Stocks globally continued to rally since Trump’s surprise victory, though investors will now be looking for details on how many of his campaign promises will become reality.
In local stock news, CSL had a win with reports that its new drug is safe and assists to reduce the incidence of recurrent heart attacks.
Telstra has flagged a review of its capital allocation policy (how it spends its money) over the next 6-12 months. In particular, TLS is considering the best use of its one-off NBN payments ($5bn over the next 4-5yrs) and recurring payments around $1bn.
Oil prices were up this week, helped by renewed optimism that OPEC will be able to reach a consensus on production cuts.
The rising US dollar pushed the Aussie dollar lower this week as investors bet on a US central bank rate rise in December and continued to digest Trump’s potential policies being inflationary.
Australia’s 3rd quarter growth in wages disappointed and points to softer inflation and spare capacity in the labour market, a key concern for the RBA. Wages are now growing at less than 2%, the lowest ever recorded, and labour data is showing continued weakness.
The average house price growth for the five mainland Australian state capitals is 8.5% through the year thus far. At the same time, auction clearance rates averaged 77.5%, compared with 62% a year ago.
US central bank chairwoman Janet Yellen hinted that an interest rate increase could come relatively soon in her testimony before the government. We think December is likely.
A key US consumer sentiment survey rose - a positive for future consumer spending, which accounts for more than two thirds of the US economy.
In other US data, jobless claims fell to their lowest level since 1973, inflation rose solidly in October, and construction on new houses rose nearly 26% in October.
Chinese industrial production and fixed asset investment growth data was mostly stable. However, retail sales growth slowed from September.
India’s Prime Minister has stated that they will withdraw 500 and 1,000 rupee bank notes from the banking system. The central bank will issue new 500 and 2,000 rupee notes to replace them. The move is designed to curb corruption, counterfeiters and primarily to dredge up billions of rupees in the underground economy. After 50 days, the old notes will be worthless. The old notes are already no longer accepted by government authorities (railways, hospitals, public transport, airlines).
A leaked memo to a UK newspaper said a report commission by the UK Government found there was no strategic plan for Brexit. Hardly surprising.
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