Morning Market Update - 16 May 2018

Pre-Open Data

International markets verse Australian market

Key Data for the Week

Key economic data released this week:

  • Tuesday – EUR – Gross Domestic Product growth in the March quarter was 0.4%, confirming a slowdown from 0.7% growth in the December quarter.
  • Tuesday – UK – Unemployment Rate – Jobs grew a solid 197,000 in the three months to March, above the consensus estimate of 125,000, pointing to ongoing strength in the labour market. The unemployment rate sits at 4.2%.
  • Tuesday – US – Retail Sales rose 0.3% as expected in April. It points to firmer consumer spending growth after weakness earlier in the year.
  • Wednesday – EUR – Consumer Price Index
  • Wednesday – US – Industrial Production

Australian Market

S&P ASX 200 Last 12 months

The Australian market declined yesterday, to close 0.61% lower, below the 6,100 mark. The market was weighed down by the Telecommunications sector and National Australian Bank going ex-dividend.

Telstra slumped for a second day, after warning on Monday of the likelihood of lower profits this year. Telstra gave up 5.6%, while other sector counterparts Vocus and TPG Telecom gave up 4.4% and 2.9% respectively.

National Australia Bank closed down $0.97, or 3.4%, at $27.52, after trading ex-dividend. NAB will pay investors a $0.99/share fully franked dividend on 5 July.

The Australian futures market points to a 0.11% fall today, being driven by weaker US markets.

Overseas Market 

US sharemarkets fell on Tuesday, with markets led lower by Health Care and Technology names, bringing an end to four consecutive days in positive territory. The negative sentiment was brought on by fears of higher inflation and therefore higher interest rates, as well as a stronger US dollar. The S&P 500 was down 0.7%, while the Dow Jones and NASDAQ both fell 0.8%.

European markets finished the session mixed. Oil and gas stocks performed well, however were offset by losses in the Telecommunication sector. The STOXX Europe 600 rose 0.1%, the German DAX fell 0.1% and the UK FTSE 100 rose 0.2%.

CNIS Perspective 

Minutes of the RBA’s May meeting were released yesterday, and while the dialogue regarding the Australian economy reflected a benign outlook, as usual, Deputy Governor Debelle did make an interesting observation about global economic growth.

He noted that “while the global economic recovery is synchronised, to date we haven’t seen it accelerate in any meaningful way”. Historically, synchronised growth cycles have tended to be self-reinforcing, leading to a continuing pick up in the growth rate.

Currently growth rates in most countries are good, but no economy is growing significantly above trend. Forecasts for global growth in 2018 and 2019 are below the outcome for 2017.

So far this looks like the goldilocks recovery – not too strong and not too weak.

Major advanced economies GDP

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


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, Housing Finance

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