Wednesday 3rd April 2019

OPENING CALL: The Australian market looks to open flat.

Australian stocks rose for a sixth-straight session as Asia Pacific equities continued to reverse the fourth quarter’s swoon, with concerns remaining on the sidelines.  The S&P/ASX 200 rose 0.4% to 6242.4, following an early-afternoon pullback ahead of the central bank’s latest policy statement.
Falling shares of Walgreens Boots Alliance pulled the Dow Jones Industrial Average lower intraday after the drugstore chain slashed its profit expectations, rekindling investors’ fears of economic turbulence.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian stocks rose for a sixth-straight session as Asia Pacific equities continued to reverse the fourth quarter’s swoon, with concerns remaining on the sidelines. The S&P/ASX 200 rose 0.4% to 6242.4, following an early-afternoon pullback ahead of the central bank’s latest policy statement. Some see a bit more caution in the RBA’s missive, and the Aussie dollar ticked down to session lows while equities showed scant late-day reaction. Energy climbed 0.9% on oil’s Monday jump but materials ended a touch lower after earlier hitting fresh multiyear highs. Health care also advanced 0.9% and consumer discretionary rose 1.1%, but yield plays declined as Treasury yields jumped overnight.

US Markets

Falling shares of Walgreens Boots Alliance pulled the Dow Jones Industrial Average lower intraday after the drugstore chain slashed its profit expectations, rekindling investors’ fears of economic turbulence. The Dow Jones Industrial Average shed 92 points, or 0.4%, to 26165 as shares of Walgreens fell more than 12% in recent trading. The S&P 500, meanwhile, fell 0.1%, while the Nasdaq Composite was little changed. Walgreens’s stock tumbled after the drugstore chain said it faced its most difficult quarter since its 2014 acquisition of Alliance Boots. The retailer fell short of analysts’ profit expectations for the latest quarter and warned that challenging economic conditions, including falling generic drug prices, will weigh on earnings throughout the year. Investors worry Walgreens could be the beginning of a rough earnings period. S&P 500 companies are projected to report a 4% profit contraction from a year earlier, the broad index’s first quarter of negative earnings growth since 2016. Profit estimates for subsequent quarters continue to fall, analysts added, raising the likelihood of an earnings recession.

Commodities

Gold futures finished slightly higher as stocks stumbled a day after a round of upbeat data on manufacturing activity out of China and the U.S. that sparked a rally in stocks and other assets perceived as risky and robbed haven assets of their appeal. June gold added $1.20, or less than 0.1%, to end at $1,295.40 an ounce, as gains for the Dow Jones Industrial Average and the S&P 500 index cooled after Monday’s jump for assets perceived as risky. In other commodity markets, May wheat prices rose 1 1/4 cents to $4.64.

Iron Ore: 88.59s + 2.79 (May Contract)

Oil Futures

Oil jumped to a nearly five-month high as the world’s top crude-oil producers including Saudi Arabia reduced output levels last month as promised to slim down global supplies. West Texas Intermediate futures, the U.S. oil benchmark, ended 1.6% higher at $62.58 a barrel on the New York Mercantile Exchange, marking a third consecutive daily rise and the highest closing level since Nov. 5. Brent crude, the global benchmark, rose 0.5% at $69.37 a barrel on London’s Intercontinental Exchange, its highest closing price since Nov. 12. The Organization of the Petroleum Exporting Countries, or OPEC, and other major oil producing allies, including Russia, agreed in December to cut production, effectively taking 1.2 million barrels a day out of the global market during the first six months of this year.

Forex

The dollar rose intraday, buoyed by gains against the British pound after the House of Commons again failed to pass measures that would limit the economic disruption of the U.K.’s looming departure from the European Union. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.2% at 90.24. The pound, meanwhile, was down 0.4% at $1.3043, extending its recent losses as investors grapple with the possibility of a so called hard Brexit that many economists say could cause serious harm to the U.K. economy.

European Markets

The Stoxx Europe 600 index finished the day up 1.36 points, or 0.35%, to 385.03. The DAX closed up 72.80 points, or 0.62%, to 11754.79, and is now up for four consecutive trading days. The FTSE 100 index was up 73.74 points, or 1.01%, to 7391.12 — the largest one-day point-and-percentage gain since Feb. 5. And the French CAC-40 index was up 17.94 points, or 0.33%, to 5423.47, and is now up for three consecutive trading days.

Asian Markets

Southeast Asian equities maintained roughly 0.5% gains as stocks across the region started strongly but cooled in a number of markets by day’s end. Japan’s Nikkei saw an initial 1.1% gain turn into a slight decline. Some benchmarks in China also faded late to end lower. The Nikkei 225 was flat, while Hong Kong’s Hang Seng Index rose 0.1%. South Korea’s Kospi benchmark rose 0.4%, shrugging off weaker-than-expected inflation data released Tuesday. There was another six-month closing high for Taiwan’s stock benchmark as the market was helped by fresh global gains. The Taiex rose 0.45% to 10690.30 as lens maker Largan bounced 3.2% to erase Monday’s slide, while Apple product assembler Hon Hai climbed an additional 1.5% after Monday’s post-earnings limit-up gain. Singapore’s FTSE Straits Times index ended up 0.9% at 3279.78. Elsewhere, Indian shares extended gains to hit new highs, helped by auto and finance
stocks. The S&P BSE Sensex closed above the 39,000-level for the first time. The index ended 0.5% higher at 39,056.65. Domestic shares have rallied over the past 1-1/2 months on strong foreign fund flows and hopes of a rate cut. Investors will now track comments from the monetary policy due later this week for further cues.

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