Morning Market Update - 22 September 2017


Pre-Open Data


Key Data for the Week

Key economic data released this week:

  • Thursday – US – Housing Price Index rose in July, up 0.2% from June. From July 2016 to July 2017, house prices were up 6.3%.

  • Thursday – US – Initial Jobless Claims declined 23,000, to 259,000, for the week ended 16 September.

  • Friday – AUS – Building Permits

  • Friday – EUR – Markit Manufacturing PMI

  • Friday – US – Markit Manufacturing PMI


Australian Market









It was a tough day for the Australian market yesterday, with nearly every sector finishing in negative territory. The ASX 200 index fell 0.94%.

Commonwealth Bank of Australia (CBA) has agreed to sell 100% of its life insurance businesses in Australia and NZ to AIA Group Ltd for $3.8bn. The sale price represents a FY17 pro-forma earnings multiple of 16.9x. The transaction is expected to complete in CY18 and will lift the bank’s CET1 capital ratio by 70bps to 10.8%.

CBA also announced a strategic review of its global asset management business, Colonial First State Global Asset Management, which may include an Initial Public Offering. CBA declined $0.22, to close 0.3% lower, at $76.07.

Tabcorp Holdings (TAH) and Tatts Group (TTS) stated yesterday they are reviewing the Federal Court’s decision to uphold an appeal by the ACCC against their merger. The Australian Competition Tribunal (ACT) advised it will hold a directions hearing on Tuesday, 26 September 2017. The TTS shareholder meeting to vote on the merger is still scheduled for 18 October 2017, although TTS warned the decision to remit the matter back to the ACT may impact the timing. TTS and TAH closed 1.4% and 1.3% lower, respectively.

The Australian futures market points to a 0.34% rise today.

Overseas Market

Global share markets weakened overnight as investors continued to digest the news that the Federal Reserve would raise interest rates further. The Dow fell 0.2%, while the S&P 500 dropped 0.3% and the NASDAQ lost 0.52%.

In Europe, Germany’s DAX and France’s CAC 40 rallied 0.25% and 0.49% respectively, whilst the UK’s FTSE 100 lost 0.11%.

CNIS Perspective

The growth of China’s emerging middle class has been one of our major themes for some time and the latest analysis of the Chinese economy highlights the impact they are having.

Outbound travel is one segment that is reflecting significant growth already and is expected to continue, given there are 400 million millennials who will drive spending on airfares, hotels, restaurants, sightseeing, theme parks etc., both domestically and abroad.

The growth in domestic travel will be a key driver of China’s shift from construction to consumerism. The Chinese government has planned to spend US$304 billion on resorts and holiday destinations to drive internal spending through to 2020.

Australia should also be a beneficiary of Chinese travel abroad.


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, Investment Market, Market Update, USD

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