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Morning Market Update - 11 November 2019


Pre-Open Data

International Markets vs Australian Market

Key Data for the Week

Key economic data released this week:

    • Monday – UK – Gross Domestic Product
    • Monday – UK – Industrial Production
    • Tuesday – AUS – NAB Business Confidence & Conditions
    • Tuesday – UK – ILO Unemployment Rate
    • Wednesday – UK – Consumer Price Index
    • Wednesday – US – Consumer Price Index
    • Thursday – AUS – Unemployment Rate
    • Thursday – EUR – Gross Domestic Product
    • Friday – EUR – Consumer Price Index
    • Friday – US – Retail Sales
S&P ASX 200 Last 12 Months

Australian Market

The Australian sharemarket closed flat on Friday, as gains in riskier assets offset losses in defensive stocks.

Energy was the best performing sector. Origin Energy gained 2.1% and Santos rose 1.5%, while Woodside Petroleum climbed 2.0%, after increasing its estimate for dry gas reserves at its Scarborough gas field off the coast of Western Australia by 52%.

The big four banks were mostly stronger to lead Financials higher, with ANZ the strongest performer, closing up 0.5%. Global building materials company, James Hardie, continued to rally, ending the session 3.9% higher, after several brokers upgraded their price target on the company following a solid half yearly earnings result.  

Goldminers led the declines, accounting for the five weakest performers in the ASX 200, as the price of the precious metal dipped to a three-month low of under US$1,470/ounce. Saracen Minerals fell 8.3%, Regis Resources dropped 7.0%, Northern Star tumbled 6.6% and Newcrest gave up 4.6%.

The Australian futures market points to a 0.4% rise today, being driven by stronger US markets on Friday.

Overseas Markets

European sharemarkets broke a five-day winning streak, after US President Trump denied he had agreed to rollback tariffs on China, adding to the uncertainty of a US-China trade deal. Health Care and Utilities were the only sectors to close higher, as caution prevailed ahead of the Spanish elections over the weekend. The broad based STOXX Europe 600 fell 0.3%, the German DAX closed 0.5% lower and the UK FTSE 100 dropped 0.6%.

US sharemarkets lifted to record highs on Friday, as the US third quarter earnings season wound down and investors were undeterred over the latest US-China trade update. Walt Disney climbed 3.8% after reporting a 34% rise in third quarter revenue, while Zillow Group rose 12.3% after announcing sales had more than doubled in the third quarter from last year and reporting a better than expected loss. By the close of trade, the Dow Jones gained 0.1%, the S&P 500 lifted 0.3% and the NASDAQ climbed 0.5%.

CNIS Perspective

Overseas travel activity is an interesting economic indicator, but one that is considered more anecdotal than definitive.

However, some of the announcements last week from US online travel agencies certainly appear to have a degree of commonality and make sense given the current global economic environment.

Share prices tumbled after their results showed a decline in revenue growth, in addition to management raising concerns over their forward earnings outlook.

It makes sense that if money is tight at home, overseas travel would generally be put on the back burner until the household finances improve.

While overseas travel isn’t a recognised indicator, last week’s results nevertheless prompted a series of analyst downgrades.

Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.


Disclaimer

The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication.

Cutcher & Neale Investment Services Pty Limited ABN 38 107 536 783 is a Corporate Authorised Representative of Cutcher & Neale Financial Services Pty Ltd ABN 22 160 682 879 AFSL 433814.

 

Topics: CNIS, Australian Market, ASX, international markets

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