Pre-Open Data
Key Data for the Week
- Thursday – US – Gross Domestic Product increased to 4.3% in Q1 2021, from 1.9% in Q4 2020
- Friday – EUR – Economic Confidence
- Friday – UK – Retail Sales
Australian Market
The Australian sharemarket closed relatively flat on Thursday, as Victoria announced a seven-day lockdown to control the state’s COVID-19 cluster. Information Technology was the strongest performing sector, up 1.9%, followed by Materials, which gained 0.8%.
The Financials sector weakened 0.2%, as all major banks except ANZ closed lower. Westpac lost 0.7%, Commonwealth Bank gave up 0.6% and NAB slipped 0.4%, while ANZ added 0.1%. Insurers were mixed; Insurance Australia Group and NIB fell 1.4% and 1.5% respectively, while QBE Insurance gained 1.4%.
Strong gains among mining heavyweights lifted the Materials sector; Fortescue Metals rallied 5.0%, while BHP and Rio Tinto both gained 1.0%. Gold miners were weaker; Newcrest Mining fell 3.3% and Evolution Mining slipped 0.6%.
Consumer Staples fell 0.7%; Coles slipped 0.7% and Woolworths fell 0.3%. Horticultural company Costa Group shed 24.0% after the company expressed uncertainty about H2 2021 earnings at their AGM.
Gains among buy-now-pay-later providers boosted the Information Technology sector; Afterpay, Zip Co and Sezzle all closed 1.6% higher. Accounting software provider Xero gained 2.7%, while software company WiseTech Global gained 1.3%.
The Australian futures market points to a 0.81% rise today.
Overseas Markets
European sharemarkets were mixed overnight. Airbus rallied 9.2% after the company announced goals to expand production of jetliners, as the European travel industry begins to recover from COVID-19. The Financials sector enjoyed gains; Lloyds Bank lifted 3.1% and Barclays added 2.1%, while Deutsche Bank and HSBC rose 1.0% and 0.8% respectively.
By the close of trade, the broad-based STOXX Europe 600 lifted 0.3%, while the UK FTSE 100 and German DAX slipped 0.1% and 0.3% respectively.
US sharemarkets were also mixed on Thursday. The Information Technology sector weakened; Microsoft fell 0.9% and Apple gave up 1.2%, while Alphabet lost 1.3% and NVIDIA slid 1.4% despite beating Q1 earnings expectations. Financial services stocks were mixed; PayPal fell 0.7% and MasterCard gave up 0.2%, while ICICI Bank and PagSeguro Digital gained 1.1% and 1.6% respectively.
By the close of trade, the Dow Jones rose 0.4% and the S&P 500 lifted 0.1%, while the NASDAQ finished the session flat.
CNIS Perspective
Private capital expenditure data released yesterday shows a continued strength in business investment after a sharp drop in the first half of 2020.
Capital expenditure increased 6.3% for the March quarter, well above the 2.1% estimate and follows a 4.2% increase in the December quarter.
Business expenditure has been slower to bounce back when compared to household expenditure, however the data points to an encouraging sign the recovery in the business sector is gaining momentum.
Broadly speaking, business confidence is at a record high and there has been strong growth in profits, which should continue to underpin business capital expenditure over the remainder of the year and well into 2022.
Furthermore, private capital expenditure is an important input to GDP, and this upside surprise should provide a boost to the March quarter GDP figure due to be released next week.
The key takeaway is the recovery in business investment is picking up steam, which should lead to stronger economic growth ahead.
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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