What happened in the past week?
- In the US, the Dow Jones index fell by 3.3 per cent after rising by 1 per cent per cent the prior week. The S&P 500 fell by 2.9 per cent (up 1.9 per cent the prior week). And the NASDAQ lost 1.9 per cent (up 3.7 per cent the prior week).
- In Australia over the week the ASX 200 fell by 0.6 per cent (rose 1.6 per cent the prior week) and the All Ordinaries fell by 0.8 per cent (up by 1.7 per cent in the prior week).
- The Reserve Bank Governor reiterated that the Bank is prepared to do “whatever it takes” to support the economy and workers.
- The weekly ANZ-Roy Morgan consumer confidence rating was stable at 97.5 points.
- The Commonwealth Bank ‘flash’ purchasing managers index for manufacturing rose from 44.0 to 49.8 in June with the services PMI up from 26.9 to 53.2. A reading above 50 indicates expansion.
- Job vacancies fell by a record 43.2 per cent in the three months to May. But in May alone, skilled vacancies rose 31.1 per cent. And SEEK job ad volumes lifted by 21.9 per cent in the fortnight ended June 21
- Jobs fell in 13 of the 19 major industry sectors in the three months to May, falling most in Accommodation and Food Services (down 293,100).
- Total household wealth (net worth) fell by 1.8 per cent to $10,991 billion in the March quarter from record highs set in the December quarter. In per capita terms, wealth fell by $9,982 in the March quarter to $428,585.
- A new report showed that regions close to capital city centres dominate the ranking of regions recording the biggest declines of average sales between May and January 2020.
- The budget deficit for the 12 months to May was a record $65.5 billion or 3.3 per cent of GDP.
- Qantas raised $1,360 million from institutional investors with another $500 million to be raised from retail shareholders. The airline also announced that around 6,000 jobs would be cut.
- Bain Capital has emerged as the sole bidder for Virgin Australia.
- Trading updates included those from Woolworths and Transurban
Some key points from recent economic & financial events:
- Investors are concerned about a lift in COVID-19 cases, especially in some US states
- Wealth eased in the March quarter but it is rebounding as share prices grind higher
- Job vacancies continue to lift as businesses re-open
- Activity in manufacturing and services sectors is lifting from historic lows
Some key economic & financial events ahead:
- End of financial year
- June home price data
- Retail sales, building approvals & international trade
- US jobs data
- Speech by Reserve Bank Deputy Governor
- Testimony by US Federal Reserve chair and Treasury Secretary
Published by Craig James, Chief Economist, CommSec