Markets
Local and global equity markets moved higher this week, buoyed by better-than expected US retail sales figures.
In local stock news, Bendigo and Adelaide Bank shares rose after the company announced the appointment of former Suncorp bank CEO David Foster as its next chair. If the ANZ / Suncorp bank tie-up fails, a tie-up between Bendigo and Suncorp bank might be on the cards.
Australia’s biggest private hospital operator Ramsay Healthcare and their Malaysian partner have shortlisted candidates for the sale of their southeast Asian hospital unit which is expected to fetch about $1.5 billion.
The High Court upheld a Federal Court ruling that Qantas’ sacking of 1,600 baggage handlers, cleaners, and ground staff early in the pandemic was unlawful, in more bad news for the company.
Viva Energy shares fell after 16% of the stock ($714 million) was sold down by major shareholder Vitol, as they look to reduce their stake in the company.
Global oil prices jumped to a near 10-month high this week on a tighter supply outlook and OPEC optimism on the resiliency in energy demand. OPEC is forecasting world oil demand will rise by 2.25 million barrels per day in 2024.
Economics
Australian employment rebounded in August, as expected, with a lift of 64,900 coming in well above forecasts. The growth was driven almost entirely by part-time employment. The unemployment rate remained steady at 3.7%, helped by a record high participation rate.
The National Australia Bank’s monthly business survey showed that conditions had improved in August, despite the broader slowing economy. Business confidence also rose.
The Westpac-Melbourne Institute consumer sentiment index slipped further in September, with families reporting their finances are under intense pressure. Consumer sentiment continues to languish at deeply pessimistic levels. Consumer confidence also fell.
The US consumer price index rose 0.6% in August from the prior month, the fastest pace in more than a year. However, higher gasoline prices were responsible for more than half the increase with core prices rising a more modest 0.3%, slightly above expectations, taking the annualised reading to the lowest since September 2021.
US retail sales lifted by 0.6% in August, coming in well above expectations. Though, the July figure was revised down.
US economic data showed consumer credit increased by US$10.4 billion in July, well below expectations, and the second smallest monthly increase since November 2020.
US consumer inflation expectations for the year rose to 3.6% in August from 3.5% in July, coming in above expectations. It was the first increase in five months.
The European Central Bank raised interest rates by 0.25%, its 10th in a row, taking rates to an all-time high of 4% as the bank continues its attempts to bring inflation under control.
German annual inflation eased from 6.5% July to 6.4% in August, in line with expectations. Annual Spanish consumer prices rose by 2.6% in August, up from 2.3% in July.
Britain’s economy contracted in July at a faster pace than expected, with strikes in hospitals and schools and weather reducing output.
The Bank of Japan governor said an end to the country’s negative interest rates was possible.
Chinese inflation data was weak again, with the consumer price index rising by 0.1% in August, after falling 0.3% in July, whilst producer prices fell by 3% in August from a year earlier.
Chinese credit data showed new bank loans rising more than expected in August, possibly signaling that the government’s stimulus efforts are beginning to have some effect.
Politics
Indonesia has lifted its ban on Australian live cattle imports, while calling on Australia to tighten inspections to ensure the shipments are free of disease.
The Albanese government secured support for its $10 billion housing investment fund that aims to build 30,000 new homes over the next five years.
The European Union is launched an investigation into Chinese subsidies for electric vehicles in a bid to ward off a flood of cheap imports. The move will invite retaliation by the Chinese.
Weekly market updates are written by Chris Lioutas. Chris is on the board of Peer Wealth X Futuro Investment Committee. View LinkedIn
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