Monday 4th March 2019

OPENING CALL: The Australian market looks to open higher with SPI Futures up 18 points.

Australia’s stock benchmark set a five-month closing high today as the market continued to benefit from the rebound in financials.
U.S. stocks rose as investors analyzed a batch of new economic data and waited for signs about U.S.-China trade talks.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australia’s stock benchmark set a five-month closing high today as the market continued to benefit from the rebound in financials. The ASX 200 finished up 0.4% at 6192.7 as the sector climbed 0.5% following their best month in six years in February. That helped offset the 0.4% drop in materials today and 1.4% decline in energy. On the upside, health care climbed 0.7% and REITs jumped 2.1%. The ASX also rose 0.4% for the week.

US Markets

U.S. stocks rose as investors analyzed a batch of new economic data and waited for signs about U.S.-China trade talks. The Dow Jones Industrial Average rose 113 points, or 0.4%, to 26028, pulling back after climbing more than 200 points in early trading. The S&P 500 rose 0.7% and Nasdaq Composite added 0.8%. As of the 4 p.m. close of trading, the Nasdaq was up 0.9% for the week, giving the technology-heavy index a 10th consecutive weekly gain. Despite a bumpy week, the Dow and S&P 500 are off to their best start to a year in about three decades and closed out February with gains of at least 3%. This year’s gains have propelled both indexes within 5% of their records. That marks a reversal following a bruising fourth-quarter selloff. Some analysts said the recent gains have been driven by a more flexible Federal Reserve, the perception that trade worries between the U.S. and China are easing and fresh data that has signaled continued strength in the U.S. economy. Earlier, energy shares in the S&P 500 had climbed 1.8% Friday. Exxon Mobil and Chevron both rose at least 1%. Shares of Gap surged 16% after the apparel retailer topped analysts’ earnings estimates in the latest quarter. The company also said it is separating Old Navy from the rest of the business, creating two publicly traded companies. Meanwhile, Foot Locker ‘s stock jumped more than 5% after the sporting-goods retailer delivered better-than-expected sales growth in the fourth quarter.

Commodities

Iron Ore: 85.89s + 4.20 (April Contract)

Oil Futures
Forex

The U.S. dollar eked out a gain in afternoon trading, reversing a weekly loss. Friday’s session was marked by improved risk appetite across financial markets even as net-negative U.S. economic news mixed with positive data from China and new hopes of a trade deal. The ICE U.S. Dollar Index was last up 0.4% at 96.517, after briefly dipping into negative territory after some weaker-than expected economic reports.. For the week, the gauge was on track to be little changed in positive territory. The ISM manufacturing index for February read 54.2, rather than 55.5 expected, also having fallen from the prior month. The consumer-sentiment index for the same month slipped to 93.8, versus the 95.6 consensus expectation. Earlier, personal income for December beat estimates, while the January figure was lower than expected. December consumer spending contracted by 0.5%, its biggest drop since 2009, and December core inflation was in line with expectations at 0.2%. Meanwhile, officials from Washington and Beijing are set to meet again this month, spurring hopes that negotiations could wrap up in as soon as two week’s time, according to a Bloomberg report. The U.S. was set to raise tariffs on Chinese imports to 25% on Friday, but refrained from doing so, leaving market bulls to hold out hope that a trade deal between Washington and Beijing would be struck sooner versus later. China’s yuan was mildly weaker against the greenback on Friday, with one dollar buying 6.7064 yuan in Beijing, up 0.2%, and 6.7170 yuan in the offshore market, up 0.2% from Thursday. During Asian market hours, China’s Caixin manufacturing purchasing managers index for February came in at 49.9, beating consensus estimates of 48.5, as well as the prior number.That was just 0.1 point below 50 — the threshold that denotes economic expansion — which soothed investor worries about economic contraction in China. The Japanese yen, viewed as a haven in times of global uncertainty, was weaker on Friday as risk appetite improved, even though a resolution of trade tensions would also be good news for Japan, which is part of the China trade complex. One dollar last fetched Yen112.04, up 0.6%, hitting its highest level since late December. Canada reported fourth quarter gross domestic product growth, which was below expectations and led the Canadian dollar to retrace its previous strength. GDP grew 0.4% on the quarter between October and December, versus 1% expected. The GDP by industry measure contracted by 0.1% month-on-month in December. One U.S. dollar last bought C$1.3299, up 1% at a two-week high, according to FactSet. In Europe, flash estimates for harmonized eurozone inflation for February was in line with expectations at 1.5% year-over-year. German economic data were mixed, with a stable unemployment rate, a contraction in its manufacturing PMI to 47.6, but a bounce in January retail sales, which beat expectations. The euro was last modestly stronger at $1.1360, compared with $1.1372 late Thursday. In the U.K., manufacturing expanded in February, contrasting with German economic reports, despite the continuing Brexit drama. The British pound last bought $1.13197, down from $1.3261 Thursday.

European Markets

The Stoxx Europe 600 fell 0.34%, or 1.3 points, to 371.28 as investors expressed
disappointment at Donald Trump’s failure to reach a deal with North Korea and weak manufacturing data from China. The DAX dropped 0.04% while the CAC 40 rose 0.04% after all major Asian indices fall apart from China’s Shenzhen A-Share, which rose 0.35%. The Chinese manufacturing report was 49.2, the weakest since early 2016. “It appears the Dow Jones is prepared to take various global hostilities–specifically the abrupt, unsuccessful end to the U.S.-North Korea summit and the India-Pakistan situation–in its stride,” said Connor Campbell at Spreadex.

Asian Markets

Asian stocks also gained, with the Shanghai Stock Exchange rising 1.8%, Hong Kong’s Hang Seng Index up 0.6% and Japan’s Nikkei up 1%. Mainland Chinese stocks were helped by global index provider MSCI’s decision to more than quadruple the nation’s weighting in its global benchmarks this year. Figures from China’s National Bureau of Statistics on Thursday showed the official manufacturing purchasing managers index dropped to its lowest level in three years in February, reinforcing concerns about global growth. Indian shares snapped three session losses as tensions with Pakistan eased. The S&P BSE Sensex closed 0.6% higher at 36,063.81. A weak GDP quarterly growth also raised hopes of a further rate cut by the central bank.

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