Morning Market Update - 26 April 2017


Pre-Open Data


Key Data for the Week

Key economic data released this week:

  • Tuesday – US – New Home Sales jumped 5.8% in March, to hit an 8 month high. This was stronger than expected, but followed a downward revision to the previous month’s gain.
  • Tuesday – US – Consumer Confidence was not as strong as expected, falling to 120.3 in April. This was down from a 16 year high of 124.9 in March.
  • Wednesday – AUS – Consumer Price Index
  • Thursday – EUR – Consumer Confidence
  • Thursday – EUR – Industrial Confidence
  • Thursday – EUR – ECB Interest Rate Decision
  • Thursday – US – Durable Goods Orders

Australian Market


The Australia market was closed for the ANZAC Day public holiday yesterday, however started the week on a high point Monday, with broad based gains across most sectors. It proved a volatile trading day, as the ASX 200 index trimmed early gains after hitting its intraday high, slid into the red in late afternoon, but bounced back with moderate gains before the closing bell. Most sectors posted positive results for the session, with only Materials and Telecommunications closing lower.

The board of cleaning company Spotless Group (SPO) unanimously rejected a $1.26 billion takeover bid from mining services group Downer EDI (DOW). SPO described the offer as hostile and highly conditional.

SPO closed down 0.5%, while DOW ended flat.

The Australian futures market points to a 0.42% rise today, being driven by strength in global stock markets overnight.

Overseas Market

Risk appetites lifted overnight on expectations of Trump’s tax reform announcement tonight, and as geopolitical risks faded. Relief at the outcome of the French election on the weekend also boosted investor sentiment.

The S&P 500, the broad US stock market measure, rose by 0.6% and the Dow Jones jumped 1.1% for the session, as Caterpillar Inc. surged 8% and McDonald’s Corp. rose 5% after reporting results. The Nasdaq Composite Index surged past 6,000 for the first time, as corporate earnings results beat expectations.

Investor focus shifted to the US economy, where corporate earnings and data on housing starts underpinned speculation that economic growth is poised to accelerate, a day before Trump is expected to unveil a tax plan that would cut the upper corporate rate to 15%. Trump’s decision to impose a fresh tariff on imported Canadian timber rekindled protectionist concerns, while shares in Europe rose as political risk abated, though tensions around North Korea continued to simmer.

Alphabet Inc., Microsoft Corp., Inc., Twitter Inc., Intel Corp., Credit Suisse Group and Bayer AG, are among major companies still to release results this week.

CNIS Perspective

If ever there was an example of financial markets reacting to greater geopolitical certainty (or less uncertainty) it is the positive reaction over the past few days to round one of the French elections.

In the lead up to the elections, concerns were growing a newly elected government would work towards extricating France from the European Union (EU). This would have started a gradual slide into oblivion for the EU and created enormous uncertainty that could have taken years to play out.

However, the round one victory over the weekend of a more moderate candidate, intent on remaining in the EU, has reassured financial markets and removed the uncertainty.

European equity markets and the Euro currency were the big winners. The European STOXX 50 index jumped ~4% and the Euro gained around 2% against the AUD and USD.

Contact Us

Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4927 8844.


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, Australian Market, EU, Euro

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