ep 378 | The week ahead - It's OCR week! Will the RBNZ hike or hold?
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On Point with Craig's Investment Partners.
The information provided here is general in nature and it's not financial advice. It doesn't take into account your situation, objectives, goals or risk tolerance. All investments are subject to risks and none are guaranteed. Before you make any investment decisions, we recommend you contact an investment advisor. For more information about our services or to view the Craig's Investment Partners Financial Advice Provider Disclosure Statement, please visit our website which is craigsip.com. Welcome to On Point. I'm Mark Lister, Investment Director at Craig's Investment Partners, and I'll be talking about a range of topics including economics, portfolio strategy, investor education, and anything else that's happening out there in financial markets.
G'day team, hope everyone is well. Let's take a look back at last week across markets, then let's turn our attention to what's coming up in the days ahead. Global markets have started the third quarter of the calendar year on a positive note. The US market, the S&P 500, was up 1.8%. Japan was up 2.6%. That's the topics that I look at in Japan. Europe was up 2.7%, so some very strong gains from those two. The FTSE 100 in the UK up 1.6%. and emerging market equities were up 0.9%. Closer to home, it was a little more subdued than some of those other markets, the Aussie market and the local NZX50, both posting gains of 0.9% for the week. rates the u.s two-year treasury yield was a little changed the 10 year was up about 12 basis points that finished the week just below 4.5 percent here in new zealand our interest rates were a little bit higher too we saw the five year swap rate in the week seven basis points higher at 3.73 percent
Oil prices have remained subdued. US crude slipped another 0.7% last week, finished about $68, $69 a barrel, US dollars that is, which is almost 40% below the April peak, which was about $112 a barrel. So oil never went as high as some people feared. People were talking $150, $170 a barrel, never went that high. but markets are much, much, much more comfortable with it down around the $70 mark. So that has been a key reason why you've seen a bit more stability and some solid gains in recent weeks. Turning to some of the key releases, and there were a few big economic releases in the United States. We've got the Manufacturing ISM Index. ISM stands for Institute of Supply Management. This index came out for June, and it wasn't too bad.
It was slightly down from May levels, but it came in at $53.350. is your break-even level so if you're above 50 you're growing so that's pretty healthy uh the sixth consecutive reading above 50 it was new orders softened but they remain pretty strong employment improved and importantly the prices paid measure of this index was a key inflation indicator that fell quite sharply. It fell from 82-ish to 73. So that's a four-month low. So that's good news. The US economy in decent shape and inflation pressures easing, as you'd expect with oil having come down. We also had the jobs report in the United States, the non-farm payrolls report, very widely followed, one of the most important economic indicators, and it does tend to move markets.
because it's really important for the Federal Reserve, which means it's important for the path of interest rates. This came out for the month of June, and it was a little bit softer than expected. Non-farm payrolls rose 57,000. Forecasts were for a little more than 100,000. So that was actually the weakest in four months. We saw the unemployment rate in the US come back a little bit. It fell to 4.2%. So the reason it fell, even though you had a disappointing report, was that the participation rate came down a little bit. The participation rate, which is sort of a reflection of who's putting their hand up saying that they're interested in getting a job, and it does tend to reflect the likelihood that you'll be able to get a job successfully, that fell to 61.5%.
Now that's the lowest since 2021, which was during COVID,
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Chapters
3 chaptersSpeakers
1 identifiedMore from On Point
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