Pre-Open Data
Key Data for the Week
Key economic data released this week:
- Monday – EUR – Industrial Production
- Monday – UK – Rightmove House Price Index
- Tuesday – AUS – RBA Meeting Minutes
- Tuesday – EUR – Gross Domestic Product
- Wednesday – UK – Consumer Price Index
- Wednesday – US – Retail Sales
- Thursday – AUS – Unemployment Rate
- Thursday – US – Building Permits
- Friday – AUS – Retail Sales
- Friday – UK – Retail Sales
Australian Market
The Australian sharemarket fell away throughout the session to close down 0.6% on Friday, after the Victorian Government announced the whole state would enter stage 4 lockdown for five days. Several states and territories imposed restrictions on Victorian residents in response to the news. Losses were broad based, with Telecommunications the only sector to end the session higher, while Energy and Industrials were the hardest hit.
Travel stocks came under selling pressure following news of the latest Victorian lockdown; Qantas dropped 4.8%, the airliner’s worst one day performance since 29 June last year, while Webjet and FlightCentre fell 3.9% and 2.7% respectively.
Baby Bunting slid 6.6% after the retailer decided not to provide future earnings guidance due to ongoing COVID-19 uncertainty. However, the company announced first half net profit and sales rose 55.0% and 17.7% respectively, as well as an increase to its dividend.
The Australian futures market points to a 0.55% rise today, being driven by broadly stronger international markets on Friday.
Overseas Markets
European sharemarkets reversed earlier losses to close higher on Friday. ING Groep NV strengthened 6.7% after the largest Dutch bank reported better than expected quarterly pre-tax earnings, while L’Oreal rose 3.0% to hit a three-month high, after the world’s largest cosmetics group forecasted a strong rebound in makeup sales. Volkswagen slipped 0.7% to weigh on German stocks, after the company reported a fall in January deliveries. By the close of trade, the UK FTSE 100 lifted 0.9%, the broad based STOXX Europe 600 rose 0.6% and the German DAX climbed 0.1%.
US sharemarkets also rose on Friday, with those sectors expected to benefit most from a US fiscal stimulus package and the re-opening of economies, Energy, Financials and Materials, amongst the better performers. Illumina soared 11.9% in response to better than expected Q4 earnings and revenue, while PayPal lifted 4.7% after they revealed at the company’s investor presentation the amount of active accounts is expected to double by 2025 and the current payment volume triple over the same period. Walt Disney slipped 1.7% following the release of the company’s latest earnings report, with average revenue per user a concern amongst investors. The Dow Jones gained 0.1%, while the S&P 500 and NASDAQ both rose 0.5% to hit record highs in the process.
CNIS Perspective
Like in all bull markets, we are seeing retail investors confuse luck with talent. While the young day trading Robinhood users and Game Stoppers might consider what they are doing as investing, the reality is it’s not. Rather it’s more like gambling, but with worse odds than at the casino. Studies have found that more than 90% of active day traders are unprofitable and mostly male. The free trading applications, along with 24-hour volatile cryptocurrency exchanges, have lured largely young men who generally have a high-risk appetite with their gamification of ‘investing’.
These ‘free’ trading applications are built to trigger dopamine impulses to get their users, not clients, to trade more often as that’s how they make their money, not on how successful or unsuccessful they are. Many will make small losses and will be fine, while others will have a horrendous experience and turn their back on financial markets for many years. Some will face much darker outcomes such as addiction.
What any successful seasoned investor will agree with, is the most important resource in investing is time. It is the most inflexible and valuable commodity. What time means in investing is compounding. The compounding, or growth of great investments over many years, is where real wealth can be created.
There are always dips along the way but staying the course and investing over a longer-term horizon is usually the best strategy.
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.
