Pre-Open Data
Key Data for the Week
- Tuesday – AUS – RBA Meeting Minutes revealed the Board is focused on inflationary pressures and decisions from other central banks.
- Wednesday – EUR – Trade Balance
Australian Market
The Australian sharemarket gained 0.6% yesterday, in what was the first trading session following the Easter break. Increased commodity prices were again the reason for the uplift, and most sectors closed the session higher.
Despite the price of lithium easing from recent highs, lithium producers continued their stellar run. Lake Resources was the best performer, up 13.9%, while Core Lithium and Liontown Resources added 9.1% and 1.8% respectively. The major miners all gained; BHP rose 1.3% and Rio Tinto added 0.9%, while Fortescue Metals closed the session 0.6% higher.
All of the major banks closed the session higher, as NAB, ANZ and Westpac all lifted 1.2%, while Commonwealth Bank rose 0.5%. Fund Managers experienced mixed performances; Magellan Financial Group added 1.0%, while Australian Ethical Investment dropped 0.3%.
In company news, chemicals manufacturer, DGL Group, jumped 8.3%, after the company announced it is expected to exceed previous expectations and provided increased guidance for the 2022 financial year.
The Australian futures market points to a 0.62% gain today.
Overseas Markets
European sharemarkets lost ground overnight, as further developments between Russia and Ukraine dampened investor sentiment. The Health Care sector weighed on the indices, as AstraZenaca lost 0.6% and Bayer dropped 1.3%. However, the Energy sector rose; BP added 0.5% and Royal Dutch Shell lifted 1.9%.
By the close of trade, the UK’s FTSE 100 shed 0.2% and the STOXX Europe 600 conceded 0.8%, while the German DAX slipped 0.1%.
US sharemarkets enjoyed gains on Tuesday, as most sectors finished higher. The Information Technology sector rose; Amazon added 3.5% and Netflix lifted 3.2%, while Google’s parent company, Alphabet, closed the session 2.0% higher. Electric vehicle and charging station providers also finished stronger; Tesla gained 2.4% and ChargePoint Holdings was up 7.3%.
The Financials sector continued to strengthen as investors prepare for further rate rises. Goldman Sachs and Bank of America both added 1.8%, while JPMorgan Chase rose 2.1%. Charles Schwab lifted 2.6%, after being heavily weakened in the trading session prior. The company recently reported a softer quarter, with revenue weaker than expected.
By the close of trade, the Dow Jones added 1.5% and the NASDAQ increased 2.2%, while the S&P 500 closed the session up 1.6%.
CNIS Perspective
First quarter data of the Australian economy shows an interesting shift in household income and spending.
Labour market data shows aggregate hours worked fell 1.3% over the quarter, while the wages index rose 0.7% meaning real wages fell 0.6%.
Consumer spending however is up solidly, which suggests households have dipped into their war chest of savings to fund their spending habits.
In fact, they have done even more than that, with principal loan repayments increasing as well.
Budget stimulus will no doubt boost household free cashflow.
However, history shows this can be eaten up quickly and as we enter an era of higher inflation, higher interest rates and political uncertainty. It will be interesting to see whether a lift in precautionary saving resumes, as we have seen in the past.
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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