Morning Market Update - 30 May 2017

 

Pre-Open Data

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Key Data for the Week

Key economic data released this week:

  • Tuesday – AUS – Building Permits
  • Tuesday – EUR – Economic Sentiment Indicator

Australian Market

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The Australian market closed lower yesterday, with the ASX 200 falling 0.8% to 5,707, with banks leading the decline.

The big banks lost between 1.3% and 1.9%, with ANZ the worst performer yesterday. The banks have been under pressure since the start of the month, with the Budget's bank levy weighing on the majors.

Industrials were the only sector to post a gain, with the sector adding 0.7%, led by Sydney Airport as it firmed 2.43%. Brambles closed up 1.15% and Transurban finished 0.9% higher.

Wesfarmers Limited (WES) announced group CFO, Anthony Gianotti, will step down later this year after nine years in the role. He will be replaced by current finance director Terry Bowen. WES declined 0.2%, to close at $42.55.

Pizza giant Domino’s (DMP) fell $2.36, or 3.8%, yesterday, to close at $59.19 in a volatile day of trade. The move came after Morgans stockbrokers downgraded the stock. DMP is down 9% since the start of 2017. 

The Australian futures market points to a 0.07% fall today.

Overseas Market

It was a quiet night of trading given holidays in the US and UK. There was little movement in most asset classes as a result. The only major move came on Italian markets, which were dragged lower by ongoing concerns over Italian banks and political uncertainty, with talk of an early Italian election.

CNIS Perspective

Guidance on the RBA’s direction on Australian interest rates can be found in Europe.

While the Euro area is showing its strongest economic growth in a decade, lowest unemployment since 2009 and Germany, the euro area’s economic powerhouse, recording business sentiment at its highest level since 1991, the European Central Bank still can’t withdraw stimulus and raise interest rates. The reason being, the absence of inflation.

Similar to Australia, and as we noted last week, also the US, an absence of wages growth, even as unemployment falls, is keeping the consumer cautious about over spending and driving inflation up. Technology, more efficient work practices, globalisation and low oil prices are also working together to keep inflation low.

Globally, inflation looks like remaining low for quite some time and, as in the Euro area, Australia will find the lack of inflation a road block to raising interest rates.

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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, CNIS, Australian Market, Overseas Market, RBA, Euro, Dominos

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