Originally published by Rivkin Securities
Large cap US stocks outperformed overnight with the Dow Jones closing close to flat while tech stocks were routed. The Nasdaq 100 fell 1.3% which included a 6.2% fall in Netflix (NASDAQ:NFLX) and a 6% fall in Twitter (NYSE:TWTR). In the case of Twitter, and the other social media companies, the market may be nervous about increasing government scrutiny in their business models as the Twitter CEO and Facebook (NASDAQ:FB) COO testified before Congress yesterday regarding use of their platforms for bullying as well as interference in US elections. In the case of Netflix, rumours of a planned new streaming service by Apple (NASDAQ:AAPL) have surfaced that has the potential to steal market share from Netflix.
Yesterday Australia’s GDP data was released. It came out significantly better than expected. The quarterly growth rate was 0.9%, compared to expectations for just 0.7%, and the annual growth rate was 3.4%. Furthermore, the prior quarter was revised up by 0.1% to 1.1%. While some of the underlying data is quite strong, such as 3% growth in household consumption, other data is pointing to potential future problems, such as the savings rate falling to just 1%. This means, on average, households are saving just 1% of their income which is far below the 10% rate that existed 10 years ago.
ASX 200 futures are down 25 points this morning and today Australia’s trade balance data will be released.
Data Releases:
- Australia Trade Balance 11:30am AEST