21 Aug 2015
- Markets globally were hit by concerns regarding China and slowing global growth more broadly.
- The Greeks also called snap election as PM Tsipras unsurprisingly resigned.
- Emerging market equities slid to their lowest level since 2009 and the US market suffered its biggest daily fall in more than 18 months.
- Chinese stocks fell sharply again as positive reports on the stabilisation of the Chinese housing market fuelled concerns that further government stimulus might not be forthcoming.
- European corporate reporting season is nearing completion with more than 58% of companies beating estimates, whilst more than 37% have missed.
- In local stock news, Asciano released a solid full year result and also confirmed that they agreed to be acquired by Brookfield for $9.15 per share, in cash and stock. The result saw revenue down but net profit after tax up 19% on cost cutting and efficiency gains.
- Stockland Group has posted a strong lift in full year profit. Profits rose nearly 10%, whilst revenue was up closer to 20%. Earnings came in 8% higher.
- The Australian Stock Exchange (ASX) reported a strong lift in full year revenues, with new listing activity and an increase in the number of corporate actions assisting.
- Wesfarmers announced a $2.44bn net profit after tax, down on last year’s result, but with strong earnings improvements from Bunnings and Coles.
- Origin Energy released its full year result posting a solid net profit after tax of $682m, in line with expectations. The company also announced that they will eliminate 800 jobs by financial year 2017 to cut costs by $200m.
- Oil prices fell to their lowest levels in six years on concerns that global demand may decline further as economic growth slows. However, US oil stockpiles continued to fall for the third straight week.
- US industrial production was up in July from June levels, and also came in above expectations. Producer prices were also up. All supportive of a September interest rate rise.
- A key US manufacturing index fell to its weakest level since April 2009, hurt by the rising US dollar and by the slowdown in global economic growth. This may mean that the global economy isn’t strong enough to withstand a US rate rise.
- US consumer sentiment fell slightly in early August, but came in ahead of expectations.
- A key US home builders sentiment index reached a level not seen since November 2005. In addition, housing starts for July came in above expectations and at an eight year high.
- Italian and French economic growth figures for the second quarter disappointed, whilst German figures were reasonable.
- Japanese second quarter growth also contracted as households cut back on spending and global demand for Japanese exports dwindled.
- Eurozone finance ministers approved an 86bn euro bailout for Greece. The country will receive 26bn euro in the first tranche of the bailout, and of this, 16bn will be used to pay back the IMF.
- The Greeks are headed for another election after PM Tsipras announced the resignation of his coalition government after just seven months in office. The move is aimed to shore up public support for the country’s bailout package, with Tsipras hoping he can be returned to power in a new Coalition government.
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