Morning Market Update - 19 December 2017

Pre-Open Data


Key Data for the Week

Key economic data released this week:

  • Monday – EUR – Consumer Price Index – Euro area annual inflation was 1.5% in November, up from 1.4% in October. This time last year, the rate was just 0.6%.
  • Monday – US – NAHB Housing Market Index Builder confidence increased five points, to a level of 74 in December, well ahead of the forecasted 70. This was the highest reading since July 1999, over 18 years ago.
  • Tuesday – AUS – RBA Meeting Minutes
  • Tuesday – US – Housing Starts

Australian Market


Australian shares strengthened on Monday, led higher by the major banks, while firmer commodity prices helped boost the Materials sector. However, it was the IT sector that improved the most, rising 2.4%, as a takeover of Aconex boosted the sector.

Aconex (ACX) shares soared 44.2%, to $7.63, after US technology giant Oracle offered to buy the construction software provider for $7.80 per share, valuing the company at $1.6 billion.

ANZ was the best performer of the major banks, surging 2.1% to $28.82, after announcing it will complete an on market share buyback of $1.5 billion, after selling its life insurance unit, its wealth business and a 20% stake in Shanghai Rural Commercial Bank.

The Australian futures market points to a 0.48% rise today, being driven by broadly stronger international markets.

Overseas Market 

The S&P 500 and NASDAQ hit new highs on Monday, as investors focused on the progress of the proposed tax legislation. The tax bill, which will reduce corporate and individual tax rates, is expected to be voted on by the House of Representatives tonight and the Senate later this week, with intentions for it to be signed off prior to Christmas.

Financial stocks, unsurprisingly, were among the biggest improvers on Monday. Citigroup, Bank of America and Wells Fargo each rose more than 1%.

Shares in social media company Twitter, jumped 11.0% after JPMorgan announced it expects the company to post double digit daily average user growth of 10% in 2018.

The Stoxx Europe 600 Index climbed 1.2%, its biggest gain in five months, as real estate, automakers and technology stocks led gains throughout the region. The German DAX gained 1.6% and UK’s FTSE 100 rose 0.6%.

CNIS Perspective

It was a mixed bag of news in Australia’s Mid-Year Economic and Fiscal Outlook (MYEFO) released yesterday.

The budget deficit was revised to reflect a $5.8bn improvement, reflecting better business conditions which, in turn, have lifted the projected tax intake from companies.

However, the GDP estimate for 2017/18 was revised down to 2.50% from 2.75%, which reflects slower growth in household consumption. The downgrade to the forecast reflects expectations that wage growth and inflationary pressures will remain subdued.

Interestingly, the forecasts were based on Australia maintaining its AAA credit rating. This time last year, speculation was growing about the possibility of a ratings downgrade from the major credit rating agencies, after Standard & Poor’s placed Australia on negative watch in July 2016, but left the AAA rating unchanged.

Contact Us

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: Investment, CNIS, GDP, Australian Economy, AAA credit rating

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