Morning Market Update - 13 May 2019

Pre-Open Data

International Markets vs Australian Market

Key Data for the Week

Key economic data released this week:

  • Monday – AUS – Home Loans
  • Tuesday – AUS – NAB Business Conditions & Confidence
  • Tuesday – EUR – Industrial Production
  • Tuesday – UK – Unemployment Rate
  • Wednesday – EUR – Gross Domestic Product
  • Wednesday – US – Retail Sales
  • Thursday – AUS – Unemployment Rate
  • Thursday – US – Housing Starts
  • Friday – EUR – Consumer Price Index

S&P ASX 200 Last 12 Months

Australian Market

The Australian sharemarket ended the final trading session of the week 0.25% higher, with Utilities and Telecommunications stocks among the best performing.

The big four banks closed mostly higher, with Westpac the strongest performer, ending the session 0.6% higher. Commonwealth Bank gained 0.3% and NAB added 0.1%, while ANZ slid 0.5%.

Mining heavyweights BHP and Rio Tinto gave up 0.5% and 0.1% respectively, while Sydney Airport and Telstra boosted Industrials and Telecommunications stocks respectively, both closing up 0.9%.

The Australian futures market points to a 0.46% rise today, being driven by stronger US markets on Friday.

Overseas Markets

European sharemarkets were generally firmer on Friday. The broad based STOXX Europe 600 rose 0.3% and the German DAX climbed 0.7%, however, the UK FTSE 100 slipped 0.1%.

US sharemarkets rebounded from lows earlier in the session to close higher on Friday. Investors remained optimistic a trade deal between the US and China would eventually be secured, despite new tariffs being imposed by the US on Chinese goods. US Treasury Secretary Steve Mnuchin said discussions between the nations were “constructive”, while Chinese Vice Premier Liu He said talks were progressing “fairly well”, although details were limited. President Trump reiterated “there is absolutely no need to rush” trade talks, stating the tariffs will bring in even more wealth to the US than a good deal would. 

Transportation network company Uber Technologies officially listed, ending its first trading session 7.6% lower. Despite being priced at US$45 a share, Uber opened at US$42, giving the company a valuation of around US$75.5 billion, well below the US$120 billion the company initially sought when it went public. By the close of trade, the Dow Jones and S&P 500 both lifted 0.4%, while the NASDAQ closed 0.1% higher.

CNIS Perspective

There’s nothing like a drawn out trade war between two key players to give volatility a little boost.

With the fallout from the end of 2018 dissipating, and reassurance from the US Federal Reserve that interest rates would be on hold for at least the major part of 2019, the Volatility Index (VIX) seemed set to nestle around the low teens for some time.

However, with the trade war dragging on, and President Trump adding fuel to the fire with a series of provocative tweets, we have seen volatility rise last week to just under 20, finishing the week at 16.

The sooner the trade discussions are finalised the better for a number of reasons.

From an investor’s perspective, a return to the 2017 days, where volatility hovered around 10 most of the year, would be a most welcome environment in which to be investing.

VIX since 1 January 2017 

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


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, Dow Jones, Australian Market, ASX, international markets

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