Pre-Open Data
Key Data for the Week
- Tuesday – AUS – Dwelling Prices lifted 0.6%, the slowest monthly growth rate since March 2020.
- Tuesday – EUR – Markit Manufacturing PMI was lower to 58.2, down from January’s result of 58.7.
- Wednesday – AUS – Gross Domestic Product
- Wednesday – EUR – Consumer Price Index
Australian Market
The Australian sharemarket added 0.7% yesterday, as investors remained optimistic that federal banks would not raise rates further until there was more certainty over the conflict in Ukraine.
The Information Technology sector was the best performer on the market, up 5.7%. Afterpay’s parent company, Block, soared 12.8%, while buy-now-pay-later competitor, Zip, shed 6.3% after the company announced it would raise capital to acquire Sezzle. Artificial intelligence provider, Appen, added 8.1%, while bookmaker, Pointsbet Holdings, jumped 17.5%.
The major miners weighed on the Materials sector, as it closed 0.3% lower, however, lithium miners enjoyed stellar performances. Alkem, previously known as Orocobre, added 7.0%, while Pilbara Minerals lifted 3.3% and Core Lithium closed the session 7.1% higher.
The Energy sector closed higher, boosted by a 15.0% jump in Yancoal. The coal mining company reported a full-year profit, aided by the increased coal prices. Oil producers enjoyed gains; Woodside Petroleum lifted 0.5%, while Beach Energy gained 1.0%.
The Australian futures market points to a 0.70% fall today, driven by weaker overseas markets.
Overseas Markets
European sharemarkets lost ground overnight, as investors weighed up what impact the sanctions on Russia will have on the economy. The Travel and Leisure sector lost ground; Lufthansa shed 7.7%, easyJet lost 8.8% and Airbus dropped 9.3%. By the close of trade, the STOXX Europe 600 lost 2.2% and the German DAX dropped 3.9%, while the UK’s FTSE 100 conceded 1.7%.
US sharemarkets also closed lower on Tuesday, as the Financials sector lost ground. As a result, Goldman Sachs and JP Morgan both shed 3.8%, while Charles Schwab conceded 7.8%. The Travel and Leisure sector was also lower in the US, given the rally in oil prices. American Airlines lost 5.6%, while Ryanair dropped 10.8%.
By the close of trade, the Dow Jones lost 1.8%, while the S&P 500 and NASDAQ both closed the session 1.6% lower.
CNIS Perspective
It was inevitable Australian housing prices will cool off eventually, given higher interest rates are looming, and yesterday’s housing data confirms this.
Dwelling prices rose just 0.6% in February, which is the slowest monthly growth rate since March 2020.
The pace of growth has been moderating over 2021, with the annual growth rate slowing to 20.6% in February, suggesting the peak, in November 2021 of 25.8%, is likely behind us.
Dwelling price growth slowed across all major capital cities in February. However, differentials in price growth continues to be linked to affordability, as the smaller, more affordable capital cities outperform.
In Sydney, where affordability is most stretched, dwelling prices declined 0.1% in February, led by a 0.3% fall in unit prices and a flat result for houses.
Borrowers are obviously reading the tea leaves and foresee higher interest rates on the horizon.
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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