Pre-Open Data
Key Data for the Week
- Monday – AUS – MI Inflation jumped 4.0% over the year to March.
- Tuesday – AUS – RBA Cash Rate Decision
- Tuesday – US – Trade Balance
Australian Market
The Australian sharemarket added 0.3% yesterday ahead of the Reserve Bank of Australia’s monthly meeting. Gains were seen across the Materials and Energy sectors, while the Financials, Industrials and Consumer Discretionary sectors lost ground.
The Materials sector benefitted from talks regarding increased sanctions on Russia. The sector rose 1.0%, as Fortescue Metals added 3.0%, while Rio Tito and BHP lifted 0.3% and 0.1% respectively. Lithium producers continued their recent run of strength; Allkem jumped 7.3% and Pilbara Minerals added 5.5%, while Mineral Resources closed the session 3.4% higher.
The price of oil increased yesterday, as the Russia-Ukraine conflict continues to have an impact on commodity prices. Woodside Petroleum added 1.0% and Santos and Beach Energy both lifted 0.3%. As a result, the sector rose 0.6%.
The Financials sector lost ground ahead of the Reserve Bank’s interest rate decision, as a rate increase is not anticipated. Westpac and ANZ both shed 0.2%, while Commonwealth Bank and NAB both closed the session 0.8% lower.
The Australian futures market points to a 0.66% rise today, driven by stronger overseas markets.
Overseas Markets
European sharemarkets enjoyed gains overnight, as the Information Technology and Travel and Leisure sectors lifted the indices. International Consolidated Airlines added 0.4%, while Air France lifted 0.2%. ASML Holdings added 1.5% to lead the Information Technology sector, while Prosus jumped 4.8%. By the close of trade, the German DAX rose 0.5%, while the UK’s FTSE 100 added 0.3% and the STOXX Europe 600 closed up 0.8%.
US sharemarkets also rose on Monday, lifted by the Information Technology sector. As a result, Netflix added 4.8%, while PayPal and Amazon lifted 4.5% and 2.9% respectively. Cybersecurity providers enjoyed gains; Fortinet lifted 2.3% and CrowdStrike was up 0.5%. By the close of trade, the Dow Jones closed up 0.3%, while the NASDAQ lifted 1.9% and the S&P 500 added 0.8%.
CNIS Perspective
The first quarter of 2022 has come and gone, as we now head into reporting season to see how businesses have fared after a very eventful and volatile period experienced on the market.
Earnings season unofficially kicks off next week with America’s big banks announcing quarterly results.
According to FactSet, S&P 500 earnings are expected to grow 4.7% in Q1. If correct, this will mark the slowest earnings growth since Q4 2020, and is revised down from the 5.7% growth expected at the start of the quarter.
Despite the revision down, this growth is still expansionary, in the face of soaring inflation and geopolitical tensions weighing on both business and consumer confidence.
Inflation and supply chain pressures will likely dominate the earnings season narrative once again.
One thing will be key however, pricing power, with those companies able to pass on higher input costs and maintain margins through this tricky environment likely to benefit the most this reporting season.
Should you wish to discuss this or any other investment related matter, please contact your Wealth Management Team on (02) 4928 8500.
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