Key Data for the Week
Key economic data released this week:
The Australian sharemarket fell 1.2% yesterday, with all sectors closing lower. Utilities and REIT’s were the weakest performers, both down over 2%.
Financials were dragged lower by the big four banks; Commonwealth Bank and Westpac both fell 1.2%, ANZ lost 1.0% and NAB slipped 0.8%. The Materials sector fell following a fall in iron ore prices, BHP lost 1.8% and Rio Tinto fell 1.0%.
Health Care and Telecommunications stocks also came under pressure, CSL fell 1.5% and Cochlear lost 2.2%, while Telstra fell 0.8%.
The Australian futures market points to a 0.02% rise today.
European sharemarkets fell on Monday. Deutsche Bank weighed on the market, down 5.4%, as investors questioned the bank's restructuring targets, as it begins to cut 18,000 jobs globally by 2022, in a €7.4 billion "reinvention". The German DAX slipped 0.2%, while the UK FTSE 100 and the broad based STOXX Europe 600 both lost 0.1%.
US sharemarkets also lost ground overnight. Health Care stocks fell, after US President Trump’s recent statement about an upcoming executive order that would lower prescription drug prices. Boeing slipped 1.3%, after Saudi Arabian budget airline company, flyadeal, said it would not proceed with a US$5.9 billion order for the planemaker's grounded 737 MAX aircraft. By the close of trade, the Dow Jones fell 0.4%, the S&P 500 lost 0.5% and the NASDAQ slipped 0.8%.
US employment data released last week suggests the goldilocks run of the US economy is set to continue and could extend the cycle even further.
The unemployment rate has remained under 4% since April 2018, and June’s data remains steady at 3.7%.
An additional 224,000 jobs were created in June far exceeding the expectations of 158,000 new jobs.
The unemployment rate of 3.7% was an increase from the previous level of 3.6%, due to an increase in the participation rate, with an additional 334,000 people looking for work.
The US earnings season kicks off next week and should attract more attention than usual.
Earnings have been growing at a slower rate than previously, but growing, nonetheless.
The US economic cycle is nearing the end, but another solid earnings reporting season, following on from June’s employment data, could see it continue even longer.
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