Certainty around a number of key market events is increasing as investors look to year end. Stronger industrial data in the US reinforces a December rate rise. Weak but not too weak inflation data in Australia suggests a steady interest rate environment. And the first major bank annual report this morning points to maintenance of higher dividend pay out ratios.
Both US manufacturing and services PMIs released this week are above forecasts, and firmly in expansionary territory. Under these conditions the US Federal Reserve is almost certain to lift rates in December. Market reaction may be muted due to the strong signalling from the Fed.
The National Australia Bank reported a 95% drop in net profit after write downs related to the sale of its UK businesses. However, underlying cash earnings rose 4%, and the NAB dividend matches previous. These factors could see investors supporting the share price today, despite the poor headline.
Energy stocks are in focus after oil prices slumped. The falls came despite a draw on US inventories, suggesting underlying weakness. This may see local energy stocks swing lower.