Monday 12th August 2019

OPENING CALL: The Australian share market is expected to open lower. The SPI Futures is expected to be down 22 points.

President Trump raised the possibility that trade talks with China could break off again, causing stocks to fall.

Chinese technology giant Huawei’s new operating system, called HarmonyOS, is intended to run on all of its consumer gadgets, as it races to develop backups to U.S. technology following its U.S. blacklisting.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian shares managed a third straight day of gains, narrowing losses for the week.

The S&P/ASX 200 settled at 6584.4, up 0.3%, but was down for a second straight week
with a fall of 2.7%.
Among the day’s big movers, James Hardie rallied 14% on the back of its full-year
results, and wealth manager AMP jumped 12% as it resumed trading following a capital
raising.
Suncorp advanced 4%, building on Wednesday’s strong gains following its annual report.
Most of the banks were firmer, although National Australia Bank weakened by 0.3% ahead of
a third-quarter update, due Wednesday.

US Markets

Stocks declined, capping a tumultuous week where investors ricocheted between risky and
safe assets as they reacted to the trade war and emerging currency fight between
Washington and Beijing.
President Trump in the morning suggested a meeting with China on trade might be
canceled, putting downward pressure on stocks. The S&P 500 dropped 0.7%, while the
tech-heavy Nasdaq Composite fell 0.3%. The Dow Jones Industrial Average lost about 90
points, or 0.3%. After all the big swings of recent days, all three major indexes closed
the week with modest drops of less than 1%.

Commodities

Gold futures finished little changed but booked substantial weekly gains, holding above
a psychologically important level at $1,500.
December gold on Comex closed down $1, or less than 0.1%, to settle at $1,508.50 an
ounce and marked a 3.5% weekly return based on the most-active contracts settlement last
Friday.
The weekly climb was the metal’s best since a 4.14% rise ended June 21, FactSet data
show. Worries about economic growth, Sino-American trade clashes, and falling government
bond yields have been a source of support for bullion in the past several weeks.

Oil Futures

Oil futures ended sharply higher, scoring back-to-back gains after slumping into a bear
market earlier this week, dragged down by concerns a prolonged trade war will sap energy
demand.
Analysts said the selloff went too far, leaving scope for a partial rebound.
West Texas Intermediate crude oil earlier this week ended more than 20% below its 2019
settlement high of $66.30 hit on April 23, which, by most definitions, marks a return to
bear-market territory. Brent also fell more than 20% from its late-April high-water mark,
according to Dow Jones Market Data. A 20% rise from its bear-market low would mark a
return to bull territory.
WTI for September delivery rose $1.96, or 3.7%, to end at $54.50 a barrel on the New
York Mercantile Exchange. Its 4.7% plunge to $51.09 Wednesday marked the lowest
settlement for the contract since Jan. 14, 2019, according to Dow Jones Market Data. The
contract ended the week with a 2.1% loss.

Forex

The ICE U.S. Dollar Index, a measure of the U.S. currency against a basket of six major
rivals, was down 0.6% this week.
That reflects, in part a 1.1% fall versus the Japanese yen, a traditional safe haven
asset, which was boosted by financial market volatility earlier this week after China
allowed its currency to fall.
The WSJ Dollar Index, which measures the currency against a basket of 16 others, was
little changed at 90.73.

European Markets

The Stoxx Europe 600 was down 3.15 points, or 0.84%, on the day and ended the week down
1.74% at 371.56.
The index now is down 19.17 points, or 4.91%, over the last two weeks.
The FTSE 100 continued to slide in afternoon trading, finishing the day down 0.4% amid
worsening trade tensions, news that the British economy had contracted in the second
quarter, and political turmoil in Italy signaling possible snap elections.
Meanwhile, the German DAX was down 151.61 points, or 1.28%, on the day and ended the
week down 1.50% at 11693.80. The French CAC was down 60.04 points, or 1.11%, on the day
and was down 0.58% at 5327.92 for the week.

Asian Markets

In Asia, China’s Shanghai Composite Index fell, while stocks in Japan and South Korea
posted gains.
The Nikkei closed 0.4% higher at 20684.82, lifted by consumer and telco stocks.
Investors are still watching for signs of further easing by central banks amid global
uncertainties. Among consumer stocks, Takashimaya closed up 1.1%, while Aeon ended 1.5%
higher.
South Korea’s Kospi rose 0.9% to 1937.75, extending its gains for a second session.
Tech and auto stocks led the benchmark index higher as investors saw an easing in the
U.S.-China trade war, for now, after China said it wouldn’t let the yuan fall
significantly. Still, how the yuan moves next week will likely affect the market and the
Kospi is likely to move in a 1890-1950 range, said Seoul-based NH Investment & Securities
market analyst Lawrence Kim.
Hong Kong stocks ended the day down as shares of industrial conglomerates and
developers lead the declines. The Hang Seng Index was 0.7% lower at 25939.30. Swire
Pacific shed 4.1%, making it the worst-performing stock on the HSI.
Malaysia’s benchmark share index lost steam at the end of the day to close slightly
lower, as investors seek to lock profits on some bluechips. The market breath, however,
was positive with gainers beating losers by 447 to 354. The Kuala Lumpur Composite Index
closed 0.1% lower at 1615.05. The market will be shut Monday for a local holiday.

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