Morning Market Update - 4 November 2019

Pre-Open Data

International Markets vs Australian Market

Key Data for the Week

Key economic data released this week:

    • Monday – AUS – TD Securities Inflation
    • Monday – EUR – Markit Manufacturing PMI
    • Tuesday – AUS – RBA Interest Rate Decision
    • Wednesday – EUR – Retail Sales
    • Thursday – UK – BoE Interest Rate Decision
    • Friday – AUS – Home Loans
    • Friday – CHINA – Trade Balance
S&P ASX 200 Last 12 Months

Australian Market

The Australian sharemarket broke a two-day losing streak to close 0.1% higher on Friday, following broad based gains, with Financials, Information Technology and Utilities the only sectors to close lower.

Health Care was the strongest performing sector; Ramsay Health Care gained 1.4% and Cochlear lifted 1.1%, while CSL and Resmed both hit new all-time highs, closing up 1.0% and 1.3% respectively.

Financials was dragged lower by the big four banks, which all closed down 0.5% to 2.1%. ANZ was the worst performer, as the stock continued to slump following the softer-than-expected profit results on Thursday. Macquarie bucked the trend, edging up 0.3%, after it lifted 1H20 earnings 11% to $1.46 billion, but warned of a likely lower full-year profit.

The Australian futures market points to a 0.37% rise today, being driven by broadly stronger overseas markets on Friday.

Overseas Markets

European sharemarkets rose on Friday, buoyed by upbeat US jobs data and stronger-than-expected Chinese manufacturing data, which tempered nerves around slowing global growth. The broad based STOXX Europe 600 and the German DAX both rose 0.7%, while the UK FTSE 100 gained 0.8%.

US sharemarkets also posted strong gains on Friday in response to the released economic data, as well as an update on the progress of US-China trade talks. Reuters reported "Beijing's state-media Xinhua News Agency said the world's two largest economies had reached "consensus on principles" during a serious and constructive telephone call on Friday between their main trade negotiators". Fitbit rose 15.5% after Alphabet confirmed it had acquired the company for a total equity value of ~US$2.1 billion. By the close of trade, the Dow Jones rose 1.1%, while the NASDAQ and S&P 500 added 1.1% and 1.0% respectively, to both set new record closing prices.

CNIS Perspective

Australian property data released on Friday showed the recovery in the housing market continues. Data from CoreLogic showed median dwelling prices across eight capital cities rose 1.4% in the month of October, the fastest monthly growth rate in almost 10 years. Prices have risen for four consecutive months since bottoming in June.

Dwelling prices gained the most in Sydney and Melbourne. Sydney prices lifted 1.7% for the second consecutive month, while Melbourne saw a 2.3% increase. Melbourne’s rise was the strongest since November 2009 when prices were recovering from their GFC lows.

The recovery in prices in recent months has been less pronounced outside of Sydney and Melbourne. However, these other cities experienced a shallower downturn. In October, Canberra and Hobart surpassed the peaks registered in the previous cycle. Sydney prices remain 10.4% below their recent peak and Melbourne 5.8% below.

The RBA’s rate cuts appear to be having a clear impact on the housing market. The outlook for the housing market has improved and price growth is expected to continue in 2020. The three recent rate cuts from the RBA and the prospect of another cut to come will continue to stoke demand.

CoreLogic Hedonic Home Value   

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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