The Australian Share Market coming to lackluster finish to end the week as investors tread cautiously on making any substantial moves ahead of the much anticipated non-farm payrolls data out of the U.S on Friday evening. The market is looking for a number of 180,000 jobs to be added in Friday’s reading. This morning we had the U.S ADP Private sector data showing 172,000 jobs being added to the economy in June ahead of consensus. This is a good preview into tonight’s data which should come in close to expectations after a disappointing read of only 38,000 jobs added last month. Over the weekend also look out for important inflation data out of China, with the CPI data coming out with an anticipated reading of +1.8% year on year.
It was no surprise to see investors on the side line with so much uncertainty and much too digest with this week’s macroeconomic events. It was pleasing to see the market resilient and shrugging off the volatility overnight in crude oil & Iron Ore with the energy and resource sector holding up quite well despite a weak lead from commodity markets.
Market Turnover was well below average today. Heading into the close the market only turning over $2.6 billion, which is well below an average day and probably a reflection of both the school holidays taking fundies out of the market and uncertainty ahead of the payroll numbers. Withthe fall-out from Brexit still is a concern around the region and the election and it’s result still up in the air, it no surprise that investors weren’t willing to make any big plays today.
With Crude off 4.5% we anticipated some weakness for the sector. However, loses have been minimal with even gains in the likes of Woodside (+0.09%), Caltex (+1.20%) and Beach Energy (+2.74%).
The resource sector was doing very nicely despite spot Iron Ore off 1.1% overnight, BHP (+0.05%), Rio Tinto (+1.25%) and Fortescue (+1.04%) all continuing to trade higher. The sector continues it’s outperformance since the start of the year and a sector we see doing well in the short to medium term due to continued Chinese stimulus and production cuts amongst the miners.
The Financials gave back there gains from yesterday and as we have spoken about all week will continue to see pressure in the short term due negatives stemming from the election (Royal Commission) and potential for credit downgrades, while weakness again amongst device makers in the health care sector with Cochlear (-0.21%), Resmed (-0.94%) and Sonic Healthcare (-1.59%) all again in the red as they were yesterday