Pre-Open Data
Key Data for the Week
- Tuesday – EUR – Consumer Confidence
- Tuesday – US – Consumer Confidence
- Wednesday – AUS – Building Permits
- Wednesday – EUR – Consumer Price Index
- Wednesday – UK – Gross Domestic Product
- Thursday – US – Retail Sales
- Thursday – US – Initial Jobless Claims
- Friday – US – Unemployment Rate
Australian Market
The Australian sharemarket gained 0.5% on Friday to post its best weekly performance since the start of February. Gains were broad based, with Health Care the only sector to close weaker.
Telecommunications was the best performing sector, boosted by a strong session from Telstra (+2.4%), after the company announced they will delist from New Zealand's sharemarket in June after shareholder numbers on the nation’s register declined.
Materials and Information Technology stocks also posted solid gains; Fortescue Metals rose 3.8%, Rio Tinto increased 2.2% and BHP gained 0.4%, while Zip strengthened 2.9% and Afterpay added 0.4%.
The Financials sector was led by the big four banks, which closed mostly higher; ANZ lifted 1.0%, Westpac climbed 0.9% and NAB added 0.8%, however, Commonwealth Bank slipped 0.6%. AMP closed up 0.8% after the insurer resumed trading following the release of an update on the position of CEO Francesco De Ferrari, which revealed he will remain in the role despite earlier reports to the contrary.
The Australian futures market points to a 0.72% rise today, driven by stronger overseas markets on Friday.
Overseas Markets
European sharemarkets advanced on Friday on the back of mining stocks, with the world’s largest steelmaker, Arcelormittal, up 7.4%. Renewable energy giants Siemens Gamesa and Vestas Wind Systems rose 4.7% and 4.3% respectively, while industrial heavyweight CRH strengthened 1.4%. The UK FTSE 100 climbed 1.0% and the STOXX Europe 600 lifted 0.8%, while the German DAX jumped 0.9% after the nation’s IFO Institute Business Climate Index rose to a near two-year high.
US sharemarkets advanced on Friday, buoyed by optimism towards the ongoing vaccine rollout. Bank stocks rose following an announcement by the US Federal Reserve that they can resume buybacks and raise dividends from June; Citigroup (+1.8%), JPMorgan Chase (+1.7%) and Wells Fargo (+1.2) all gained in response.
Energy names strengthened 2.6% as crude oil prices rebounded, while Nike improved 3.4% after the company received a broker upgrade. By the close of trade, the NASDAQ gained 1.2% and the Dow Jones rose 1.4%, while the S&P 500 strengthened lifted 1.7%, to hit a record closing high.
CNIS Perspective
China's recent sharemarket performance illustrates to investors what happens when central banks ponder exiting stimulus programmes. The Chinese bellwether CSI 300 index is down 14% from a 13-year high reached in February, following increased concerns Beijing will tighten monetary policy, offsetting economic recovery optimism.
As China was first in and first out in terms of the pandemic, it reveals that the withdrawal of stimulus in an economy creates challenges, despite China having strong reasons to taper quickly. With a tighter grip on the pandemic and with predictions of a strong economic rebound, China’s GDP is expected to grow 8.5% this year.
Added to the sharemarket correction is the regulators' crackdown on fintech companies. China has produced some of the world’s most valuable technology companies such as Ant Group (owned by parent Alibaba), as cash has vanished from cities, replaced by mobile and QR-code payments.
Despite the central bank withdrawing liquidity provisions it hasn't stopped IPOs in Hong Kong raising US$16.4 billion in the first quarter of 2021, opposed to the US$1.8 billion in the first quarter of 2020.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
Disclaimer
The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication.
Cutcher & Neale Investment Services Pty Limited ABN 38 107 536 783 is a Corporate Authorised Representative of Cutcher & Neale Financial Services Pty Ltd ABN 22 160 682 879 AFSL 433814.
