Wednesday 13th February 2019

OPENING CALL: The Australian market looks to open higher with SPI Futures up 29 points.

Aussie stocks ended a two-day pullback amid what’s proven to be wide gains in Asia Pacific outside of Southeast Asia.
The Dow Jones Industrial Average climbed more than 350 points intraday as optimism that U.S. and Chinese negotiators were making progress toward a broad outline of a trade agreement eased some of investors’ trepidations.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Aussie stocks ended a two-day pullback amid what’s proven to be wide gains in Asia Pacific outside of Southeast Asia. The ASX 200 rose 0.3% to 6079.1 as the energy sector bounced 1.2% and materials climbed 0.65%. Health care and utilities also rose 0.9%. But financials lost a little more after the day’s retreat.

US Markets

The Dow Jones Industrial Average climbed more than 350 points intraday as optimism that U.S. and Chinese negotiators were making progress toward a broad outline of a trade agreement eased some of investors’ trepidations. Shares of everything from industrial manufacturers to technology giants rose as investors cheered the potential for a trade deal and an agreement in principle among U.S. lawmakers to avoid a partial government shutdown. The Dow industrials and other major indexes were on track for their biggest daily gains of the month. The 2019 stock rally-fueled in part by signs the Federal Reserve will pause its bid to raise interest rates had appeared on shaky ground lately after downbeat economic data and signs that trade negotiations weren’t progressing upended investors’ newfound optimism. The latest developments, though, helped restore faith in the rebound. The Dow industrials and the S&P 500 are both up roughly 9% this year, leaving the two indexes off 5.2% and 6.3%, respectively, from their records last year. The Nasdaq Composite, which has gained nearly 12%, remains down 8.6% from its last record. The Dow industrials surged 374 points, or 1.5%, to 25427 in recent trading, while the S&P 500 added 1.3% and the Nasdaq Composite gained 1.4%.

Commodities

Gold settled higher, with the dollar on track to end its stretch of eight straight
wins. The yellow metal had ended Monday with a 0.5% loss as the leading dollar index traded at its highest levels since December, cutting demand for investors buying precious metals using currencies other than the U.S. unit. April gold tacked on $2.10, or 0.2%, to settle at $1,314 an ounce. The SPDR Gold Shares ETF rose 0.3% in dealings.

Iron Ore: 83.20s – 4.49 (March Contract)

Oil Futures

Oil prices rose alongside stocks and other commodities, boosted by improved appetite
for risk assets by a potential deal in Washington to avoid another partial government shutdown this week and optimism about a U.S.-China trade agreement. West Texas Intermediate futures, the U.S. oil standard, rose 69 cents, or 1.3%, to $53.10 a barrel on the New York Mercantile Exchange. Prices have wobbled recently but are still up 17% for the year, though they remain 31% below their October multiyear highs. Brent crude, the global oil benchmark, climbed 91 cents, or 1.5%, to $62.42 a barrel on London’s Intercontinental Exchange. Crude followed stocks higher on news that U.S. lawmakers had reached an agreement in principle on a sweeping deal to end a monthslong fight on border security and avoid a partial government shutdown.

Forex

The U.S. dollar weakened intraday as investors are cautiously optimistic about this
week’s trade talks between the U.S. and China. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, declined 0.2% to 89.86. The dollar fell 0.4% against the euro and 0.2% against the British pound. The dollar fell as negotiation teams from the U.S. and China are meeting this week to narrow the gap between concessions China is willing to offer and what the Trump administration will accept. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are expected to engage in meetings with high-level Chinese officials later this week. Investors have become somewhat more optimistic following the resumption of trade talks this week, though they remain aware that there is still much ground separating both parties.

European Markets

The Stoxx Europe 600 finished 0.5% higher at 362.78 as auto makers and suppliers rallied after Michelin reported better-than-expected 2018 results. The tire-maker’s shares rose 11%, Pirelli advanced 6.1% and French car-seat maker Faurecia gained 4.75%. The DAX gained 1% and the CAC 40 was up 0.8%. TUI’s euro-denominated shares fell 7.45% after the tour operator posted a wider than-expected first-quarter loss and warned that a weaker pound due to Brexit was hitting summer bookings.

Asian Markets

Asian markets were higher, led by Japan’s Nikkei, which gained 2.6%. Hong Kong’s Hang Seng Index gained 0.1% and the Shanghai Stock Exchange was up 0.7%. Investor sentiment was buoyed by an agreement in principle among U.S. lawmakers late Monday, which would avoid another partial U.S. government shutdown later this week. Indian shares extended losses for the fourth straight session despite a firm global trend. Investors remained cautious because of weak corporate earnings of auto companies, leading to a fall of 0.7% in the S&P BSE Sensex to 36,153.62.

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