26 Jun 2015
- Equity markets traded in line with changing developments in the Greek negotiations with their lenders, moving higher earlier in the week on progress made, before falling away as a stalemate seemed likely.
- The Australian share market got off to a good start before a sharp fall today, led lower by resource, energy and utility stocks.
- Chinese stocks rebounded from their worst weekly sell-off since 2008, whilst Japanese stocks rose to their highest level in more than 18 years.
- In local stock news, Sydney Airport announced its traffic performance for May, with a 1.6% increase in passenger numbers, led by international passengers. Inbound passenger growth from Asia remains strong with the Philippines, China and Hong Kong leading the way.
- High flying stocks Seek and Flight Centre were brought crashing back down to earth following poor earnings announcements. This is what happens when stocks are priced for perfection and investors extrapolate historical growth rates into the future.
- Westpac announced it was undertaking a partial sale of its shareholding in BT Investment Management by way of a share offer. Their stake in BTIM will fall to circa 30% in a move which benefits both companies.
- The Australian dollar was largely unmoved against the US dollar, trading around the 77c mark.
- Australian house price growth came in weaker than expected in the first quarter of this year, with annual growth at 6.9% versus 10.8% at the same time last year. The data showed a marked deceleration in momentum outside of the still strong Sydney market. Sydney house prices were up 3% in the quarter, whilst Melbourne, Brisbane and Perth were flat to negative.
- A fall in advertised job vacancies has put the jobs market back in the spotlight after recent improvements in the unemployment rate. The number of Australian jobs advertised on the internet fell to a ten month low in May, and was 3.1% lower than in April.
- New US home sales rose 2.2% in May from April. Sales were above expectations and are now at the highest levels in seven years.
- Revised US economic growth showed the economic slowdown in the first quarter was less severe than originally estimated.
- Greek debt/aid negotiations continue. The Greeks appear to have given up some ground agreeing to increase the retirement age and cut pensions. This has caused a ruckus within the leading Syriza party, putting the Greek PM’s power at risk at home. The Eurozone and the IMF don’t seem to be giving up ground, refusing to agree to debt restructuring and to drop the requirement for the Greeks to run primary budget surpluses.
- Following an official visit to Australia, the International Monetary Fund (IMF) recommended that the Federal Government borrow more money to invest in infrastructure, raise and broaden the GST, lower corporate tax, scrap stamp duty, and reduce tax concessions on superannuation and capital gains, in order for Australians to prosper once again. The IMF is correct. The problem is us voters, who will vote the government out at any whiff of the above measures.
- Australia will become a founding member of the China led Asian Infrastructure Investment Bank (AIIB), Treasurer Joe Hockey has announced. Australia will contribute $930m over the next five years, making it the sixth largest shareholder. The funds will be used to help finance infrastructure projects across Asia.
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