What Happened Today?

This story features WESTPAC BANKING CORPORATION. For more info SHARE ANALYSIS: WBC

By Max Ludowici, Equities & Derivatives Advisor, 708 Capital

A stronger than expected set of retail sales data gave our market strength intraday after a shaky opening. Whilst it wasn’t anything to get too excited about, the ASX200 finished in the green up 14 points or 0.3% to 4474 points. The light volumes across the board ahead of the big election in the US meant that it didn’t need much action to swing the market either way. Friday night was another evening of counter intuitive price action where rather than focus on the genuinely positive jobs print for October (171,000 jobs added vs expectations of 125,000), investors assumed this would result in less assistance from the Fed in its December bond purchasing program. Traders sold off the US markets and the USD rallied, bringing down commodities and gold in particular (down US$37.5 or 2.2% to $1,676/oz).

The strong retail sales data released around midday was a surprise to the market and gave traders some confidence, unsurprisingly most all Asian markets were lower across the board following Wall Street’s lead. Retail sales figures rose higher than expected to a seasonally adjusted 0.5% in September, ahead of analyst expectations of a 0.3% rise.

Westpac Bank ((WBC)), Australia’s second largest lender by market value underpinned our markets performance all day, closing up 32c or 1.28% to $25.35 as investors revelled in a surprise FY profit result showing 2H12 cash profit came in at A$3.4B vs consensus of A$3.26B, whilst still a fall of 15% from last year’s number, this was a positive result in a lower growth environment.

Questions marks about the health of our jobs market began to resurface however, after a closely watched jobs survey published today showed that companies had pulled job advertisements at the fastest rate in 18 months. Total job advertisements (print and online) fell 4.6% in October from Septembers read, a survey by Australia and New Zealand Banking Group ((ANZ)) showed. This only added to the ‘will they, won’t they’ debate about tomorrow’s rate decision as analysts often rely on this as a useful barometer for the health of our jobs market. Thursday’s official unemployment print will show whether things have changed from Septembers reading of 5.4%.

DOW futures are currently up 31 points.
 

This article produced at the request of and is published by FNArena with the expressed permission of 708 Capital.

708 Capital is a full service stockbroking and investment advisory firm. 708 offers investment and market advice to high-net-worth Private and Institutional clients in Australia and across the globe. 708's extensive network of contacts gives its clients exclusive access to ground-level fundraising opportunities and new company listings in a variety of small and large cap ASX listed companies. 708 has a longstanding track record of generating exceptional returns for its clients. Click here 708capital.com.au/contact-us/ for a no cost consultation and portfolio review or to learn more visit www.708capital.com.au. Note: 708 Capital offers wealth management services for Sophisticated and Wholesale Investors only. We cannot assist investors who aren’t classified as Sophisticated Investors or have verified assets over AUD$2.5m.

708capital is a holder of AFSL. No. 386279

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Disclosure of Interests: 708capital receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this 
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