22 May 2015
- Australian stocks fell as bank, resource and energy stocks all pushed lower.
- The US share market pushed through new highs again this week as poor US economic data is putting pressure on the Fed not to raise rates.
- European shares pushed higher as the Euro fell, further helping exporters. Investors also grew more hopeful that a deal will be struck between Greece and its creditors.
- Asian stocks pushed higher, led by Japanese stocks breaking through a 15 year high, helped by a stronger US dollar (lower Yen) and solid earnings from Japanese firms. Chinese and Indian stocks also pushed higher.
- In local stock news, South32 listed on the ASX at $2.13 following its demerger from BHP. The stock initially fell on selling pressure from non-committed receivers of the stock before rising strongly over the week. The BHP share price adjusted downwards as expected.
- Rio Tinto has put its Australian Pacific Aluminium division up for sale again amid tentative signs of an upturn in the global aluminium market and on significantly improved earnings last year. The division owns smelters in Australian and NZ. The assets were acquired as part of the disastrous US$38bn Alcan acquisition.
- Sydney Airport announced its traffic performance for April with a new record reached of over 4.5 million international passengers in the year to date. Domestic growth was also solid.
- The oil price finished flat for the week. Initially it edged lower after Saudi Arabia posted its highest level of monthly exports in nearly 10 years, before pushing higher on reports of weak oil inventories in the US.
- Australian consumer confidence shot up to its highest level in more than a year, supported by the May Federal Budget and the RBA’s most recent cut.
- US housing starts rose 20% in April from March, coming in well above expectations, with new residential construction projects now at the highest level since 2007. The rise was fuelled by a big rise in apartment starts.
- US industrial production fell a worse than expected 0.3% in April from March levels. The decline was driven by a 14.5% drop in oil and gas drilling activity.
- Consumer confidence in the US fell in early May according to a key survey. The reading was sharply lower than the level seen at the end of April and well below expectations.
- First quarter Eurozone economic growth rose 0.4%, the best pace since the second quarter of 2013. Germany rose slower than forecast whilst France rose faster than forecast.
- Retail sales growth in China continued to decelerate in April, falling to 10% on the same time last year, which is the slowest since 2006. The figures are a little suspect given significant Chinese retail spending is done abroad.
- Savings worth $2.4bn are set to pass the Senate after Labor announced its support for five major budget proposals from the Abbott government. Labor has also indicated they will consider supporting the pension asset test.
- The Greek government has indicated that it won’t be able to repay $2.1bn to the IMF on June 5 without an aid deal in the next few days. The deal, if reached, will unlock a $10bn plus tranche of bailout funds. Issues over pension reform, taxation, deregulation of the labour market, and the re-hiring of 4,000 form civil servants are yet to be resolved.
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