9 Oct 2015
- Share markets globally pushed higher as poorly received weak US data seemed to decrease the likelihood of an interest rate rise this year.
- The Australian market pushed higher on the back of strong gains in energy and resource stocks. Bank stocks also pushed higher.
- In local stock news, Macquarie confirmed that it will purchase the Esanda car dealer finance portfolio from ANZ bank for $8.2bn. The funding for the deal will come from existing funds, third party financing and a capital raising.
- Carsales.com has completed the acquisition of a 65% shareholding in a leading automotive classifieds website in Mexico. The acquisition is expected to have a positive impact on earnings over the medium to longer term.
- Woodside Petroleum has declared that their $11.6bn offer for Oil Search is a fully priced offer, indicating they are unlikely to raise their offer. They will need to raise it if they are serious about the takeover.
- The Australian dollar rose on the back of stronger retail data and a falling US dollar. The rise was also assisted by the RBA, who chose not to talk-down the dollar in their statement released after Tuesday’s interest rate meeting.
- The price of oil rose strongly as the number of working US oil rigs fell to a five year low. The US dollar falling also helped (given oil is priced in US dollars).
- The RBA made no change to the cash rate citing no real changes in data to warrant a move. They remain ready to lower rates if the economy weakens.
- Australian retail trade figures rose in August following a fall in July. The largest contributor to the rise was food retailing, with reasonable growth out of department stores for the first time in a while. Over the year, growth remains strongest in the household goods category.
- House prices nationally were up close to 1% on the same time last year. Melbourne was the biggest contributor whilst prices in Sydney remained unchanged.
- Australian building approvals fell close to 7% in August versus July. The fall was driven by the multifamily segment (apartments). Finance commitments to build or purchase new dwellings fell sharply in July. They have been falling since January this year.
- Australian job vacancies rose strongly, a fourth consecutive increase, with the annual growth rate at the fastest pace since February 2011.
- The US economy added only 142,000 jobs in September, well off the 200,000 jobs expected by economists. July and August’s reports were revised down by a combined 59,000 jobs. The unemployment rate remained steady at 5.1% with wages up 2.2% over the year.
- The US trade deficit widened, mounting pressure on US economic growth numbers which are released in the next quarter. Plenty of US consumption is happening abroad which is not helping the trade numbers.
- The Turnbull government is considering abolishing CGT on start-ups to encourage entrepreneurs without risking direct government investment in the high risk tech industry. The changes would cost the budget $50m over four years, but could increase to $30m a year thereafter.
- Trade ministers from 12 Pacific Rim nations sealed a major regional trade and investment agreement spanning 40% of the global economy. It is expected that the deal will open new markets for Australian services providers, manufacturers and farmers, and will lead to more seamless trade across the region, cut red tape for exporters and reduce business costs.
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