Morning Market Update - 3 October

 

Pre-Open Data

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Key Data for the Week

Key economic data released this week:

  • Monday – US – ISM Manufacturing Index rose from 58.8 to 60.8 in September, above expectations of 58.0 and now at a 13 year high.
  • Tuesday – AUS – RBA Interest Rate Decision
  • Tuesday – EUR – Producer Price Index
  • Wednesday – US – Markit PMI Composite
  • Thursday – AUS – Trade Balance
  • Thursday – AUS – Retail Sales
  • Thursday – US – Factory Orders
  • Thursday – US – Jobless Claims
  • Friday – US – Unemployment Rate

Australian Market

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The Australian market closed higher yesterday in what was a quiet day of trade as NSW observed a public holiday. Investors started the new quarter in a bullish mood, following a positive lead from the US and encouraging economic data from China. The ASX 200 index rose 0.84%, to 5,729.

Gains across the sectors were broad based, with particular strength from the Materials and Financials sectors, with only Telecommunications failing to finish in positive territory.

Individual standouts included; Rio Tinto up 2.2%, Commonwealth Bank up 1.4%, while BHP and Westpac finished up 1.3% and 1.1% respectively.

Healthscope Limited (HSO) completed the sale of its 48 standalone medical centres for $55m, effective 30 September 2017. The centres contributed $8.8m to FY17 operating EBITDA (1.9% of group earnings). Divestment of the centres allows HSO to focus on its core hospitals and international pathology operations. HSO gained 1.2% yesterday, to close at $1.69.

The Australian futures market points to a 0.33% rise today, being driven by broadly stronger overseas markets.

Overseas Market

US sharemarkets rose to record highs on Monday. Investors were encouraged by solid manufacturing data and optimism around US President Trump's tax reform plans. Financials and Health Care stocks led the gains. The Dow rose 0.68%, while the S&P 500 gained 0.39%. Among the stocks to standout overnight, Intel gained 2.52%, Gilead Sciences rose 3.09%, while Citigroup added 1.46%.

In Europe, markets finished higher overnight, with UK stocks leading the region. The UK’s FTSE 100 closed up 0.90%, while Germany's DAX and the France’s CAC 40 finished up 0.58% and 0.39% respectively.

CNIS Perspective

APRA’s move in March of this year to slow the pace of home lending is certainly working.

The annual growth of house prices in September was the slowest annual growth rate in eight months, falling to 8.5%, from 9.7% in August.

Sydney in particular seemed to be the worst effected, with house prices declining for the first time in 1.5 years, while Melbourne remained reasonably steady.

The current moderation in housing conditions should have further to run as the regulatory measures continue to take effect.

However, interest rates remaining low will continue to support the housing market, and we should expect moderate price growth over the course of the year.

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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) 4928 8500.


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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