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Morning Market Update -14 September 2018

Pre-Open Data

 International Market vs Australian Market

Key Data for the Week

Key economic data released this week:

  • Thursday – AUS – Unemployment Rate was steady at 5.3% in August, sitting at a six-year low.
  • Thursday – US – Consumer Price Index rose 0.2% in August, versus expectations for a 0.3% increase.
  • Friday – US – Retail Sales
  • Friday – EUR – Trade Balance

S&P ASX 200 Last 12 Months

Australian Market 

The ASX 200 closed 0.8% lower yesterday, led by losses in the Utilities (-2.2%) and Health Care (-2.1%) sectors. The big four banks all closed the session lower, while shares in Rio Tinto gained 1.7% and BHP managed to push up 0.7%. 

Myer (MYR) shares surged 37.4%, following a couple of broker upgrades and news CEO, John King has increased his stake in the retailer, buying 100,000 shares. This was a turnaround from the previous day, which saw MYR fall 4.6%, after announcing an annual net loss of $486 million for FY18. 

In company news, Capilano Honey (CZZ) beekeepers, which hold a controlling stake in the company, have given support to a takeover bid from China-focused private equity company Wattle Hill and its partner Roc Partners. Capilano's board has already endorsed the bid, which offers shareholders either $20.06 a share in cash or a one-for-one share swap. CZZ shares ended the session down 1.2% to $21.03.

The Australian futures market points to a 0.44% rise today, being driven by stronger US markets.

Overseas Market 

European sharemarkets were mixed overnight with Automotive and Financials the strongest sectors. The European Central Bank and Bank of England both left monetary policy unchanged, as widely expected. The German DAX gained 0.2%, while the broad based STOXX Europe 600 and the UK FTSE 100 fell 0.2% and 0.4% respectively.

US sharemarkets closed stronger on Thursday. China and the US remain open to the possibility of new trade talks, but President Trump said he felt no pressure to make a deal. Shares in Kroger dropped 9.9%, after the supermarket chain's same-store sales missed estimates. The Dow Jones, the S&P 500 and the NASDAQ all closed higher, up 0.6%, 0.5% and 0.8% respectively. 

Apple gained 2.4%, igniting gains across Technology stocks, with Twitter up 2.2% and Snap posting a 1.7% gain. However, Facebook bucked the trend to close down 0.6%.

CNIS Perspective 

Over the past 18 months, Australia has averaged around 30,000 new jobs a month and, along with other indicators like job ads and job vacancies, this indicates a reasonable pace is being set in the domestic economy.

An increase in the participation rate from 65.6% to 65.7% prevented the unemployment rate falling by any significant degree, but it still stands at 5.3%, which is a six year low. 

NSW and Victoria were the standout states, with Victoria’s unemployment rate now down to its lowest level in seven years.

Also encouraging was full time jobs growth, outpacing part time work over the past year.

Unemployment Rate by State

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 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: CNIS, ASX, Dow Jones, Australian Market, international markets

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