Strong Jobs Data Increases Chances of a Rate Rise – apparently! (MYR)
Jobs data announced this morning was the key driver in markets today with the unemployment rate unchanged at 5.6% however the composition of the number was strong with full time workers a bigger proportion of the change + we also saw an increased rate of participation which increased to 65.3% while unemployment also fell - full time workers beat expectations. A total of 54,000 jobs were added in the month, more than double that of forecasts, sending the Aussie dollar sharply higher - back over 80c against the USD.
Despite the stellar data, the market ended lower as traders bet on increased chances of an interest rate rise sooner than had been expected. Overall, the market had a range of +/- 23 points, a high of 5749, a low of 5726 and a close of 5739, down 5pts or -0.1%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
The switch from resources to banks continued today, only more driven by the strong jobs data as investors bought into the possibility of higher interest rates. BHP fell 1.79% whilst all the banks finished in the black, NAB the best performer at +0.75%.
NAB Daily Chart
BHP Daily Chart
Myer (MYR) reported its full year earnings this morning, a report that was closely watched with many predicting the downfall of department stores. The result, despite coming in at the lower end of guidance at $12mil, was taken reasonably well by the market and the stock ended up 1.39% higher, although it traded up as high as +6% during the day. The key was the decision to close 3 underperforming stores along with improving online sales in an effort to tackle the impending Amazon arrival. Despite being somewhat of a turnaround story, and the risk / reward of the trade looks interesting, the weakness in retail continues to have us somewhat gun shy.
Myer Holdings (MYR) Daily Chart
Have a great night
The Market Matters Team
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