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Morning Market Update - 11 September 2019


Pre-Open Data

International Markets vs Australian Market

Key Data for the Week

Key economic data released this week:

  • Tuesday – AUS – Business Confidence and Conditions both fell in August. Confidence fell to 1 from 4, while Conditions also slipped to 1.
  • Tuesday – UK – Unemployment Rate fell to 3.8%, below expectations of 3.9%.
  • Wednesday – AUS – Consumer Confidence
  • Wednesday – US – Producer Price Index

S&P ASX 200 Last 12 Months

Australian Market

The Australian sharemarket fell 0.5% yesterday, with the Information Technology and Health Care sectors the worst performers; Afterpay Touch fell 4.1% and WiseTech Global slipped 6.9%, while biotechnology company CSL lost 2.7% and Sonic Healthcare slipped 4.1%, after both going ex-dividend.

The Financials sector finished positive, with the big four banks all posting gains; NAB led the gains, up 1.6%, Westpac added 0.9%, while ANZ and Commonwealth Bank both rose 0.1%.

The Energy sector was the strongest performer, benefiting from rising oil prices; Santos climbed 4.1%, Oil Search rose 3.8% and Woodside Petroleum added 1.9%.

The Materials sector was mixed; Rio Tinto slipped 0.3%, while BHP and Fortescue Metals rose 0.5% and 1.7% respectively.

The Australian futures market points to a 0.26% rise today, being driven by stronger overseas markets.

Overseas Markets

European sharemarkets rose on Tuesday, with the Energy and Industrials sectors the strongest performers. Lloyds Banking Group rose 3.5% and Deutsche Bank added 1.7% to help boost the Financials sector. By the close of trade, the broad based STOXX Europe 600 rose 0.1%.

US sharemarkets were mixed overnight, with the REITs sector the worst performer. The Technology sector was mixed; Apple rose 1.2% after the launch of new products and Alphabet eked out less than a 0.1% gain, while Microsoft slipped 1.1% and Facebook fell 1.4%.  Banks continued to rally to boost the Financials sector; Goldman Sachs rose 1.7%, JPMorgan added 1.3% and Citigroup gained 0.3%. By the close of trade, the Dow Jones rose 0.3%, while the NASDAQ lost less than 0.1%.

CNIS Perspective

Yesterday’s NAB Business Confidence and Conditions data suggests pessimism continues to plague the outlook for Australian businesses. Rate cuts and tax breaks are yet to improve the mood of businesses, who are taking their cues from a difficult operating environment and global uncertainty.

Businesses became more downbeat in August, according to the survey, with a 2 point fall in the Conditions index to +1, and Confidence falling 3 points to +1, both well below their long-term averages.

Businesses (particularly non-miners) have been reluctant to take advantage of the current low interest rate environment to increase investment, with the retail and construction industries still the largest drags on the results.

We would expect existing rate cuts and tax breaks will prop up consumer spending, and in turn, have a flow-on effect on businesses. However, any significant bounce is likely to be muted, with continued global uncertainty likely to weigh on sentiment.

Confidence and conditions both decline

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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