Thursday – UK – Gross Domestic Product increased by 0.3% in the quarter ending 30 June 2017. GDP is 1.7% higher than the same quarter last year.
Thursday – US – Initial Jobless Claims increased 2,000 last week, to 234,000, while the 4 week moving average was 237,750, a decrease of 2,750 from the previous week.
Friday – US – Durable Goods Orders
The Australian market closed a touch higher in yesterday’s session, after one of the busiest days in this reporting season. Insurance and mining names offset what was a tough day for Real Estate Investment Trusts, with the benchmark ASX 200 index closing up 0.15%.
South32 (S32) released FY17 earnings yesterday, reporting a 19.6% increase in revenue and a significant increase in underlying EPS, to US$0.216, driven by a combination of stronger commodity prices and high operating leverage. Free cash flow increased US$1.3bn to US$1.9bn. S32 announced a fully franked final dividend of US$0.064/share, taking the total dividends paid for the FY17 year to US$0.10/share. S32 increased $0.05, to close 1.7% higher at $2.94.
Flight Centre (FLT) also released its FY17 earnings yesterday, reporting a 1.3% increase in revenue, however, EPS declined 5.7% to $2.29. Despite the decline, underlying earnings came in at $329.5m, towards the top end of its $325-330m guidance range, as stabilising airfare prices supported 2H17 earnings. FLT increased $4.73, to close 10.7% higher at $49.10.
The Australian futures market points to a 0.07% fall today.
Share markets in the US slipped slightly overnight. The Dow Jones closed down 0.13%, the S&P 500 ended 0.21% lower and the NASDAQ dropped 0.11%.
In Europe markets strengthened. The UK’s FTSE 100 increased 0.33%, Germany’s DAX lifted 0.05% and the broad based Euro Stoxx 600 gained 0.59%.
The powerful driver of US economic growth, the consumer, doesn’t appear to be losing any momentum, with consumer confidence hitting a 16 year high.
This weekly gauge of consumer comfort recorded its sixth straight weekly advance and the highest level since August 2001. The ‘measure of current views of the economy’ also rose to its highest level since April 2001.
The strong jobs market and absence of rising prices are making consumers more upbeat about buying conditions. This should see household spending continue to fuel the US economy in the second half of the year.
Interestingly, the strong level of consumer confidence appears unaffected by domestic worries related to violence in Charlottesville and Virginia, or geopolitical concerns regarding North Korea.
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