Originally published by Rivkin Securities
Most of the major global stock markets closed on or near their lows overnight with the Dow Jones Industrial Average and S&P 500 down 1.2% and 1.5% respectively. The sell-off occurred gradually throughout the session, trending down in a relatively calm fashion. The cause of the sell-off may have been the terrorist attacks in Barcelona or speculation that President Trump’s chief economic adviser Gary Cohn may resign over Trump’s comments regarding the riots in Charlottesville. Although it’s unlikely Cohn will resign, the incident highlights the discord in the Republican Party at the moment that may affect the execution of Trump’s economic agenda.
The gold price held its ground overnight and may now be setting up for a run at $1,300.
Australia’s employment data was released yesterday which showed a higher than expected net employment gain of almost 28 thousand jobs although the unemployment rate remained steady at 5.6%. Relatively strong employment data over the past several months as well as a recovery in retail sales are data that the Reserve Bank (RBA) will consider hawkish but with inflation still below the bank’s target, an interest rate hike may still be some way off. The strong data will certainly place more pressure on the RBA to consider raising rates.
With reporting season underway, the big news yesterday was the dividend cut by Telstra (AX:TLS). Although most analysts expected a dividend cut, the market appeared to be shocked by the size of the cut with FY18 dividends expected to be almost 30% lower than the FY17 amount. The TLS share price closed down approximately 10% yesterday.
Following the overnight falls in US stock markets, ASX 200 futures are indicating a 0.9% fall on the open.
Data Releases:
No Significant Data