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Morning Market Update - 3 August 2017

 

Pre-Open Data

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Key Data for the Week

Key economic data released this week:

  • Wednesday – EUR – Producer Price Index fell 0.1% during the month of June. However, remains 2.5% higher compared with June 2016.
  • Thursday – AUS – Trade Balance
  • Thursday – UK – Interest Rate Decision

Australian Market

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Australian equities found little favour with investors yesterday, with the market finishing in negative territory as Financials and Energy names led the decline.

It was a tough day across the board for the Financials, with Westpac the worst hit of the big four banks, down 1.0%. QBE Insurance closed 0.7% lower, while in the property space, Lend Lease and Scentre Group lost 2.8% and 2.1% respectively.

ResMed Inc (RMD) released its FY17 results, reporting a 12.4% increase in revenue and a 5.1% increase in underlying EPS to US$2.82. The company declared a dividend of US$0.35, a 6.1% increase over the prior corresponding period. RMD declined $0.55, to close 5.7% lower at $9.11.

The Australian futures market points to a 0.19% rise today, being driven by positive leads from US markets overnight.

Overseas Market

US share markets paid little attention to economic data overnight, and continued to be focused on earnings. The Dow rose 0.24%, to a new record high, the S&P 500 rose 0.1%, while the NASDAQ finished flat.

Apple rallied 4.73% overnight after releasing its quarterly results. Quarterly revenue rose 7% compared with 12 months ago, to US$45.4 billion. Apple also reported quarterly earnings per diluted share of US$1.67, up 17.6% from the prior year. Importantly, revenue from ‘Services’ rose 22% to US$7.2 billion. Services includes iTunes, iCloud, Apple Music, Apple Pay and the App store and, unlike Apple’s hardware business, Services revenue is not highly seasonal. Apple's cash pile rose to a record US$261.5 billion. Apple declared a cash dividend of US$0.63 per share. 

In Europe the broad based Euro Stoxx 600 ended the day down 0.43%, with most sectors and major bourses in negative territory. France’s CAC 40 dropped 0.39%, Germany’s DAX fell 0.57% and the UK’s FTSE 100 fell 0.52%.

CNIS Perspective

The housing construction sector may be past its peak, but it is still showing signs of significant life.

The peak appears to have been in August 2016, with approvals down 15.4% since then and continuing to point to a turning in the residential construction cycle. However, building approvals in June jumped 10.9%, which is way above most estimates and suggests those that have equity in their homes, which would have grown over the past few years, and have capacity to service debt, are still engaging in housing construction.

With residential construction being a key driver of economic growth, this is good news, albeit the peak has passed and the impact on economic growth will be less favourable than in recent years.

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Contact Us

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


Disclaimer

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, Market Update

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