12 Jan 2018
U.S equities breaking records daily
Markets
- The Aussie share market finished lower this week as investors took profits whilst bank stocks fell on no new news.
- The US equity market finished higher, continuing to set new all-time highs.
- Asian markets were up, with the exception of Japan, where the Yen rose (hurting exporters) on news the Bank of Japan may be changing policy settings.
- The market capitalisation of the US equity market has grown from US$7.6 trillion at the depths of the GFC (March 2009) to US$29.99 trillion currently.
- The latest data showed that there are 742 active US oil rigs (including shale), which is some 213 more than were operating a year ago. Higher oil prices plus rising economic growth has brought many rigs back on line.
- Oil prices moved higher, boosted by a surprise drop in US production, lower crude inventories, and rising Middle East tensions
Economics
- Australian residential building approvals surged by 11.7% in December, coming in significantly above market expectations which centred on a fall. Data was very mixed across the country.
- Job vacancies in Australia climbed to their highest on record in the 3 months to November, continuing a strong run of gains, which further supports a strengthening labour market. Job vacancies are now at their highest levels since the data series began in 1979, leaving vacancies 16% higher than a year earlier.
- Australian retail sales jumped 1.2% in November, coming in much stronger than expected. The data pushed the Aussie dollar higher. The strong gain was driven by household goods, with clothing, footwear and restaurants all seeing gains. Department store sales continued to fall.
- US job growth slowed and came in lower than lofty expectations, following a decline in retail employment. But a pickup in monthly wages shows the US labour market remains strong. 148,000 new jobs were added in December.
- Plenty of US central bank speeches indicate that the bank is happy with the pace of economic growth, believe employment is full, aren’t too worried about inflation, and are on track to raise rates 2-3 times this year.
- US consumer borrowing rose in November by the largest monthly amount in 16 years, the 3rd straight solid monthly gain. Consumer confidence is very strong, but the level of consumer debt is worrying at US$3.83 trillion and growing.
- Economic sentiment in the Eurozone is at its highest level since May 2000 and well ahead of consensus.
- UK consumer spending fell in 2017 for the first time in 5 years, not helped by the ongoing Brexit saga, the UK political mess, and rising inflation.
- China’s foreign reserves climbed for an 11th month in a row to US$3.14 trillion in December, as the government looks to rebuild its gargantuan reserves. However, recent reports have indicated that they may begin to pare back their purchase of US Treasuries.
Politics
- Germany has still yet to form government, however, Chancellor Merkel sounds more optimistic about reaching a deal with the Social Democrats and avoiding fresh elections.
- President Trump is expected to undergo his first medical check-up since taking office, as questions continue to build regarding his mental stability, following the release of a tell-all inside the White House book.
