26 Feb 2016
Markets
- The Australian share market fell on the back of falls in the Chinese stock market.
- Australian company reporting season has been reasonably good to date.
- China’s stock market tumbled as concerns arose internally regarding tighter liquidity and the fifth day of falls in the offshore currency.
- European stocks struggled on the back of commodity price pressures, disappointing earnings results and concerns regarding central bank support.
- In local stock news, Woolworths reported a weak result, reflecting challenges facing the supermarkets business and the exit of Masters. Brad Banducci, an internal candidate, was announced as the new CEO.
- Brambles reported a bumper half year result with sales revenue up 8%. Profit, after adjusting for currency movements, was up 10%.
- Medibank flagged a sharp increase in half year profit following a cost cutting drive with hospital operators. Policyholder numbers declined.
- Qantas reported an incredible profit of close to $1bn for the half year off the back of low oil prices and expanding margins. The board approved a share buy-back of up to $500m. Still no dividend.
- Ramsay Healthcare announced strong half year results with profit and earnings per share both up over 16% each. Group revenue was up nearly 25% and the company acquired a further nine hospitals in Lille, France.
- Flight Centre posted an increase in interim profit on the back of record global sales, but the company warned that slower outbound travel numbers from Australia (lower Australian dollar) and weak consumer confidence could hamper future results.
- The oil price received a boost as the drop in the number of US oil rigs boosted hopes that supply would be coming down. The oil price was also supported by rumours that Russia and OPEC would meet in March to discuss production cuts.
Economics
- Australian new private capital expenditure rose in the December quarter surprising the market which had expected a 3% fall.
- Australian wages grew at their slowest pace on record in 2015, with private sector wages growing more slowly than those in the public sector. Wage growth came in at 2.2% for the year, matching average inflation for the year.
- Construction work completed in Australia has fallen faster than expected in the December quarter as engineering work linked to the mining sector dries up. In contrast, residential building has lifted strongly, buoyed by low interest rates.
- US inflation was unchanged in January against expectations for small decline. Consumer prices were up solidly in the month, with inflation running at over 2%.
- US consumer confidence fell in February to a seven month low. Market volatility and concerns around the Presidential elections didn’t help.
- The Chinese central bank weakened the currency by the most in six weeks spooking markets.
Politics
- Donald Trump’s US presidential campaign received another boost after he won the Nevada primaries. Current polling puts him well ahead in Florida voting as well.
- Rumours are swirling that Prime Minister Malcolm Turnbull will call an early election, as early as June. Other talk centred on the government tightening the screws on capital gains tax and superannuation concessions in order to fund income tax reform now that a GST rise is off the table.
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