Morning Market Update - 6 September 2019

Pre-Open Data

International Markets vs Australian Market

Key Data for the Week

Key economic data released this week:

  • Thursday – AUS – Trade Balance – Australia’s trade surplus fell to $7.3 billion in July, beating expectations for a decline to $7 billion.
  • Thursday – US – Initial Jobless Claims edged up to 217,000 for the week ended 31 August.
  • Friday – EUR – Gross Domestic Product
  • Friday – US – Unemployment Rate

S&P ASX 200 Last 12 Months

Australian Market

The Australian sharemarket followed the global rally in equities to record its first positive session for the week yesterday, closing up 0.9%. Gains were widespread across most sectors, with only REITs closing lower. Stocks that traded ex-dividend yesterday included: BHP, Class, FlexiGroup, Ramsay Health Care and Whitehaven Coal.

Consumer Staples was the best performing sector, led by strong sessions from Coles and Woolworths, which gained 3.1% and 2.4% respectively, while CSL boosted Health Care stocks, ending the session 1.4% higher.

The big four banks all posted solid gains of between 0.7% and 1.1% to lead Financials higher, while Energy stocks rose in response to the price of crude oil climbing to above US$60/bbl, with Woodside Petroleum and Oil Search ending the session 1.5% and 2.2% higher respectively.

TPG Telecom rose 3.2% despite reporting a 56% slide in net profit to $173.8 million, and a $236 million impairment after scrapping its planned Australian mobile network rollout earlier in the year.

The Australian futures market points to a 0.15% rise today, being driven by broadly stronger international markets overnight.

Overseas Markets

European sharemarkets rose for a second straight session on Thursday, as hope remains the US and China will make progress in their ongoing trade dispute. Most of the region’s largest indices posted solid gains; France’s CAC 40 gained 1.1%, Italy’s FTSE MIB lifted 1.0% and Germany’s DAX rose 0.9%. However, the UK FTSE 100 was a laggard in the region, weighed down by several leading companies going ex-dividend, including mining heavyweight Glencore.

US sharemarkets also posted strong gains overnight, led by Information Technology stocks, with heavyweights Alphabet (2.6%), Amazon (2.2%), Apple (2.0%), Facebook (2.0%) and Microsoft (1.8%) all enjoying a strong session. Cash payment giants MasterCard (2.1%) and Visa (1.6%) provided further support to the local indices. By the close of trade, the NASDAQ had gained 1.8%, the Dow Jones rose 1.4% and the S&P 500 added 1.3%.

CNIS Perspective

Boris Johnson has thrown down the gauntlet to Labour to vote for a snap election next week, but party leader Jeremy Corbyn appears increasingly likely to reject what he regards as “a trap”.

Labour is divided over whether to allow an election, as many MPs do not trust Johnson’s intentions, believing he will run down the clock to make sure no last-minute Brexit deal is possible.

Further adding to Johnson’s woes is a new law that could be passed by the British Parliament next week, which will require the Prime Minister to seek an extension to the UK’s European Union membership if he hasn’t struck a divorce deal by the end of October.

The government plans to try for another election trigger vote on Monday, and if successful, will take place on October 15, limiting the time for the elected Prime Minister to go to Brussels for a crucial EU meeting to strike a last-minute Brexit deal.

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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