Australian market expected to open flat 25/07/19

Australian market expected to open flat 25/07/19

OPENING CALL: The Australian share market is expected to open flat.

 

Boris Johnson formally became Britain’s prime minister and immediately set about assembling a team of ministers and advisers to prepare an all-out push to get the U.K. out of the European Union by the fall.

 

Decline in yield on 10-year Treasury inflation-protected securities has been especially persistent.

 

Overnight Summary

 

 

Each Market in Focus

 

 

Australia’s S&P/ASX is near its all-time closing high after a second day of broad gains lifted the closely-watched index to a fresh, near-12-year high. Banks and industrials led the charge, more than offsetting weakness in materials as miners BHP, Rio Tinto and Fortescue was dragged by falling iron-ore futures in China.
The S&P/ASX settled up 0.8% at 6776.7, within reach of the 6828.7 record. The broader All Ordinaries index, meanwhile, set a new closing high of 6862.4 after advancing 0.7%, but remains shy of the intraday peak set early November 2007. Westpac ended 1.7% higher,
as did National Australia Bank after a fourth straight session of gains. Beach Energy was steady after quarterly production numbers, but Sandfire fell 4% and Iluka dropped 10%. 

The S&P 500 climbed, as chipmakers rallied, helping the broad index eke out a gain and overcome losses that followed disappointing earnings from industrial giants Caterpillar and Boeing.
Shares of semiconductor companies broadly rose, pulling the S&P 500 higher after Texas Instruments reported better-than-expected earnings for the second quarter and offered upbeat guidance on the chip industry for the months ahead.
The gains nudged the S&P 500 back into positive territory later in Wednesday’s session, overcoming steep losses in other corners of the stock market. Shares of industrial giants Caterpillar and Boeing both stumbled after reporting lackluster earnings results and continued to weigh on the price-weighted Dow Jones Industrial Average throughout the trading session, keeping the blue-chip index in the red.
Caterpillar and Boeing aside, corporate earnings have been mostly topping expectations, giving major U.S. stock indexes a boost this week. Of the 138 S&P 500 companies to release results, 78% have exceeded analysts’ projections, according to FactSet, with more than half of reporting companies notching solid gains in their share prices.
The S&P 500 added 0.2% in recent trading, while the Nasdaq Composite added 0.5%. The Dow industrials fell 117 points, or 0.5%, to 27232.
Although earnings and expectations of an interest-rate cut by the Federal Reserve have aided stocks’ climb in recent weeks, the market continues to face several risks, from trade tensions between the U.S. and China to slowing global growth. That is hurting some companies.

Gold futures ended higher as downbeat economic data fed expectations for easier monetary policies by major central banks, a day ahead of a meeting of the European Central Bank.
Europe’s central bank on Thursday is expected to lay the groundwork for an interest-rate cut, while the U.S. Federal Reserve is seen cutting key interest rates next week.
August gold on Comex gained $1.90, or 0.1%, to settle at $1,423.60 an ounce, though prices ended the session well below the session’s high of $1,430. Prices declined by 0.4% on Tuesday.
In other metals dealings, September silver, extended its climb to its highest level in more than a year, rising 15 cents, or 0.9%, to $16.626 an ounce–tallying its eighth gain in nine sessions. It settled at its highest since June 14, 2018, according to FactSet data.

Oil prices shed early-session gains to end with a 1.3% loss to $55.88/bbl as investors shrugged off another bullish decline in U.S. oil inventories, and instead fret over indications fuel demand may be slowing as global economies weaken.
Prices initially climbed more than 1% after the EIA said U.S. oil inventories fell by a huge 10.8 million barrels last week.
But Kyle Cooper at ION Energy notes the data also showed “both gasoline and distillate exports fell with distillate exports falling below 1 million BPD for only the second time in 26 weeks. While the report overall was bullish, the refined product could potentially be flashing bearish fundamental data.”

The WSJ Dollar Index, which measures the US currency against a basket of 16 others, falls slightly to 90.41 from 90.47 Tuesday.
After recent sharp falls, the pound rises to its strongest level in a month against the euro as Boris Johnson takes up his position as Prime Minister, but ING advises selling into strength.

In Europe, stocks edged slightly higher. The Stoxx Europe 600 added less than 0.1%, as tech and automakers in the region posted gains.
Luxury sports-car manufacturer Aston Martin’s shares plunged 23% after the company slashed profitability targets and downgraded production goals for the year. Chief Executive Andy Palmer said wholesale performance was impacted by “macroeconomic uncertainty and enduring weakness in the U.K. and European markets.”
Deutsche Bank fell 2.9% after it reported a loss of $3.51 billion due to restructuring costs.
Shares of U.K. chemicals company Croda International dropped 4% after it reported its earnings fell in the first half and said its personal care business had been impacted by the U.S.-China trade dispute.
The poor performance in the eurozone’s two largest economies, France and Germany, added to expectations for a fresh stimulus drive from the European Central Bank on Thursday, said Claus Vistesen, chief European economist for Pantheon Macroeconomics.
Eurozone purchasing managers index data released Wednesday offered further signs of an economic slowdown in the region. 

Hong Kong’s Hang Seng Index closed up 0.2% at 28524.04, gaining for a second straight day following reports that U.S-China trade talks are expected to resume next week.
Mainland stocks also rose, with the Shanghai Composite Index up 0.8%.
Signs of cooling trade tensions and hopes of monetary easing may have lifted the stocks, but the HSI will likely remain within a narrow range as the market awaits the result of the Fed meeting at the end of the month, China Galaxy Securities says. China Resources Land was the top gainer, adding 3.5%. Sunny Optical Technology and Geely Automobile also both climbed over 3%.
Indian shares fell for the fifth consecutive day, brushing aside gains on many other Asian markets. India’s BSE Sensex closed 0.4% lower at 37847.65. Financials were among the main losers amid a mixed bag of results.
Singapore shares give up early gains to close slightly lower, weighed mainly by some property names. The FTSE Straits Times Index settles 0.1% lower at 3368.44. 


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