Morning Market Update - 2 November 2017


Pre-Open Data


Key Data for the Week

Key economic data released this week:

  • Wednesday – US – Federal Reserve Interest Rate Decision – The FOMC left the benchmark interest rate unchanged at 1%-1.25% as widely expected.
  • Wednesday – US – Markit Manufacturing PMI registered 54.6 in October, up from 53.1 in September, indicating a solid improvement in manufacturing operating conditions.
  • Thursday – EUR – Markit Manufacturing PMI
  • Thursday – UK – BoE Interest Rate Decision
  • Thursday – US – Initial Jobless Claims

Australian Market


The ASX 200 closed 0.49% higher yesterday, with 10 of the 11 major sectors finishing higher. The big banks all finished higher, with National Australia Bank the strongest ending the session up 0.67%.

CSR Ltd (CSR) released its 1H18 results yesterday, reporting a 7.1% increase in revenue to $1.3bn and a 32.2% increase in underlying EPS to $0.27, driven from solid growth in their Building Products, Aluminium and Property segments. However, the company reiterated power costs for its Aluminium business will increase by ~$250/t of production from November 2017. CSR guided for FY18 underlying NPAT of $187-223m, compared to FY17’s $183.9m result. CSR declined $0.26, to close 5.5% lower at $4.48.

The Australian futures market points to a 0.07% rise today.

Overseas Market

International markets were mixed overnight. The Dow Jones and S&P 500 rallied 0.25% and 0.16% respectively, whilst the NASDAQ fell 0.17%.

In Europe, the German DAX shone, lifting 1.78%, France’s CAC 40 added 0.20% and the UK’s FTSE 100 gave up 0.07%. The broad based STOXX Europe 600 ended the day 0.39% higher.

Facebook reported third quarter profit of US$1.59/share and sales of US$10.3 billion. Both topped analysts’ expectations of US$1.28/share and US$9.84 billion respectively. Facebook also announced Monthly Active Users rose 17% from a year ago, to 2.01 billion. Facebook rallied 1.44%, to close at US$182.66.

Qualcomm reported quarterly earnings and revenue overnight which beat analysts' expectations, despite the chipmaker’s costly legal battle with Apple. Qualcomm shares rose by as much as 2% in after-hours trading.

CNIS Perspective

The Federal Reserve left its benchmark interest rate unchanged overnight and signaled another rate increase is likely to come in mid-December.

However, hanging over the meeting was the anticipation of a much bigger change; the nomination of Jerome Powell as the next Federal Reserve Chairman.

Trump, who has said he’ll announce his pick tonight, would be choosing a former private equity executive who favours continuing gradual interest rate increases and sympathises with White House calls to ease financial regulations.

If approved by the Senate, the 64 year old former Carlyle Group LP managing director and ex-Treasury undersecretary would succeed Federal Reserve Chair Janet Yellen, who has raised borrowing costs four times starting in late 2015 and just begun scaling back the central bank’s US$4.5 trillion balance sheet.

A Republican appointed to the Fed in 2012 by Democratic President Barack Obama, Powell has earned a reputation as a non-ideological and pragmatic policy maker. While he hasn’t played a prominent public role in formulating monetary policy, he has backed Yellen’s cautious approach to raising interest rates and withdrawing stimulus.

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, Market Update, Federal Reserve

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