Pre-Open Data
Key Data for the Week
- Monday – US – Chicago Fed National Activity Index declined in April to 0.2, from 1.7 in March.
- Tuesday – US – Consumer Confidence
- Tuesday – US – New Home Sales
Australian Market
The Australian sharemarket gained 0.2% on Monday in what was a mixed day of trade. Falling commodity prices led to large losses in the Materials sector, which is set to weaken the Australian Dollar. The Health Care sector rose 1.5%, as sector giant CSL lifted 1.8%, ResMed gained 3.5% and Cochlear added 1.7%. The Health Care sector generally benefits from a weakened Australian Dollar due to many of the major companies reporting in US Dollars.
In the Financials sector, Commonwealth Bank hit a record price of $99.16 during the day’s trade and closed the session 0.9% higher. Of the other major banks, Westpac climbed 1.3%, NAB rose 0.7% and ANZ lifted 0.6%.
The Materials sector was the main detractor in the day’s trade, after the Chinese Government announced they would attempt to lower the high-flying commodity prices to benefit their economy. As a result, BHP lost 1.8%, Fortescue Metals fell 4.2% and Rio Tinto conceded 2.2%.
Gold miners bucked the downward trend within the Materials sector to finish higher, as Northern Star Resources added 1.1% and Evolution Mining lifted 2.5%.
The Australian futures market points to a 0.3% gain today, driven by stronger overseas market.
Overseas Markets
European sharemarkets closed near record highs on Monday, led by gains in the Information Technology sector as semiconductor producers Infineon Technologies and ASML holdings added 0.9% and 3.1% respectively.
The major banks also enjoyed gains despite the Financials sector losing 0.2%; ING Groep added 0.4%, BNP Paribas lifted 1.9% and Barclays PLC gained 0.4%. The broad based STOXX Europe 600 climbed 0.1%.
US sharemarkets closed higher on Monday, with the Information Technology sector providing a 1.8% gain as inflationary fears eased. It was announced that Joe Biden’s US$1.9 trillion infrastructure deal is likely to be scaled back, lifting investor sentiment, as the 10-year Treasury bond hit a two-week low. By the close of the session, Microsoft added 2.3%, while Apple and Amazon both lifted 1.3% as investors rotated back into growth stocks.
Gains were also seen in the Financials sector; Goldman Sachs and Citigroup both lifted 0.5%, while JP Morgan added 0.6%.
By the close of trade, the Dow Jones added 0.5%, the S&P 500 gained 1.0% while the NASDAQ lifted 1.4%.
CNIS Perspective
Data out of the US this week should confirm the steady recovery of the world’s largest economy.
Of interest this week will be the release of the personal consumption expenditures price index (PCE) on Friday, which is expected to mimic the recent CPI report showing an upsurge in consumer prices during April. This time, however, the market seems prepared, with the annual PCE rate expected to lift from 1.8% to 3.0%.
The market almost wants the data to be good…. but not too good!. Weaker data could actually benefit equites if it reduces fears of higher inflation and interest rates.
Countering this however is any talk from US Federal Reserve representatives about tapering the current record level of stimulus.
Such comments will overshadow all economic data.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
Disclaimer
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