Pre-Open Data
Key Data for the Week
- Monday – AUS – Retail Sales
- Tuesday – EUR – Consumer Confidence
- Wednesday – UK – Market Manufacturing PMI
- Wednesday – US – Current Account
- Thursday – AUS – ABS Business Conditions and Sentiments
- Thursday – UK – Bank of England Bank Rate
- Friday – CHINA – Current Account
Australian Market
The Australian sharemarket ended the week at a record closing high after its fifth week of consecutive gains. The ASX 200 added 0.1% in the day’s trade and 0.9% over the course of the week.
The Information Technology sector was the best performer, up 3.5%. Gains were led by buy-now-pay-later favourites, Afterpay and Zip, which added 6.5% and 9.9% respectively. Accounting software provider, Xero, lifted 3.1%, while Betmakers Technology re-couped recent losses to close the session 13.0% higher.
The major miners weakened the Materials sector, which closed 1.1% lower despite an increase in the price of iron ore. BHP lost 2.5%, while Rio Tinto and Fortescue Metals shed 0.6% and 0.8% respectively. Goldminers also fell; Northern Star Resource slid 2.4% and Newcrest Mining conceded 3.0%.
Energy shares weighed on the market, down 1.9% as the price of oil was weakened by a higher US dollar. Woodside Petroleum fell 2.2%, while Santos and Oil Search dropped 3.6% and 2.9% respectively.
The Australian futures market points to a 1.55% fall today.
Overseas Markets
European sharemarkets weakened on Friday to end its four-week winning streak. The Financials sector weighed on the markets; Barclays dropped 1.4% and ING Greop fell 2.3%, while Deutsche Bank lost 3.4%. A fall in commodity prices resulted in a 2.9% drop in the Energy sector; BP lost 4.0%, while Royal Dutch Shell lost 3.2%.
By the close of trade, the UK FTSE 100 fell 1.9% and the STOXX Europe 600 slipped 1.6% from record highs, while the German DAX lost 1.8%.
US sharemarkets fell significantly on Friday after posting their worst outing in months. Energy shares provided the worst performance on the market; Chevron lost 3.8%, while Exxon Mobil conceded 2.6%. Renewables were mixed; NextEra Energy lost 1.7%, while Tesla gained 1.1% and Enphase Energy added 2.4%.
The Information Technology sector also lost ground after the Federal Reserve commented they may raise interest rates sooner than previously expected. As result, investors took profits as Microsoft and Alphabet both lost 0.6%, while Apple shed 1.0%.
By the close of trade, the Dow Jones slipped 1.6% and the NASDAQ fell 0.9%, while the S&P 500 lost 1.3%.
CNIS Perspective
The financial world frets the return of inflation, as the effects of loose monetary policy, a post-pandemic shopping boom and a commodity ‘super-cycle’ have all led to this concern. However, over the past few weeks, prices of some raw materials have materially lost their gains for the calendar year as the parabolic price rises now look overdone. The lumber price in the US for instance is now 40% off the highs, as sawmills have been able to increase output to demand.
Chinese authorities last week pledged to release government reserves of industrial metals to tackle rampant speculation and shortages of copper, aluminium and zinc. This, in addition to warnings last month by Chinese policymakers to tackle hoarding, has seen copper, the metal anticipated to be under significant demand for the coming decade of electric vehicle adoption, fall 11% month to date.
One exception is oil, with market pundits expecting a return to US$100 a barrel, up from around US$70 today, thanks to a collapse in capital expenditure on new production.
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