Originally published by Rivkin Securities
A late afternoon rally in US stocks brought the Dow Jones Industrial Average up to close with a gain of 1.65%. While this doesn’t fully erase Monday’s losses, it eliminates a significant proportion of them. Tech stocks managed to rally with Tesla (NASDAQ:TSLA) posting a 6% gain after having been beaten down in the last few days. Production of its new Model 3 vehicle is increasing although it is still missing targets. The so-called FANG stocks (Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Google (NASDAQ:GOOGL)) were all up around 1-2% although all of them are still down for the month.
The Reserve Bank of Australia met for its monthly interest rate decision yesterday and as expected decided to keep rates on hold at 1.5%. The board acknowledged some concern that certain funding rates (such as LIBOR) are increasing independently of the official cash rates. This is leading to increased short-term funding costs in Australia. It also reiterated its view that unemployment and inflation will gradually return to their target levels. Market expectations are for no change in Australian rates in the near future despite many of the other developed market central banks beginning their rate hiking cycles.
Gold prices fell overnight but continue to trade within its multi-month range of between US$1,310 and US$1,350 per ounce, currently at US$1,333. Gold has been getting safe haven flows as a result of the uncertainty of US policy actions and in particular, the trade tariffs that are being imposed by the US on the imports of other countries goods. These tariffs will ultimately have a negative impact on US economic growth.
Today, Australia releases its retail sales data for the month of February. Expectations are for an 0.3% increase following the prior month’s 0.1% increase.
Data Releases:
- Australia Retail Sales 11:30am AEST