Last week saw the Australian market down with the ASX 200 index falling back below 6,000 points early in the week after disappointing leads from offshore. The market failed to recover throughout the rest of the week, impacted by weaker than expected economic data. Labour market data for October showed that the economy added 3.7k jobs comprised of a 24.3k increase in full-time employment and a 20.7k decrease in part-time employment. The unemployment rate, however, dropped to 5.4%, the lowest rate since February 2013. Wage growth rose modestly to 2.0% with the accommodation and food services industry recording the highest quarterly rise. Consumer confidence in November fell below the 100 level, indicating that pessimists outnumber optimists. The fall in consumer confidence could be attributed to the governments ‘citizenship saga’ as well as media coverage about the prospect of rising interest rates.

In markets, the best performing sector on the ASX 200 index was information technology and most other sectors were in the red. In company news, Santos was one of the best performers after receiving a non-binding and indicative takeover proposal from the Harbour Energy consortium at $4.55 per share. Santos rejected the offer as inadequate. Qantas Airways continued to weaken on concerns that higher oil prices may persist, increasing the carrier’s fuel bill. Fairfax Media spun off Domain Holdings which began trading this week with a market cap of ~$2.1 billion.

In global markets, Wall Street was higher despite some concern at the beginning of the week over the future of the U.S. tax plan. Late in the week, the House of Representatives passed the Republican tax bill with 227 votes in favour and 205 against. Equities reacted positively but the result was expected. Greater difficulty lies in the Senate where the Republicans hold a slim majority as well as there being a difficulty in marrying up differences in the bill between the House and the Senate.

European markets were lower as concerns over Brexit weighed on the outlook for growth in the region. An appreciation in the Euro currency also weighed on European stocks.

Asian markets were lower, weighed down by weakness in the price of crude oil falling from ~US57 to ~US55 a barrel. Disappointing Chinese economic data including industrial output and retail sales added to the weakness in equities. The Australian dollar was lower against most major global currencies this week and fell below US76c, helped by disappointing Australian economic data including labour market and wage readings.

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