Key Data for the Week
Key economic data released this week:
The Australian sharemarket faded Friday afternoon to end the session flat, despite being up as much as 1.2% earlier in the day, after the latest government data released showed a rebound in retail sales across the nation. Retail sales rose 16.3% in May, following a 17.7% fall in the prior month. Consumer Discretionary and Information Technology stocks were the best performing sectors, with Materials the major laggard.
Buy-now-pay-later stocks rose, buoyed by the latest retail sales data; Afterpay gained 1.5% to close at a new all-time high, while Zip added 0.4%. Splitit continued to surge, ending the day up 6.9%, a day after the payments company announced a partnership with MasterCard, a multi-year agreement intended to widen the global reach of its payment method solution.
Nick Scali and Adairs strengthened 19.7% and 10.5% respectively, after both retailers provided positive sales updates. Nick Scali announced it would bring forward a dividend previously deferred due to the COVID-19 pandemic following strong sales in May and early June, while Adairs reported online sales had soared 92% on a year ago.
The Australian futures market points to a 1.33% fall today.
European sharemarkets rose on Friday, led by defensive stocks, as investors remained hopeful the EU's proposed €750bn stimulus package to help economies rebound from lockdowns will be passed. German airliner Lufthansa gained 3.0%, after the company’s biggest shareholder reached out to the nation’s politicians in the latest step of the airliner’s €9 billion euro bailout talks. The German DAX climbed 0.4% and the broad based STOXX Europe 600 lifted 0.6%, while the UK FTSE 100 added 1.1% after retail sales in the area rebounded 12% in May.
US sharemarkets were mixed on Friday. Reports of China’s plans to increase purchases of American farm goods was offset by renewed concerns of a second wave in COVID-19 cases in the nation. Arizona, California, Florida, South Carolina and Texas all hit record singly-day increases on Thursday, while there was a noticeable acceleration of cases in Arizona and Florida on Friday. The concern led the Cruise Lines International Association to extend suspension of operations from US ports until 15 September, while Apple slid 0.6% after the company announced it was re-closing 11 US stores. By the close of trade, the Dow Jones slipped 0.8% and the S&P 500 dipped 0.6%, while the NASDAQ was flat.
June may have been the most ‘open’ month we have had for some time but hopes the global economy is on its way back to normality may be premature, according to the International Monetary Fund (IMF).
Two months after their predictions of the steepest recession in almost a century, the IMF have warned that a revised outlook due to be released on Wednesday may be even more pessimistic than previously thought.
The IMF note the COVID-19 downturn is remarkably synchronised in that both advanced and emerging economies have been significantly affected and both will endure recessions this year, the first time both have suffered in tandem since the Great Depression of the 1930s.
With renewed outbreaks of the virus over the past few days in the relatively clean countries of New Zealand and Australia, it does appear we have a long way to go before businesses will return to normal.
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