Morning Market Update - 27 November 2019

Pre-Open Data

International Markets vs Australian Market

Key Data for the Week

Key economic data released this week:

    • Tuesday – US – Housing Price Index rose 0.6% in September, above expectations for a 0.2% increase.
    • Tuesday – US – New Home Sales eased 0.7% to an annual pace of 733,000 in October. Despite the decline, new home sales recorded their best two-month pace in 12 years.
    • Wednesday – AUS – Construction Work Done
    • Wednesday – US – Gross Domestic Product

S&P ASX 200 Last 12 Months

Australian Market

The Australian sharemarket rose 0.8% yesterday, to close higher for a third straight day. Gains were across all sectors except Consumer Discretionary. The Health Care sector saw the largest gains, with CSL up 2.3%, to close at a new all-time high of $279.73.

Westpac announced the departure of CEO Brian Hartzer, following the fallout from AUSTRAC’s civil suit. The bank rose 1.7%, to close higher for the first time in five sessions. The other big banks also gained; Commonwealth Bank added 1.1%, while ANZ and NAB added 0.4% and 0.3% respectively.

Caltex jumped 13.4%, after the company confirmed it received a takeover proposal from Canadian company Alimentation Couche-Tard for $34.50 per share.

Seek added 3.0%, after the company reaffirmed its FY20 guidance for both revenue and earnings growth.

Mining heavyweights BHP and Rio Tinto both added 0.1% to help lift the Materials sector. The Telecommunications sector eked out a 0.1% gain, despite Telstra falling 0.6%.

The Australian futures market points to a 0.13% fall today.

Overseas Markets

European sharemarkets were mixed on Tuesday, with the broad based STOXX Europe 600 up 0.1%. Financials weighed on the market; ING Groep fell 1.3% and Deutsche Bank lost 1.1%, while Lloyds Banking Group bucked the trend to close 0.6% higher.

US sharemarkets hit all-time highs overnight. US President Donald Trump said the US was in the "final throes" in its attempt to reach a trade deal with China. Walt Disney rose 1.3% after a report showed its streaming service was averaging nearly a million new subscribers a day. REITs and Consumer Discretionary sectors were the standout performers, while Energy and Financials weighed on the market.

By the close of trade, the Dow Jones, S&P 500 and NASDAQ all added 0.2%.

CNIS Perspective

The concept of supply and demand is an economic fundamental that drives many investment decisions.

The graph below illustrates countries by population size and goes a long way to explaining the demand side of the global economic equation.

The massive populations of China and India are obvious from a demand perspective, but what isn’t obvious is the average age within these countries.

China’s average age is 37, while India’s and Indonesia’s are only 29, meaning not only will these massive populations be significant consumers, but they will be for quite a long time.

From an investment perspective, you need to fish where the fish are, and this graph helps us know where to drop our line.

Countries by Population Size

Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.


The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor 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: CNIS, Australian Market, ASX, international markets

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