Morning Report Thursday 15 October 2015
Do ‘strangers’ Westpac and US Wal-Mart imply bad news for local retailers?
Two significant pieces of non-related news crossed our Bloomberg screens over the last 24 hours that potentially do not bode well for Australian retailers, viz:
1. Westpac lifted interest rates on variable home loans for the first time in 3 years - importantly without any change in rates by the Reserve Bank of Australia (RBA).
2. Giant US retailer Wal-Mart disappointed the market with its forecasts for the coming years sending the shares tumbling 10% in the one day.
Westpac lifting its variable lending rate is a huge dent to the already faltering housing market and economy. Confidence in a market is critical and to abruptly stick a significant pin it like this has potentially significant ramifications.
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