Pre-Open Data
Key Data for the Week
- Monday – AUS – MI Inflation
- Monday – CHINA – Manufacturing PMI
- Tuesday – AUS – Current Account
- Tuesday – AUS – RBA Policy Decision
- Tuesday – EUR – Unemployment Rate
- Wednesday – AUS – Gross Domestic Product
- Thursday – AUS – Trade Balance
- Friday – EUR – Retail Sales
- Friday – US – Unemployment Rate
Australian Market
The Australian sharemarket climbed 1.2% on Friday to close at a record high and up 2.1% for the week. Local investors were optimistic despite Victoria entering the first day of its seven-day lockdown.
Mining heavyweights were the market leaders following a rise in the price of iron ore. BHP and Rio Tinto added 2.9% and 2.6% respectively, while Fortescue Metals slipped 0.7% after the company revealed costs to build its Iron Bridge magnetite project in Western Australia had increased over $1 billion and may take a year longer than expected to reach full production.
Commonwealth Bank gained 1.6% to close above $100 for the first time and lead the Financials sector higher. Westpac and NAB both added 1.4%, while ANZ rose 1.1%. Ahead this week, the RBA will decide whether to change the record low cash rate of 0.1%.
The REITs sector outperformed; Dexus Property Group, Goodman Group, Scentre Group and Stockland Corporation all added between 1.5% and 2.6%.
The Australian futures market points to a 0.08% rise today.
Overseas Markets
European sharemarkets closed higher on Friday, as the broad based STOXX Europe 600 added 0.6% to close 1.0% higher for the week.
Airbus and HelloFresh added 1.2% and 1.7% respectively, while German semiconductor manufacturer, Infineon, gained 2.4%. Luxury brand Moët Hennessy Louis Vuitton extended its recent rally, up 1.1%, as Chairman and CEO Bernard Arnault continues to purchase more shares with the company set to benefit from borders reopening and more retail spending.
US sharemarkets edged higher on Friday ahead of a long weekend holiday. Graphics processor manufacturer, NVIDIA, rallied 4.9% after the company released Q1 earnings and upgraded its Q2 guidance. Cybersecurity company Fortinet gained 1.0%, while data centre Digital Realty rose 0.9%.
Over the week, the Dow Jones added 0.9%, the S&P 500 gained 1.2% and the NASDAQ lifted 2.1%.
CNIS Perspective
E-commerce giant Amazon finalised its acquisition of legendary movie company MGM Holdings late last week. The deal, estimated to be US$8.5 billion, makes it Amazon’s second-largest acquisition after its US$13.7 billion purchase of Whole Foods in 2017. It will provide its streaming services access to a library of 4,000 films including the James Bond franchise and 17,000 TV shows. This is on the back of spending US$19 billion over the past two years on producing its own content and recently committing US$1 billion a season for an NFL streaming agreement.
This deal is particularly important with streaming TV leaders, Netflix, Disney+ and the forthcoming Time Warner/HBO/Discovery merger all spending billions of dollars on content. This is not including the likes of Apple TV, which doesn’t have the a large amount of subscribers, nor the deep content libraries, but has significant amounts of cash, somewhat like Amazon where they can run at a loss in an effort to attract users and build platforms.
We’ve been living in the golden age of video content, with an unlimited number of streaming services and seemingly endless choices. Up until now, the choices have also been cheaper than they should be. Companies have all been creating content at a pace far exceeding their cash flows as they fight for market share.
What has been interesting is the almost full circle away from traditional broadcast television to ad-free streaming services like Netflix, to streaming services that are free but ad-supported.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
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