The Australian market was higher last week as business and consumer confidence improved. The Westpac-Melbourne Institute consumer confidence index is at the highest level in a year and reflects a more upbeat view on the economic outlook by consumers. NAB’s survey of business confidence also improved, rising 2 points to +7 which is just above the long-run average. In market news, the best performing sectors in the ASX 200 index were consumer discretionary, utilities and information technology. The worst performing sector was materials which were impacted by a fall in the price of iron ore. In company news, Mantra Group was the top performer in the ASX 200 index after receiving a bid from Accor at $3.96 per share. AMP jumped after the wealth manager overhauled the equities business of its AMP Capital division, ditching its fundamental Australian equities strategies in favour of a focus on small caps and quantitative strategies. Rio Tinto dipped after initially scaling the $70 mark amid media reports it was considering selling it’s European aluminium smelter as well Australasian aluminium assets. Transurban, Australia’s largest toll-road group, confirmed interest in bidding for the WestConnex road when the NSW government sells down its stake to fund the final stage of the major project.
In global markets, Wall Street was mostly flat by the end of the week except for the Dow Jones. Despite the flat performance, the indices were hovering at record highs, particularly after the minutes of the Federal Reserve’s September meeting signalled a December rate rise was still on the cards. Economists and analysts were focused on contradictory remarks from the minutes. While Fed officials argued that low inflation is not just transitory, many other officials saw another rate rise as warranted this year. Wall Street banks turned in generally upbeat results as the third quarter earnings season got underway. Healthcare stocks were mixed after President Donald Trump signed an executive order directing federal agencies to consider expanding health insurance coverage in low-cost plans that aren’t subject to Affordable Care Act rules.
European markets were mostly higher but experienced some pressure during the week as ongoing political uncertainty in Spain outweighed positive sentiment seen in oil and individual stock news. Asian markets were mostly higher with the standout being the Nikkei 225 on expectations of stronger earnings growth and an improving economy.
Asian markets were mostly higher with the standout being the Nikkei 225 on expectations of stronger earnings growth and an improving economy.
The Australian dollar was mixed against major global currencies this week but managed to climb back above US78c. The U.S. dollar weakened against most major currencies as President Donald Trump’s feud with Senator Bob Corker clouded the outlook for his much heralded tax reform. The Euro strengthened after Catalonia’s President stepped back from declaring immediate independence from Spain. The country also maintained a hard line on Catalonia’s independence bid which supported the currency’s strength.