the extreme volatility of the past three weeks.
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