Pre-Open Data
Key Data for the Week
- Tuesday – EUR – Consumer Confidence
- Tuesday – US – Consumer Confidence
- Wednesday – AUS – Building Permits
- Wednesday – EUR – Consumer Price Index
- Wednesday – UK – Gross Domestic Product
Australian Market
The Australian sharemarket fell 0.4% on Monday as reinstated lockdowns in Brisbane weakened investor confidence. Losses were broad based, with only the Materials and Industrials sectors closing higher.
The Information Technology sector was the weakest performer, down 2.8%. Artificial intelligence company Appen gave up 4.2%, while accounting software company Xero lost 2.4%. Buy-now-pay-later providers weighed on the sector; Zip Co shed 4.5%, while Sezzle and Afterpay fell 4.3% and 4.2% respectively.
Gains among mining heavyweights lifted the Materials sector, which closed 1.3% stronger. Fortescue Metals added 2.1% and BHP rose 1.8%, while Rio Tinto closed up 1.7%. However, goldminers were mixed; Evolution Mining fell 1.4% and Northern Star slipped 0.4%, while Newcrest Mining gained 0.2%.
The refloating of the Ever Given, the ship that blocked the Suez Canal for a week, resulted in weakness in the Energy sector following a fall in oil prices. Origin Energy and Beach Energy both lost 0.9%, while Oil Search fell 0.7% and Woodside Petroleum slipped 0.5%.
The Consumer Discretionary sector also underperformed, down 1.4%. Kogan gave up 4.5% and online homewares and furniture retailer Temple & Webster shed 1.3%, while Super Retail Group lost 3.2% and Wesfarmers slipped 0.7%.
The Australian futures market points to a 0.65% rise today.
Overseas Markets
European sharemarkets were stronger overnight, as the broad based STOXX Europe 600 gained 0.2%. The Financials sector was the weakest performer, weighed down by Credit Suisse. The investment bank tumbled 13.8% after it warned investors it may suffer significant losses from exiting positions as US-based hedge fund Archegos Capital defaulted on margin calls. Other banks also saw losses; UBS gave up 3.9% and Barclays eased 1.4%, while HSBC and Lloyds Bank fell 0.9% and 0.2% respectively.
US sharemarkets were mixed on Monday. The Energy sector was the weakest performer, down 1.3%. Chevron and ExxonMobil both slipped 0.5%, while Occidental Petroleum fell 2.8%. Financial services stocks also closed lower; PagSeguro Digital gave up 3.7% and PayPal fell 2.2%, while MasterCard slipped 0.9%. By the close of trade, the NASDAQ fell 0.6% and the S&P 500 eased 0.1%, while the Dow Jones lifted 0.3%.
CNIS Perspective
With JobKeeper finally coming to an end, it’s interesting to look at last week’s Australian Bureau of Statistics survey of Business Conditions and Sentiments run between 10th to 17th March.
The graph below illustrates the support measures that were being accessed by business and by employment size.
Notably;
• Close to 30% of firms accessed at least one measure of government support, with wage subsidies, including JobKeeper, the most widely accessed.
• 20% of small businesses accessed wage subsidies, while only 1% of them used the JobMaker hiring credit.
• Only 3% of businesses reported to have deferred loan repayments.
Wage subsidies have clearly played a critical role in Australia’s rather sound economic management during COVID-19.
How the economy performs without subsidies will now be the big challenge.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
Disclaimer
The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication.
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