Thursday 15th November 2018

OPENING CALL: The Australian market looks to open unchanged.

Australia’s stock benchmark steadily fell throughout today’s trading, leaving it back near last month’s lows and substantially underperforming the rest of Asia Pacific thanks
to oil’s 7% overnight plunge.
Declines in financial and technology stocks, along with lingering worries about slowing global growth, dragged U.S. stocks lower again intraday.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australia’s stock benchmark steadily fell throughout today’s trading, leaving it back near last month’s lows and substantially underperforming the rest of Asia Pacific thanks to oil’s 7% overnight plunge. With crude prices falling a bit further in Asian trading, the ASX 200 ended down 1.7% at 5732.8. The index’s energy subsector slid 2.6% to build on yesterday’s 1.9% drop. Meanwhile financials, materials and healthcare dropped a little more than 2%.

NEW ZEALAND STOCKS:
A steady slide this afternoon for New Zealand stocks was in contrast to the rebound seen in other markets so far today after fresh early weakness. Sliding amid sharp energy-fueled declines in Australia and weakness in major banks there, the NZX 50 ended down 0.4% at 8827.74 despite an 11.5-point end-of-session adjustment higher. A2 Milk dropped 2.8% while Fisher & Paykel Healthcare lost a further 1.8%.

US Markets

Declines in financial and technology stocks, along with lingering worries about slowing global growth, dragged U.S. stocks lower again intraday. For the second straight session major indexes attempted to stage a rebound shortly after the opening bell but fell short. Stocks opened modestly higher both days but then turned lower without a clear catalyst. Shares of big banks like Bank of America and JPMorgan Chase dropped more than 2%, while Apple slumped 2.5% and Netflix declined more than 3%. Stocks’ failure to gain momentum after a modest advance in the wake of last week’s midterm elections has made some investors nervous that ongoing anxiety about a weaker global economy and tighter financial conditions could continue. That’s why declines in individual sectors such as technology and financials have spread so quickly, analysts said. The Dow industrials fell 210 points, or 0.8%, to 25077, while the S&P 500 also fell 0.8%. The blue chips are on track for their fourth consecutive session of declines, while the S&P 500’s losing streak is set to extend to five sessions. The tech-heavy Nasdaq Composite slumped 0.8% after rising about 1% shortly after the opening bell. Slumping Treasury yields dragged down bank shares as lower yields tend to hurt lending profitability. The S&P 500 financials sector fell 1.9%. Outsize declines in fast-growing internet companies also continued to stoke broader volatility. Some analysts worry that revenue growth for those firms is peaking, removing a key source of support for U.S. stocks. Microsoft and Amazon.com fell about 1%. Some investors say recent lukewarm revenue targets from internet companies were a sign that they aren’t immune to slowing global growth and trade tensions. Economic data in Europe and China added to those concerns Wednesday, analysts said.

Commodities

Metals prices were broadly higher as the dollar edged down and U.S. consumer prices rose in October at the fastest pace since the beginning of the year. Gold for November delivery recently rose 0.73% to $1,207.90 a troy ounce on the Comex division of the New York Mercantile Exchange. Meanwhile copper for November delivery added 0.84% to $2.7095 a pound. Gold is sometimes used as a hedge against inflation, and thought to hold its value better than other assets when consumer prices rise. Base metals have taken a hammering so far this year on worries that the U.S.-China’s trade spat could drag on Chinese economic growth and in turn stymie metals demand. However, underlying copper demand has been resilient in recent months, with local premiums remaining buoyant. Chinese fixed-asset investment and industrial production numbers on Wednesday also provided support.

IRON ORE: 71.56s + 0.46 (December contract)

Oil Futures

Oil prices rebounded slightly from Tuesday’s plunge as investors weigh concerns that global output could outstrip demand against potential supply cuts from the Organization of the Petroleum Exporting Countries and its allies. Light, sweet crude for December delivery ended 1% higher at $56.25 a barrel on the New York Mercantile Exchange. Brent crude ended up 1% at $66.12 a barrel. Wednesday’s price-increase in the U.S. crude-oil benchmark, known as West Texas Intermediate, ended a 12-session losing streak for WTI that was the longest of all time going back to 1983 when crude oil futures first began trading in New York. WTI had its steepest plummet in over three years on Tuesday, ending 7.1% down at its lowest closing price this year, $55.69 a barrel, while Brent closed down 6.6%. Both benchmarks have slid roughly 25% since reaching four-year highs at the start of October, leaving them well into a bear market, which is roughly defined as a 20% decline from a recent peak.

Forex

The British pound rose against its main rivals in up-and-down action, after U.K. Prime Minister Theresa May said she won her cabinet’s backing for an orderly withdrawal from the European Union, setting the stage for further votes on Britain’s exit from the EU. The pound was trading at $1.2995 against the dollar, versus $1.2969 late Tuesday. The sterling had traded as low as $1.2869 earlier in the session, before rising above $1.3030. The draft will head to an EU summit meeting later this month, where a tougher vote on Parliament will proceed. Irish Prime Minister Leo Varadkar said the meeting could be as soon as Nov. 25.

European Markets

The Stoxx Europe 600 drops 0.6%, or 2.17 points to 362.27 as political uncertainty dampens market sentiment. The DAX drops 0.5% and the CAC 40 is down 0.65%.

Asian Markets

In Asia, Hong Kong’s Hang Seng fell 0.5% while Japan’s Nikkei Stock Average was up 0.2%. China’s benchmark Shanghai Composite Index fell 0.9%. In China, business activities were mixed in October, as retail sales grew at the slowest pace in five months, while growth in industrial output and investment accelerated. The data came as investors watched for the latest moves in the trade spat between U.S. and China. The countries have renewed talks on trade ahead of a meeting between President Trump and President Xi Jinping, set for the end of November at the Group of 20 nations summit in Buenos Aires.

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