29 May 2015
- The Australian share market pushed higher this week helped by a recovery in financial sector stocks and continued improvement in resource and energy stocks.
- The US equity market was weak following positive economic data and remarks from Chairwoman of the US central bank Yellen regarding things aligning for a rate rise this year.
- European equity markets struggled to make gains this week following a poor local election result in Madrid and mounting concerns regarding a lack of progress on the Greek debt negotiations.
- Japanese stocks broke through new all-time highs again as the Yen fell to its weakest level in nearly eight years.
- All other Asian markets fell, following strong falls in Chinese shares, as China’s sovereign wealth fund cut its stake in the country’s banks and as some suspect trading activity across a couple of companies saw concerns arise regarding market manipulation.
- In local stock news, AGL shares hit an eight year high after the group outlined a corporate strategy that includes $1bn of asset divestments as it looks to drive productivity and growth. A wind farm has been divested already, with net proceeds of $500m.
- The Australian dollar fell this week as the US dollar rose and as concerns escalated regarding worsening local economic conditions that might spur the RBA to cut rates further.
- Construction work done in Australia has declined at a faster pace in the March quarter, coming in below expectations, as the tail end of the mining investment boom weighs on activity. New private capital expenditure also fell further than consensus.
- A key small business index fell sharply in April from February, the worst result since early 2014. Interestingly, the survey was taken a month before the Government unveiled a raft of incentives for small businesses in the Federal Budget.
- Property is now larger than mining, home ownership or financial services, having almost doubled its contribution to Australian economic growth in the last decade. The property industry now directly employs 1.1m people, making it the second largest employer after healthcare and social assistance.
- US consumer confidence rose in May as did a key service sector index, showing improving underlying conditions in the economy.
- A key US 20 city home price index rose 5% in March from 12 months earlier. New home sales increased by 6.8% in April. At this sales pace, it would take 4.8 months to clear the supply of houses on the market. The results surpassed expectations.
- Social Services Minister Scott Morrison has told retirees hit by tougher pension rules that they must run down their super savings to maintain their incomes and can’t expect to pass on to their children large sums of cash accumulated with the help of generous tax concessions.
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