Pre-Open Data
Key Data for the Week
- Tuesday – EUR – Markit Manufacturing PMI declined to 54.4 in May, from 55.5 in April.
- Tuesday – UK – Markit Manufacturing PMI slowed to 54.6 in May, from 55.8 in April.
- Tuesday – US – New Home Sales slumped 16.6% in April, as higher interest rates and worsening affordability weigh on sales.
- Tuesday – US – Markit Manufacturing PMI was 57.5 in May, down from 59.2 in April.
- Wednesday – US – FOMC Meeting
Australian Market
The Australian sharemarket eased 0.3% on Tuesday, as the Information Technology sector lost 3.0% to weigh on the market.
Lithium miners were amongst the best performers, as Allkem lifted 3.7%, Pilbara Minerals added 3.2% and hybrid iron ore and lithium miner Mineral Resources gained 1.7%. The other mining heavyweight companies were mixed, as Rio Tinto added 0.9% and BHP lost 0.1%.
Qantas lost 1.5% after the company announced its purchase of a 51% stake in online travel business TripADeal, which boasted bookings of over $200 million pre-COVID.
The Financials sector closed stronger, as the big four banks all rose between 0.2% and 1.0%, led by NAB.
The Australian futures point to a 0.1% rise today.
Overseas Markets
European sharemarkets closed lower on Tuesday, with the broad based STOXX Europe 600 down 1.4%. Financial stocks outperformed as Barclays rose 3.2% on the commencement of a £1 billion share buy-back. Meanwhile, Air France dove 20.6% after the company launched a €2.3 billion share sale.
US sharemarkets also fell overnight as technology shares weighed on the market. Social media company Snap plummeted 43% after the company warned it will miss revenue and earnings estimates and cautioned of a broad slump in digital advertising. Technology heavyweights Alphabet, Amazon, Apple, Netflix and Facebook’s parent company Meta Platforms all fell between 1.9% and 7.6%, as the NASDAQ is now down 28% for 2022.
NVIDIA (-4.4%) is set to report earnings tonight, while investors also await the minutes from the Federal Reserve’s previous FOMC meeting. By the close of trade, the Dow Jones rose 0.2%, while the S&P 500 fell 0.8% and the NASDAQ lost 2.4%.
CNIS Perspective
Contrasting economic conditions in the US and Europe is illustrated in the US Dollar/Euro exchange rate.
With the US Federal Reserve aggressively raising interest rates to try and cool rising inflation versus an economic sapping energy crisis in Europe, the USD has strengthened significantly against the Euro.
For the first time in twenty years, it looks likely the USD and Euro could reach parity this year - that's one USD buying one Euro.
There have been a few close calls over the years, but right now there's just a 5% disparity between the two.
Amongst other things, it makes Europe a more affordable travel destination for US residents.
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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