The Morning Report

Updated: Friday 25/06/2021.

GLOBAL MARKET WRAP

The S&P 500 rose 25pts overnight to close 0.6% higher at 4,266, as investor sentiment improved amid economic optimism after President, Joe Biden, announced a nearly $600 billion infrastructure package. The Financials sector was the strongest performer (+1.2%). The US 10-year treasury yield rose 1bp to 1.49%, while the USD Index is flat at 91.81 this morning.

Coronavirus update – The latest data from the World Health Organisation (WHO) showed the number of confirmed coronavirus cases was 179,241,734 rising by 398,737 yesterday. German Chancellor, Angela Merkel, said yesterday that Europe is “on thin ice” in its battle against COVID-19, as the highly contagious delta variant threatens to undo progress made in reducing infections.

US: Jobless claims came in at 411,000 in the June 19 week, above expectations of 380,000, however, slightly below the upwardly revised 418,000 claims in the prior week. The total number of claimants remained close to the pandemic lows reached earlier this month, as broader business re-openings boosted economic activity and demand for labour.

Personal incomes are expected to fall a further 2.5% in May, after plummeting 13.1% in April, while personal spending is expected to lift 0.4%, following April’s increase of 0.5%. The Michigan consumer sentiment index is expected to improve 3.6pts to 86.5 in June.

UK: The Bank of England left its benchmark interest rate unchanged at a record low of 0.1% during its June 2021 meeting, while an 8-1 vote was in favour of leaving its bond-buying programme unchanged, as widely expected. The central bank also reaffirmed it does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in achieving its 2% inflation target sustainably. Policymakers expect the economy to experience a temporary period of strong GDP growth following the relaxation of economic restrictions, after which it is expected to fall back.

Germany: The GfK consumer confidence index is expected to improve to -4 in July, up from -7 in June.

LOCAL MARKET WRAP

The ASX 200 fell 23pts yesterday to close 0.3% lower at 7,275, with the Health Care sector the weakest performer (-1.8%). The SPI Futures Index is trading 51pts higher this morning at 7,228. The 10-year treasury yield is flat at 1.57% and the AUDUSD rose 0.1% to 0.7583 this morning.

Coronavirus update – The total number of cases rose by 31 yesterday to 30,408, with 184 active cases and 21 locally acquired cases. NSW Premier, Gladys Berejiklian, is resisting growing calls for an economically damaging Melbourne-style lockdown as Sydney’s latest outbreak nears 50 cases and other states close their borders. Meanwhile, a police investigation into the limousine driver who sparked Sydney’s current coronavirus outbreak has expanded to include the company that employed him to drive international aircrews to and from Sydney airport. Questions are being asked as to whether a loophole in public health orders in NSW meant the driver was not required to wear a mask while working.

Afterpay Limited (APT) announced yesterday it is making its service available to select app customers at a number of merchants within the US, including Amazon, Nike and Target, amongst others, with the total list of merchants representing almost half of all US ecommerce volume. APT will use a one-time card to facilitate the purchase, while customers will enjoy all the same benefits of using Afterpay, including the ability to pay overtime without incurring interest charges. APT shares rose 6.2% to close at $130.50.

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