Originally published by Rivkin Securities
After opening higher, the Dow Jones faded throughout the session to eventually close down 0.5% and it was an almost identical story for the S&P 500. Tesla (NASDAQ:TSLA) shares were particularly hard hit, closing down 7.2% as Wall Street is becoming concerned that demand for the Model 3 isn’t as strong as once thought. TSLA just reached its production target of 5,000 cars per week however no new orders have been added to the backlog according to wall street analyst Gordon Johnson.
Oil prices continue to push higher, particularly for WTI crude. Overnight a headline from Al Jazeera that Saudi Arabia has agreed to pump more oil caused a sharp drop in the price but it subsequently recovered most of the losses. Higher oil prices are feeding into higher petrol prices which is starting to cause some angst for politicians, particularity US president Trump, who has been putting pressure on Saudi Arabia to increase production and keep a lid on prices.
The Reserve Bank of Australia kept rates on hold at 1.5% yesterday as widely expected. The statement expressed concern about rising wholesale bank funding costs that are coming despite any official interest rate change. Concern about a strong Australian dollar has been removed from the statement which is not surprising since the Australian dollar is now near 1.5-year lows. Today Australian retail sales and trade balance data is due to be released. Retail sales are expected to climb 0.3% for the month of May which would be just slightly lower than April’s 0.4% rise. The trade balance is expected to show a healthy surplus of $1.2bn which is similar to the monthly surpluses from earlier in the year.
Data Releases:
- Australia Retail Sales 11:30am AEST
- Australia Trade Balance 11:30am AEST