Pre-Open Data
Key Data for the Week
- Monday – AUS – Retail Sales surged 8.2% in the December quarter.
- Monday – AUS – Job Advertisements declined 0.3% in January, down from a 5.8% fall in December.
- Tuesday – AUS – NAB Business Conditions and Confidence
- Tuesday – US – Trade Balance
Australian Market
The Australian sharemarket ended 0.1% lower yesterday, as it recovered from a 1.0% fall late in the trading day.
The Financials sector was the biggest laggard on Monday, as it lost 0.4%. ANZ dropped 1.9% after the company released a soft quarterly update. NAB conceded 1.2% and Commonwealth Bank lost 0.1%, while Westpac bucked the downward trend to close up 0.2%. Magellan Financial Group slumped 11.2% after CEO, Hamish Douglass, announced he would step down as Chairman and take a medical leave of absence.
CSL led the losses in the Health Care sector, as the company shed 1.6%. Australian Clinical Labs lost 1.4%, while Sonic Healthcare and Cochlear shed 1.1% and 0.7% respectively. ResMed dropped 0.7%, while Ramsay Health Care closed the session relatively flat.
The Materials sector helped ensure losses were limited, as mining heavyweights increased. BHP and Fortescue Metals added 1.2% and 0.9% respectively, while Mineral Resources closed the session 1.5% higher. Gold miners lost ground; Northern Star Resources dropped 1.8%, while Evolution Mining and Regis Resources both lost 0.6%.
The Australian futures market points to a 0.30% fall today.
Overseas Markets
European sharemarkets finished higher overnight, boosted by the Travel and Leisure sector. Lufthansa added 2.4%, while International Airlines Group and easyJet lifted 3.9% and 1.8% respectively. The Materials sector also enjoyed gains; Rio Tinto lifted 1.0% and Glencore added 0.9%. By the close of trade, the STOXX Europe 600 and the UK’s FTSE 100 added 0.8%, while the German DAX closed the session 0.7% higher.
US sharemarkets were mixed on Monday, weakened by the Information Technology sector late in the trading session. PayPal lost 3.7%, while Alphabet and Microsoft shed 2.9% and 1.6% respectively. Canadian-listed Bitcoin miners enjoyed gains, as Marathon Digital Holdings jumped 8.8% and Bitfarms added 8.6%. The Financials sector also lifted; Goldman Sachs rose 0.1%, while JP Morgan was up 0.3%.
By the close of trade, the NASDAQ fell 0.6% and the S&P 500 lost 0.4%, while the Dow Jones closed relatively flat.
CNIS Perspective
Retail sales volumes surged to a record 8.2% in the December quarter, taking sales volumes to their highest level on record, with the series dating back to 1983.
The spike in retail sales was in a large part due to pent-up demand following the reopening of NSW and Victoria, with consumers eager to spend.
Household saving buffers, low interest rates, and the fast rebound in the labour market also supported shoppers’ willingness to loosen their purse strings. Clothing, footwear & personal accessories recorded their highest quarterly growth on record, as did department stores, while cafés & restaurants sales also saw a significant bounce as dining out resumed.
With household spending key to Australia’s COVID recovery path, the figures lead themselves to a return to above normal GDP growth. Unemployment is expected to continue to fall to sub 4% over 2022, and wage and inflationary pressures are likely to continue to build, which will all add further pressure on the RBA to act on interest rates.
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