Tuesday 13th August 2019

OPENING CALL: The Australian share market is expected to open lower. The SPI Futures is expected to be down 52 points.

Argentina’s peso had its worst fall in at least a decade and stocks plunged amid investor concerns about the potential return to power of the country’s populist Peronist movement

Antigovernment demonstrators shut down Hong Kong’s airport and stranded thousands of passengers, protesting what they say is police brutality in handling weeks of unrest.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian shares edged into positive territory with a late recovery as investors
remained cautious with earnings season gathering pace this week and lingering trade
worries in the background. Up for a fourth straight session, the S&P/ASX 200 settled at
today’s high with a rise of 5.9 points to 6590.3.
The heavily weighted Big Four banks underpinned the gains, adding 0.4%-0.7%, while
retailer JB Hi-Fi rallied 10% to an all-time high after its full-year earnings topped its
guidance. Ansell gained 6.0% as investors welcomed its annual report. The big mining
stocks countered, with Rio Tinto down 2.8%, Fortescue losing 4.0% and Newcrest 3.3%
weaker.

US Markets

U.S. stocks fell as a wave of selling that analysts attributed to mounting doubts about
a trade deal pulled lower everything from bank stocks to shares of technology companies.

Worries about the path of U.S.-China trade negotiations and the global economy have
kept stocks and bond yields under pressure for much of the month. Goldman Sachs analysts
said Monday that the outlook for trade talks had “collapsed,” adding that they believe
Washington and Beijing won’t reach an agreement before the 2020 elections.
Growing uncertainty has contributed to the markets’ volatile streak in recent weeks. At
one point midafternoon, selling pressure unexpectedly picked up, dragging the Dow Jones
Industrial Average down as many as 462 points before it pared losses. Analysts said there
were no obvious catalysts for the move.
The Dow industrials were recently down 402 points, or 1.5%, to 25884. The S&P 500
declined 1.3%, and the Nasdaq Composite fell 1.4%.
Few believe the U.S. is headed toward an imminent downturn just yet. But many worry
that the gloomy outlook reflected in bond markets-where yields across the globe have
dropped in recent months-could soon be reflected in stocks too.
Bank stocks took a fresh hit Monday as U.S. Treasury yields retreated again, with
Citigroup , Bank of America and Morgan Stanley each losing more than 2%. Declining bond
yields tend to weigh on banks by cutting into their lending profits.
Semiconductor firms also lost ground, with Nvidia down 2% and Advanced Micro Devices
losing 5.2%. Much of the group has pulled back in recent weeks as investors have grown
more pessimistic about the prospects of a U.S.-China trade agreement.
Other proxies for investors’ trade optimism also slipped Monday, with Caterpillar and
farm machinery maker Deere down 2.4% and 4.8%, respectively.

Commodities

Gold futures finished higher, near a six-year peak above $1,500-an-ounce set last week,
as the U.S.-China trade battle showed few signs of letting up, and as demonstrations in
Hong Kong heightened fears about the health of global markets and economies.

Oil Futures

U.S. oil prices ended the session 0.8% higher at $54.93/bbl. despite declines in U.S.
equities and other markets due to ongoing worries about the global and U.S. economy.
Brent, the global benchmark, ended 0.1% higher at $58.57.

Forex

The dollar has strengthened 29% against the Argentine currency. Meanwhile, the WSJ
Dollar Index was down less than 0.1% at 90.74 as the dollar weakened 0.3% against the yen
amid a broad move to safer assets.

European Markets

The Stoxx Europe 600 edged down 0.3%, weighed down by declines among lenders and travel
and leisure stocks.
Among the biggest gainers in the region was Tullow Oil, whose shares rose 20% after the
company said it had found more oil off the coast of Guyana.

Asian Markets

Hong Kong’s Hang Seng Index closed 0.4% lower, after the city’s airport authority
canceled more than 100 flights. That was in response to thousands of demonstrators
thronging the airport to protest police for their handling of this summer’s protests.
The Shanghai Composite Index climbed 1.5% as the Chinese central bank continued to
weaken the yuan, though at a slower pace than traders had expected. That eased concerns
of a sharp devaluation after President Trump last week accused China of manipulating its
currency.

South Korea’s benchmark Kospi edged up 0.2% to 1942.29. The index is higher for the
third-straight session, helped by bargain hunting in tech shares after their recent
weakness. The index eked out late-session gains in choppy trade with investors flirting
between expectations for more Chinese stimulus and concerns regarding the ongoing
U.S.-China trade dispute

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