Key Data for the Week
Key economic data released this week:
The Australian sharemarket enjoyed its best session since mid-June, closing up 1.5%, and extending its recent rally for a fourth consecutive day. Gains were widespread, with all sectors closing higher, led by Consumer Staples, Health Care and Information Technology.
The big four banks all posted strong gains to lead Financials higher; Commonwealth Bank and Westpac both gained 2.1%, ANZ lifted 1.6% and NAB climbed 1.0%. The Materials sector was buoyed by mining giants BHP and Rio Tinto, as both companies strengthened 2.2%. Fellow ASX heavyweights, Telstra and CSL, further boosted the market, closing up 1.6% and 2.3% respectively.
The Australian futures market points to a 0.08% fall today.
European sharemarkets lifted on Friday to end the session at fresh one-month highs, after news emerged China and the US were willing to proceed on trade talks. The STOXX Europe 600 rose 0.7%, the German DAX lifted 0.9% and the UK FTSE 100 added 0.3%. However, the Italian FTSE MIB gave up 0.4%, after the Five-Star Movement gave potential coalition partner, the Democratic Party, a number of tough policy demands to agree to before they will form government together.
US sharemarkets were mixed in low volume trade on Friday, led by gains from the Financials, Industrials and Materials sectors. By the close of trade, the Dow Jones had gained 0.2% and the S&P 500 rose 0.1%, however, the NASDAQ slipped 0.1%.
Over the week, the Dow Jones strengthened 3.0%, the S&P 500 lifted 2.8% and the NASDAQ added 2.7%, as US markets closed higher following four straight weeks of decline.
In what can only be an ominous sign for the Australian economy in coming months, building approvals continued their contraction in the month of July, falling 9.7% from June.
While monthly fluctuations are common in this data, the annual data confirms the pace of contraction actually quickened, with approvals down 28.5% for the year. Since peaking in 2017, building approvals have fallen in trend terms for 20 consecutive months.
Apartment approvals registered an 18.4% fall in the month and were down 44.2% in the year to July, to the lowest level since July 2012.
This continued weakness in the construction sector remains a significant risk to the economic outlook.
Easier monetary and fiscal conditions will flow through to the construction sector eventually, but this could be a fair way off yet.
Construction is a key sector and these results confirm pressure will remain on unemployment, consumer spending and wages growth for some time to come.
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