Market Report with Paul Wareing - March 09, 2017

Written on the 9 March 2017

The Australian stock market was fairly subdued last week despite a strong rebound in Gross Domestic Product numbers (+1.1%) for the fourth quarter.  This strength was a contributory factor to the Reserve Bank leaving interest rates unchanged yesterday.  Any attempts to push the market higher were thwarted by profit taking in some mining stocks, this despite continued strength in iron ore prices.

In the US a well received more "presidential" tone from Mr Trump as he addressed a joint sitting of Congress was somewhat undermined by a lack of detail on fiscal stimulus. This perhaps hints that it is not a major priority for the President with his repeal/reform of Obamacare a more pressing issue. Unlike our own Reserve Bank the US look pretty much odds on to raise rates next week. Once again, a positive week for the US with stocks, the dollar and bond yields all rising.

The aforementioned "more presidential" tone from The Donald didn't last long at all with accusations of illegal bugging in Trump Tower being launched at Mr Obama. The markets have been fairly tolerant of Mr Trumps' erratic tweeting but one must question how long this will continue.

Looking ahead, in the US all eyes will be on the payroll data on Friday with consensus looking for a solid gain of 200,000 jobs. Given the recent strong run in equities and the lack of clarity around policy it will be interesting to see how the US market moves this week.

Locally, the sell off in the resource sector has been interesting given the strength in commodity prices and may herald the return of some buying activity.  On the data front the NAB Business Survey will be monitored to see if the strong data for January continues into February's numbers. Any strengthening in the US dollar will likely see weakness in the Aussie

Paul Wareing
Investment Adviser
Barclay Wells Ltd
41 Carnarvon St Broome
0411 809 104
paul@barclaywells.com

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