The Australian share market has had its worst day in three weeks with the financial and energy sectors weighing heavily as analysts await economic clues from the US and China. The benchmark S&P/ASX200 index finished 26.1 points, or 0.41 per cent, lower to 6,359.5 points at 1615 AEST on Monday, while the broader All Ordinaries slipped 23.6 points, or 0.36 per cent, to 6,449.6 amid thin volumes. Data out of China later this week will be significant to watch, and the US Fed meeting will be particularly important, something we might feel the impact of here.
The domestic energy sector suffered a 0.74 per cent drop after US President Donald Trump pressured the Organisation of the Petroleum Exporting Countries to raise crude production to ease petrol prices at the weekend.
Santos, Woodside Petroleum, Oil Search, Origin Energy and Beach Energy were down between 0.4 per cent and 1.24 per cent.
All four major banks were lower as all but CBA prepare to release their first-half results over the next week, dragging down the heavyweight financial sector by 0.6 per cent. ANZ was down 0.26 per cent to $27.33, Commonwealth was down 0.45 per cent to $75.11, NAB was down 0.9 per cent to $25.44, and Westpac was down 0.58 per cent to $27.58.
The relatively small property trusts sector was the biggest loser in percentage terms, dropping 1.76 per cent. In materials, mining giant BHP was up 0.59 per cent to $37.82, Rio Tinto was up 0.13 per cent to $97.75, and Fortescue Metals was up 0.83 per cent to $7.25.
In overseas markets, the S&P 500 set an intraday record high on Monday, bolstering the view that the decade-long bull market has further to run after consumer spending rose in March and inflation data was benign. The benchmark index topped its intraday record of 2,940.91 hit on Sept. 21, rising to a session high of 2,949.52. The S&P 500 is now up more than 17% for the year to date. The index along with the Nasdaq posted another record close as well on Monday.
What this means for you:
The day to day market movements in different industries and also around the world can give all of us reason to become distracted by short term news headlines. And while it's important to be aware of the broader economic environment, a more fundamental issue is to stay focused on your investment objectives and follow through with those in a disciplined manner. Markets will move up and down, leaders will come and go, but a few core elements remain:
1. Investing needs to be for the long term - if you don't want to hold an investment for 10 years, don't bother holding it at all
2. Diversification will help to smooth your investment ride over the years ahead
3. People who create wealth over a long period of time always spend less than what they earn, and they invest what's left over wisely.
Remember we're only a phone call or email away if you'd like to discuss any of these ideas in more detail.