Australia GDP Below Expectations

The Dow Jones and S&P 500 fell slightly overnight while the Nasdaq 100 closed up 0.45%. After a week of declines the Nasdaq was due for a rally with Tesla (TSLA) being one of the biggest gainers, climbing 3.2% on the day. The ASX 200 has been drifting lower over the past several days as it appears to struggle to break through the 6,000 level.   

The bitcoin rally continues with the price exceeding US$13,000 per coin overnight. This brings the year to date gain to 1259% while the debate continues to rage about the ultimate future of bitcoin. While the future of bitcoin is uncertain, the technology behind it, distributed ledger technology, holds significant promise. The ASX today announced that it will be replacing the CHESS system with a distributed ledger system after two years of testing a prototype of the system.  

Oil prices tumbled after the release of US inventory data showed that gasoline inventories had a huge increase last week although crude inventories actually had a large decline. WTI is currently at US$55.94, still up 6.9% for the year but down from the peak of approximately $59 reached in late November.

Yesterday Australia‚Äôs third quarter GDP was released, coming in slightly below expectations at 0.6% although the prior quarter was revised up by 0.1%. The year on year growth rate was 2.8% which is a reasonable growth rate although under the hood the weak household spending is a concern. Today the Australian trade balance data will be released for the month of October which is again expected to be a surplus as coal and iron ore exports have provided a boost to the balance.  

Data Releases:

-    Australia Trade Balance 11:30am AEDT 

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This article was written by William O'Loughlin - Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via william.oloughlin@rivkin.com.au or by phoning +612 8302 3633.

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