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Morning Market Update - 18 December 2017

Pre-Open Data

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Key Data for the Week

Key economic data released this week:

  • Monday – AUS – New Motor Vehicle Sales
  • Monday – EUR – Consumer Price Index
  • Monday – US – NAHB Housing Market Index
  • Tuesday – AUS – RBA Meeting Minutes
  • Tuesday – US – Housing Starts
  • Wednesday – US – Existing Home Sales
  • Thursday – Initial Jobless Claims
  • Thursday – US – Gross Domestic Product
  • Friday – UK – Gross Domestic Product
  • Friday – US – Durable Goods Orders

Australian Market

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The Australian sharemarket closed lower on Friday, led by losses in the Real Estate sector.

The big four banks weighed on the Financials sector; ANZ lost 1.0%, Commonwealth Bank and Westpac each slipped 0.8% and NAB slid 0.4%. The Consumer Discretionary sector was boosted by Woolworths and Wesfarmers, after they climbed 0.7% and 0.3% respectively, while Telstra added 0.3% in the Telecommunications space.

Crown Resorts Ltd (CWN) has continued its debt reduction strategy, selling its interests in Alon Las Vegas, Caesars Entertainment Corp, Ellerston, Crownbet and two floors of its Sydney Hotel Resort. CWN gained $0.40, to close 3.2% higher, at $12.85.

Macquarie Group Ltd (MQG) sold down its 11.3% interest in ASX listed toll road company, Macquarie Atlas Roads Ltd (MQA), on Thursday night at a price of $6.00/security. MQG closed 0.5% lower, while MQA ended the session down 3.8%.

The Australian futures market points to a 0.48% rise today, driven by positive overseas markets on Friday.

Overseas Market 

European shares were mixed on Friday. H&M shares fell 13% after the world's second largest fashion retailer reported an unexpected drop in quarterly sales. Banks continued to face selling pressure, following the central banks of both the Eurozone and the UK, deciding to keep their benchmark interest rate unchanged. The broad based STOXX Europe 600 fell 0.2%, while the German DAX rose 0.3% and the UK FTSE 100 gained 0.6%.

US sharemarkets climbed to fresh record highs on Friday on optimism surrounding US tax legislation. The tax plan was finalised after Republican Senators Marco Rubio and Bob Corker pledged their support for the bill, with US lawmakers expected to vote on the bill on Tuesday. By the end of the session, the Dow Jones had climbed 0.6%, while the S&P 500 and NASDAQ gained 0.9% and 1.2% respectively.

CNIS Perspective

We’ve been soaking up the outstanding returns on the US equity market since Trump’s election victory, with the S&P 500 index up 19.5% for 2017.

One of the key features of the Republican victory was that they gained control of both houses of Congress, making the passing of proposed legislative changes smoother.

However, this could change if recent polls of the mid term elections is a guide, where those polled prefer a Democratic led Congress.

The poll follows the upset victory to the Democrat party in the Senate seat of Alabama, which was the first election of a Democrat to the Senate in Alabama since 1992. A state Trump won with 62% of the vote last year!

Trump has some key reforms he needs to get passed to ensure he delivers on his election promises, and spurs the economic growth he believes is possible.

The Republican party will be trying hard to get as much passed as possible, before the balance of power changes.

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, S&P 500, US Sharemarket

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