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Morning Market Update - 12 October 2017

 

Pre-Open Data

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Key Data for the Week

Key economic data released this week:

  • Wednesday – AUS – Westpac Consumer Confidence – Consumer sentiment index rose 3.6%, to 101.4, in October. A reading above 100 indicates there are more optimists than pessimists.
  • Thursday – EUR – ECB President Draghi’s Speech
  • Thursday – EUR – Industrial Production
  • Thursday – US – Initial Jobless Claims

Australian Market

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The ASX 200 closed 0.59% higher yesterday, with every sector ending the day higher. The Information Technology and Consumer Discretionary sectors led the gains.

Within the Financials sector, Fund Managers found favour with investors. Platinum Asset Management led the gains, up 5.0%, while Janus Henderson finished the session 1.2% higher. Amongst the banks, Westpac was the strongest performer, ending the day up 0.71%.

Myer Holdings Ltd (MYR) announced the appointment of Garry Hounsell as Chairman, effective 24 November 2017. Hounsell was appointed to the Board on 19 September 2017, having previously served as Chairman of Spotless Group Holdings Ltd (SPO). MYR declined $0.01, to close 1.3% lower at $0.74.

The Australian futures market points to a 0.03% fall today. 

Overseas Market

The Dow Jones and S&P 500 each rose 0.18%, to set new record closing highs overnight. The NASDAQ gained 0.25% to also set a new record high.

Markets were mixed in Europe, Spain’s IBEX 35 rose 1.34% and the German DAX rose 0.17%, whilst France’s CAC 40 lost 0.02% and the UK’s FTSE 100 gave up 0.06%. The broad based STOXX Europe 600 ended the day unchanged.

CNIS Perspective

UK markets are factoring in a 90% chance of a 0.25% interest rate rise on November 2, which will be the first upward move in rates in over a decade. The UK central bank, the Bank of England (BoE), is signalling inflationary pressures as the catalyst for the move.

However, unlike the inflationary pressures that have seen higher interest rates in the US, which are being driven by stronger growth and demand, the UK inflationary pressures are coming from weaker supply and stagnant growth. The GBP is weaker which is also inflationary and the BoE sees inflation above its 2% target for the next three years.

The International Monetary Fund has noted the UK as a notable exception when it comes to economic growth, where its estimated growth rate of 1.70% has been left unchanged, while they have raised their estimates for the US, Euro and the World.

Fingers point to Brexit for most things in the UK these days, but the uncertainties created by Brexit have delayed investments, reduced labour supply and slowed economic growth. The unemployment rate has fallen, but that is due to a declining participation rate. It’s estimated 122,000 EU citizens have left Britain over the past 12 months, which is a hand brake on productivity.

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Contact Us

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


Disclaimer

The material contained in this publication is in the nature of general comment only, and neither purports, nor is intended to be advice on any particular matter.  Persons should not act or 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: Investment, CNIS, Market Update

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