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Morning Market Update - 15 August 2019


Pre-Open Data

International Markets vs Australian Market

Key Data for the Week

Key economic data released this week:

  • Wednesday – AUS – Wage Price Index – Wages grew at a slightly stronger than expected rate of 0.6% in the quarter. However, the annual growth remained muted at 2.3%, and in line with forecasts. 
  • Wednesday – EUR – Gross Domestic Product grew 0.2% in the June quarter, in line with the first estimate.
  • Thursday – AUS – Unemployment Rate
  • Thursday – US – Retail Sales

S&P ASX 200 Last 12 Months

Australian Market

The Australian sharemarket recovered in late trade to close 0.4% higher yesterday, driven by a strong session from Health Care stocks. Gains were widespread, with Financials and REITs the only sectors to close lower.

CSL Limited led Health Care sector gains, after announcing an 11% lift in full year profit to US$1.92 billion and a 7.9% increase in revenue to US$8.53 billion. The blood products company closed up 6.6%, after hitting a new all-time high of $235.66 earlier in the session.

Aveo Group gained 5.5%, after the retirement home operator reached an agreement to be acquired by Brookfield Property Group for $1.3 billion, or $2.195 per share.

The Australian futures market points to a 2.11% fall today, being driven by broadly weaker markets overnight.

Overseas Markets

European sharemarkets fell to a six-month low on Wednesday, as an inversion in the US yield curve and downbeat economic data from China and Germany sparked fears of a looming recession. The broad based STOXX Europe 600 lost 1.7%, after touching its lowest level since 15 February, while France’s CAC 40, Germany’s DAX and Italy’s FTSE MIB all gave up more than 2.0%.

US sharemarkets also fell overnight, as global growth concerns weighed on the indices. Energy stocks were among the worst performers, driven by weaker global oil prices, while Financials were weighed down by banking stocks, as yields continued to drop. By the close of trade, the S&P 500 had lost 2.9%, while the NASDAQ slid 3.0% and the Dow Jones gave up 3.1%.

CNIS Perspective

Global factors are grabbing the headlines at the moment, but domestic data also continues to paint a not so rosy picture.

Australia's wages growth across most industries remains well contained at an annual growth rate of 2.3%, the same as the previous quarter.

It's a long way from the 3%+ the RBA want to see and, with signals that employment growth will slow, suggests wages growth won't pick up in a meaningful way for some time.

With ongoing weak wages growth set to continue, inflation is also likely to remain below the RBA's target band of 2% to 3% for some time.

Wage Price Index vs Wage Price Index & Unemployment Rate

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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