Pre-Open Data
Key Data for the Week
- Thursday – AUS – Unemployment Rate fell to 5.5% in April, from 5.7% in March.
- Friday – AUS – Retail Sales
- Friday – EUR – Consumer Confidence
- Friday – UK – Retail Sales
Australian Market
The Australian sharemarket rebounded strongly from Wednesday’s losses to close up 1.3% yesterday. All sectors except Materials closed higher, with Information Technology the strongest performer, up 4.3%. Buy-now-pay-later giant Afterpay jumped 7.7% and Zip Co lifted 5.0%, while accounting software provider Xero gained 4.1%.
Losses among mining heavyweights weighed on the Materials sector, which closed 0.4% lower. BHP gave up 1.1% and Rio Tinto lost 0.5%, while Fortescue Metals fell 0.1%.
The Financials sector was lifted by strong gains among major banks; Commonwealth Bank led the gains, up 3.2%, followed by ANZ which finished the session 2.0% higher, while NAB and Westpac added 1.6% and 1.4% respectively. Asset managers also posted gains; Challenger rose 1.4%, while Magellan Financial Group and Australia Ethical Investment both lifted 1.1%.
Property stocks outperformed; Scentre Property Group climbed 4.2% and Stockland added 3.4%, while Goodman Group and Dexus gained 2.3% and 1.8% respectively.
Qantas lifted 3.4% despite announcing an expected net loss of $2 billion for FY21. The airline has also offered voluntary redundancies for international cabin crew and introduced a two-year wage freeze for employees.
The Australian futures market points to a 0.38% rise today, driven by stronger overseas markets.
Overseas Markets
European sharemarkets posted gains overnight. Information Technology, which was the strongest performing sector, was boosted by gains among semiconductor companies; Infineon gained 3.4%, while Nordic Semiconductor climbed 9.8% after it was reported that rival company STMicroelectronics (1.4%) has been considering an acquisition of the company. Renewable energy stocks also advanced; Vestas Wind Systems added 1.9%, while Siemens Gamesa rose 1.5%. By the close of trade, the German DAX lifted 1.7%, while the STOXX Europe 600 and UK FTSE 100 gained 1.3% and 1.0% respectively.
US sharemarkets broke their three-day losing streak to finish the session higher on Thursday. The market was buoyed by strong gains among Information Technology heavyweights; Apple and Alphabet both lifted 2.1%, while Facebook and Microsoft added 1.6% and 1.4% respectively. Financial services stocks also closed higher; PagSeguro Digital climbed 5.0% and PayPal gained 2.8%, while MasterCard and Visa added 1.9% and 0.8% respectively. By the close of trade, the NASDAQ gained 1.8% and the S&P 500 rose 1.1%, while the Dow Jones added 0.6%.
CNIS Perspective
There has been a lot of talk over the past few months in regards to the potential impact on the labour market and the broader economy, from the conclusion of the JobKeeper program, which finished at the end of March.
Employment data released yesterday gave us the first insight into this, with the unemployment rate falling to 5.5% in April, from 5.7% in March. At a quick glance, it would appear the labour market has tightened, however the devil is in the detail.
The participation rate (the percentage of people who are currently employed or in search of a job) fell to 66.0%, from 66.3%. This is the primary reason the unemployment rate fell. If the participation rate remained unchanged, the unemployment rate would have actually increased to 6.0%.
However, April is typically a seasonally quiet month for job seekers given the Easter holiday period. Further, leading indicators on employment are still very encouraging and it is likely we will see more jobs created over the remainder of the year as a result of major infrastructure projects, which should see the unemployment rate continue to trend lower.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
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