Pre-Open Data
Key Data for the Week
- Friday – UK – Nationwide House Prices
- Friday – AUS – Producer Price Index
- Friday – EUR – Consumer Price Index
Australian Market
The Australian sharemarket rebounded 1.3% on Thursday, after all sectors closed ahead except Telecommunications (-0.1%). The market was pushed higher by the Materials (3.5%) sector, with BHP (4.4%), Rio Tinto (3.5%) and Mineral Resources (4.8%) being key contributors.
In company news, Fortescue Metals Group surged 8.1%, after it reported iron ore shipments in the third quarter were up 10% year on year and upgraded its FY2022 guidance. Furthermore, Pilbara Minerals closed up 3.5%, despite its report that production had eased, the tight labour market had led to staff shortages and shipments fell ~25% due to port delays. Meanwhile, Coles was 0.6% higher, after it posted a 3.6% uplift in quarterly sales.
AMP was the best performer in yesterday’s session, up 13.2%, after news it agreed to sell Collimate Capital, its international infrastructure equity business, to DigitalBridge Group Inc. The deal will see AMP receive $699 million.
The Financials sector performed modestly on Thursday, as most major banks closed in the green. Westpac and ANZ both rose between 0.6-0.7%, while Commonwealth Bank inched 0.2% higher and NAB was relatively flat.
The Australian futures market points to an increase of 0.68% today.
Overseas Markets
European sharemarkets pushed higher on Thursday, as positive earnings results encouraged investors and eased concerns about slowing economic growth. A key reporter in the session included Volvo Cars (8.0%), after its profit beat analyst forecasts as demand for its products remained strong. Meanwhile, major oil company TotalEnergies (3.7%) reported positively, unsurprising given elevated global oil prices in recent months, and announced plans to buy back an additional US$2 billion of its own shares by the end of June. By the close of trade, the STOXX Europe 600 lifted 0.6%, the UK FTSE 100 rose 1.1% and the German DAX advanced 1.4%.
US sharemarkets advanced on Thursday, after all sectors closed in the green, led by Information Technology (4.0%). Technology mega caps were important contributors in the session, as Microsoft (2.3%), Apple (4.5%), Alphabet (3.8%) and Netflix (5.8%) posted solid gains. However, Meta Platforms was the star performer, up 17.6%, after it reported revenue was 6.6% higher and daily users rose above expectations to 1.96 billion. These results were important as the stock had fallen almost 50% this year, as investors were increasingly concerned Facebook had lost steam. Other notable movers included ecommerce companies Visa (3.1%) and Amazon (4.7%). By the close of trade, the Dow Jones (1.9%), S&P 500 (2.5%) and NASDAQ (3.1%) all climbed higher.
CNIS Perspective
The US economy’s latest scorecard, GDP growth, the broadest measure of economic activity, was released overnight and showed a decline at an annualised rate of 1.4% between January and March, an abrupt reversal of the prior year's strong growth.
It was a marked slowdown from the 6.9% annualised pace of growth recorded in the December quarter of 2021 and the worst performance since the pandemic recession in the June quarter of 2020.
A number of factors contributed to the contraction, including rising Omicron infections, which hampered business activity, the Russian invasion of Ukraine, which increased energy costs and a growing trade deficit. What is interesting to note though is that consumer spending, which accounts for two-thirds of GDP, held up fairly well for the quarter, rising 2.7%, which reflects higher inflation feeding through to higher prices.
The GDP decline likely won’t change the immediate outlook for the Federal Reserve's monetary policy, with futures markets fully pricing a 0.50% increase next week, but all eyes will be on the June quarter’s GDP result to see if the US record a second straight quarter of negative GDP growth, a technical recession.
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