Morning Market Update - 9 July 2019

Pre-Open Data


Key Data for the Week

Key economic data released this week:

  • Monday – AUS – ANZ Job Ads rose 4.6% in June, partially retracing an 8.2% decline in May. On an annual basis, job ads remain in decline, down 9.1%.
  • Monday – EUR – German Industrial Production rose 0.3% in May, after a weak report in April. On a year ago, production contracted 3.7%.
  • Tuesday – AUS – NAB Business Confidence and Conditions
  • Tuesday – US – Small Business Optimism

Australian Market

The Australian sharemarket fell 1.2% yesterday, with all sectors closing lower. Utilities and REIT’s were the weakest performers, both down over 2%.

Financials were dragged lower by the big four banks; Commonwealth Bank and Westpac both fell 1.2%, ANZ lost 1.0% and NAB slipped 0.8%. The Materials sector fell following a fall in iron ore prices, BHP lost 1.8% and Rio Tinto fell 1.0%.

Health Care and Telecommunications stocks also came under pressure, CSL fell 1.5% and Cochlear lost 2.2%, while Telstra fell 0.8%.

The Australian futures market points to a 0.02% rise today.

Overseas Markets

European sharemarkets fell on Monday. Deutsche Bank weighed on the market, down 5.4%, as investors questioned the bank's restructuring targets, as it begins to cut 18,000 jobs globally by 2022, in a €7.4 billion "reinvention". The German DAX slipped 0.2%, while the UK FTSE 100 and the broad based STOXX Europe 600 both lost 0.1%.

US sharemarkets also lost ground overnight. Health Care stocks fell, after US President Trump’s recent statement about an upcoming executive order that would lower prescription drug prices. Boeing slipped 1.3%, after Saudi Arabian budget airline company, flyadeal, said it would not proceed with a US$5.9 billion order for the planemaker's grounded 737 MAX aircraft. By the close of trade, the Dow Jones fell 0.4%, the S&P 500 lost 0.5% and the NASDAQ slipped 0.8%.

CNIS Perspective

US employment data released last week suggests the goldilocks run of the US economy is set to continue and could extend the cycle even further.

The unemployment rate has remained under 4% since April 2018, and June’s data remains steady at 3.7%.

An additional 224,000 jobs were created in June far exceeding the expectations of 158,000 new jobs.

The unemployment rate of 3.7% was an increase from the previous level of 3.6%, due to an increase in the participation rate, with an additional 334,000 people looking for work.

The US earnings season kicks off next week and should attract more attention than usual.

Earnings have been growing at a slower rate than previously, but growing, nonetheless.

The US economic cycle is nearing the end, but another solid earnings reporting season, following on from June’s employment data, could see it continue even longer.


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, Dow Jones, Australian Market, ASX, international markets

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