Key Data for the Week
Key economic data released this week:
The ASX finished lower in Wednesday trading, with the benchmark ASX 200 index closing down 1.01%.
All sectors finished lower, with Consumer Staples and Energy the worst affected. Woolworths lost 1.40%, Wesfarmers dropped 1.50% and AGL gave up 1.76%.
Heavyweight miners BHP and RIO also finished the day lower, falling 1.01% and 0.99% respectively.
Amongst the big four banks, Westpac was the worst performer, falling 1.6%, ANZ and NAB each fell 1.3% and Commonwealth Bank ended 0.7% lower.
The Australian futures market points to a 0.41% rise today.
US equities ended mixed on Wednesday night, after rebounding well off session lows in a volatile day of trade, following the resignation of Gary Cohn as Trump’s top economic adviser. Energy, Consumer and Utilities were among the worst performing sectors, while the Health Care, REITs and Information Technology sectors saw solid gains. The Dow Jones fell 0.33%, the S&P 500 gave up 0.05% and the NASDAQ gained 0.33%.
Markets rallied in Europe overnight with Germany’s DAX the best performer, up 1.09%, whilst France’s CAC 40 and the UK’s FTSE 100 rallied 0.34% and 0.16% respectively.
On the surface of it, Australia’s GDP for the December quarter, which was released yesterday, was a pretty ordinary outcome, with the annual GDP growth rate of 2.40% below the 20 year average of 3.10%.
However, in a case where a cloud has a silver lining, the weak GDP number had some underlying positives to it. Most notably in the December quarter, was the increase in household consumption, which showed a healthy growth of 1%. Surprisingly, the lift in household spending came entirely from growth in household income.
Whether this can be expected to continue is already in doubt. As we discussed in Tuesday’s Morning Market Update, January’s retail sales reflected a fragile consumer with weak retail sales, which indicates the March quarter is already off to a lacklustre start.
For the time being, the focus will probably be on the positive sign of higher household spending in yesterday’s data.
It’s been a weakness for so long.
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