The change of leadership in Canberra won’t have any impact on financial markets today – they remain focused on the Fed meeting in Washington and by the latest wobble in China’s markets.
Yes Malcolm Turnbull has a far stronger and more informed understanding of the markets, shares etc (having worked in the markets and been a board member and chair of a listed company), but the looming possible Fed monetary policy change is a bigger drawcard.
Our market will start with a 15 point fall after wall Street closed a touch lower. Our dollar was around 71.30 US cents in early Asian trading, oil was less than 1% lower and gold was a touch higher.
But those market moves were all hesitant and misleading – not until we know the Fed’s decision will the markets return to being accurate. In the meantime, China’s wobbles are back in focus.
The Shanghai Composite dropped 2.7% yesterday, but the tech-heavy Shenzhen Composite plunged 6.7%. For both this was the worst performance since August 25.
Those woes infected the rest of the globe – apart from the Dax, other markets in Europe were weak (a combination of the Fed’s looming decision and China) and that spread to the US.
So Wall Street ended in the red with the S&P 500 losing 8.02 points, or 0.4%, to settle at 1,953.03. The Dow lost 62.13 points, or 0.4%, to 16,370.96, and the Nasdaq Composite closed 16 points, or 0.3%, lower at 4,805.76.
In Australia, the ASX 200 closed 0.5% or 25.4 points higher to 5096.5. The All Ordinaries was up half a per cent or 24.1 points to 5120.5.
So while the business establishment, especially in Sydney, will like Malcolm Turnbull’s ascension to the leadership, the reality is that he and his government will be as much a hostage to outside events as Tony Abbott and his government was.
But at least Turnbull will grasp that fact and understand it, unlike Abbott and Joe Hockey who simply struggled to comprehend anything financial or business related.
