Pre-Open Data
Key Data for the Week
- Monday – CHINA – Trade Balance
- Tuesday – AUS – NAB Business Conditions & Confidence
- Wednesday – US – Consumer Price Index
- Wednesday – CHINA – Consumer Price Index
- Thursday – UK – Gross Domestic Product
- Thursday – AUS – Consumer Inflation Expectations
- Friday – EUR – Industrial Production
Australian Market
The Australian sharemarket finished 2.2% weaker on Friday, amid investor concerns over rising inflation. All sectors closed in the red, with Information Technology and REITs the worst performing sectors, following the RBA’s decision last Tuesday to raise the Official Cash Rate for the first time in over 11 years. Over the week, the local ASX 200 gave up 3.1%, its third consecutive week of declines.
All four of the major banks closed lower on Friday; NAB and Commonwealth Bank lost 2.0% and 1.3% respectively, while Westpac fell 0.7% and ANZ slipped 0.6%. Macquarie Group closed down 7.8%, despite reporting a 56% year-on-year jump in full year net profits and a 36% year-on-year increase in net operating income.
The Materials sector lost 2.0%, weighed down by losses amongst mining heavyweights; Rio Tinto fell 2.1% and BHP slid 1.4%, while Fortescue Metals finished the session flat. Gold miners were also weaker; Newcrest Mining gave up 1.7% and Northern Star Resources shed 2.5%, while Evolution Mining closed down 3.3%.
The Consumer Staples sector was the main outperformer, down just 0.2%. Supermarket giant Coles gained 1.0%, while Woolworths added less than 0.1%.
The Australian futures market points to a 0.72% fall today, following weaker overseas markets on Friday.
Overseas Markets
European sharemarkets declined on Friday. Property stocks weakened; SEGRO and Safestore gave up 6.6% and 5.0% respectively, while German real estate company Vonovia shed 4.5%. Oil stocks advanced; BP and Royal Dutch Shell both added less than 0.1%. Renewable energy stocks were mixed; wind energy producer Orsted gained 2.1%, while Siemens Gamesa Renewable Energy and Vestas Wind Systems slipped 0.4% and 4.9% respectively.
By the close of trade, the UK FTSE 100, German DAX and STOXX Europe 600 all lost between 1.5% and 1.9%.
US sharemarkets also weakened on Friday. The Health Care sector eased; Moderna lost 5.4% and Johnson & Johnson slipped 0.2%, however, Bristol-Myers Squibb and UnitedHealth Group bucked the trend to add 0.6% and 1.0% respectively. Technology majors declined; NVIDIA, Alphabet and Microsoft all fell 0.9%, however, Apple gained 0.5%. The Energy sector was the strongest performer, up 2.9%: ExxonMobil added 1.5% and Chevron gained 2.7%.
By the close of trade, the Dow Jones slipped 0.3% and the S&P 500 gave up 0.6%, while the NASDAQ lost 1.4%.
CNIS Perspective
US equity markets rose 3.0% last Wednesday after confirmation from the US Federal Reserve that the central bank wasn’t contemplating raising rates by more than 50 basis points at a time.
The S&P 500 went on to lose 3.6% the following day.
There have only been seven such reversals since 1971, two of which have now happened in the last two weeks.
Thursday also saw the 30-year US Treasury yield climb 16 basis points higher, to finish at 3.16%, implying a loss of 4.8% across the Treasury note’s term in one day of trade.
There have only been six instances in the past decade where 30-year bond yields have risen more than that.
This short-term volatility highlights a changing investment landscape, as markets continue to grapple with the real impacts of inflation, rising interest rates and supply shocks.
Should you wish to discuss this or any other investment related matter, please contact your Wealth Management Team on (02) 4928 8500.
Disclaimer
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