15 Mar 2013
• The Australian market looks set to finish down for the week in the order of 1.3% with the resource sector being the main detractor.
• This is largely followed the poor data released in China over the weekend relating to slowing growth industrial production.
• Commonwealth Bank of Australia set a new all-time high closing above $70 per share for the first time. Whilst the company continues to do well, it looks as though the stock might have run a bit ahead of itself.
• Woolworths also hit all-time highs whilst National Australia Bank announced their IT plans, $800m of cost reductions, and management reshuffles (all internal). Myer reported strong results.
• The US share market continues hitting all-time highs yet again, with the market registering a record of 10 straight positive days in a row, not seen since November 1996.
• Australia’s GDP (ie. the economy’s growth rate) rose by 3.6% in 2013, marking 21 consecutive years of growth.
• Australian business conditions weakened in February even as the economy has started to show encouraging signs (eg. aussie home buyer sentiment, home loans, retail sales).
• Unemployment remained steady in Australia with the total number of jobs created in February surprising everyone (on the positive) – 71,500 versus expectations of around 10,000. However, numbers appear to be a little rubbery, especially when you consider 65% of the new jobs created were attributable to male part time jobs.
• US employment data is continuing to look more positive, however, planned job cuts by US companies was up 7% on a year ago. In addition, US productivity fell at 1.9% annual rate in the December quarter – the biggest annual decline in 4 years.
• Both the European Central Bank and the Bank of England left their key bank rates on hold.
• The Eurozone economy continues to remain fragile, especially in the South – Cyprus is now on the agenda (country and bank bailouts to follow).
• European interest this week was focused around Rome as the Italian parliament reconvenes for the first time following the stalemate election a couple of weeks ago.
• On the local front, it’s been a busy week for the Australian government with new policies flagged – clamp down on approval process for coal-seam gas and coal mining projects; clamp down on 457 visas (affecting the mining workforce); wide ranging changes to media laws; and new regulation to ensure penalty rates of workers are completely protected - most have not been well received in the press or by the markets.
• The Libs were re-elected in WA by an even greater majority. Some news out that PM Gillard’s visit just prior to the vote may have made matters worse for WA Labor.
• The Northern Territory also has a new leader as the current leader was deposed whilst he was on an overseas trip….either poor timing on his part, or excellent timing on the new leader’s part!
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