Australian market expected to open higher 22/08/19

Australian market expected to open higher 22/08/19

OPENING CALL: The Australian share market is expected to open higher. The SPI Futures is expected to be up 27 points.


Target said sales and profit rose in the second quarter, sending shares on track for a record, as the retailer extended its growth streak from investments in its stores, merchandise, and digital capabilities.


The 2-year Treasury note yield, sensitive to shifting expectations for Federal Reserve policy, climbed 4.5 basis points to 1.559%. The 10-year note yield was up 1.3 basis points to 1.572%, while the 30-year bond as unchanged at 2.042%.


Overnight Summary



Each Market in Focus



Australian shares failed to build on strong gains seen the past two days, weighed by major banks and weakness in resources stocks. The S&P/ASX 200 closed down 0.9% at 6483.3, narrowing the advance so far this week to 1.2%.
Westpac led the heavily-weighted banks lower with a drop of 1.8%, while major miners BHP and Rio Tinto lost 2.9% and 2.5% respectively, and fellow iron-ore producer Fortescue declined 4.1%. A2 Milk surrendered 13% following its full-year result. Earnings remain in focus with numbers due out from the likes of Coles, Medibank, Origin Energy and Qantas on Thursday. 

U.S. stocks surged intraday after strong earnings reports from retailers eased some fears about slowing economic growth.
Bond and equity markets have been gloomy about global growth in recent weeks, with many investors expecting a cycle of monetary easing from leading central banks. Some of the anxieties surrounding growth were tempered Wednesday after retailers revealed their financial results for the last quarter.
The Dow Jones Industrial Average climbed 1%, and the S&P 500 jumped 0.8%. The Nasdaq Composite advanced 0.9%.
Target shares soared 19%, on track for a new high, as it reported that sales and profit rose in the second quarter and the retailer raised its earnings guidance for the year.
Lowe’s also reported higher profits that beat analysts’ estimates, pushing shares up 10%.
The consumer discretionary and tech sectors within the S&P 500 were the biggest winners.
On Friday, Federal Reserve Chairman Jerome Powell speaks in Jackson Hole, Wyo., at the Fed’s annual economic policy symposium. Several investors warned that markets could grow more turbulent as investors analyzed these comments. The Fed has been a primary driver for markets in recent weeks.

A recent rally in silver prices paused as upbeat retail earnings buoyed stocks and limited haven buying of the precious metal.
Silver for September delivery, the most-active futures contract, inched up less than 0.1% to $17.151 a troy ounce on the Comex division of the New York Mercantile Exchange in regular trading. They were down 0.2% in after-hours trading after minutes from the Federal Reserve’s July meeting showed officials saw their move to cut interest rates last month as a “recalibration” rather than the start of a more aggressive easing cycle.
Prices are still up about 11% since mid-July and recently hit their highest level in over a year, boosted by a bout of safe-haven buying with nervous investors seeking assets that tend to stay steady during times of market volatility.
Because silver has many industrial uses but also sometimes trades like a safe-haven metal such as gold, analysts have viewed its recent rally as a sign of investor caution.
The rise has come as gold prices have surged to six-year highs and other safe-haven assets such as the Japanese yen have also climbed.
A slew of interest-rate cuts around the world have fueled the flight to safety with some investors wary of a sharp slowdown in economic growth that hurts stocks and other risky assets. Following the Fed’s rate cut last month, some analysts expect the central bank to continue lowering borrowing costs to stabilize the U.S. economy.
Some analysts think the precious metals rally is overdone, citing steady U.S. consumer data points that have helped calm markets in recent sessions. Upbeat earnings from Target Corp. and Lowe’s Co s. pushed up stocks about 0.8% Wednesday.
In one sign of investor caution toward silver, hedge funds and other speculative investors cut net bets on higher prices in consecutive weeks through Aug. 13, Commodity Futures Trading Commission data show. The pullback in net bullish bets came after speculators pushed them to their highest level since November 2017 in late July.
Elsewhere in commodities, most-active Comex gold futures were unchanged at $1,515.70 a troy ounce, also pausing their recent rally.

U.S. oil futures settled lower after the government reported a weekly decrease in domestic crude supplies, the first in three weeks, but smaller than the market expected.
West Texas Intermediate crude for October delivery fell by 45 cents, or 0.8%, to settle at $55.68 a barrel on the New York Mercantile Exchange, following gains in each of the last three trading sessions. It was at $56.77 shortly before the supply data. The October contract for global benchmark Brent crude, however, rose 27 cents, or 0.5%, to $60.30 a barrel on ICE Futures Europe. On Tuesday, Brent finished above $60 for the first time in a week.
The Energy Information Administration on Wednesday reported that U.S. crude supplies fell by 2.7 million barrels for the week ended Aug. 16. That followed increases in each of the previous two weeks. Analysts polled by S&P Global Platts, on average, expected a decline of 3.1 million barrels, while the American Petroleum Institute on Tuesday reported a 3.5 million-barrel decrease.
The EIA data also showed that inventories of gasoline edged up by 300,000 barrels, while distillate stockpiles rose by 2.6 million barrels last week. The S&P Global Platts survey had shown expectations for a supply decreases of 1.6 million barrels for gasoline and 200,000 barrels for distillates.

The dollar was slightly higher after the release of minutes from the Federal Reserve’s July 30-31 meeting.
The WSJ Dollar Index was recently at 91.34 as the dollar registered modest gains against the Japanese yen but declines against the currencies of oil-producing nations such as Canada and Norway.

European markets closed firmly in positive territory ahead of the release of the U.S.
Federal Reserve minutes later. The FTSE 100 Index was 1.1% higher at 7203.97, the DAX gained 1.3%, the CAC-40 rose 1.7% and the pan-European Stoxx Europe 600 advanced 1.2%.
Among the biggest gainers on the Stoxx Europe 600 index was Pandora, the Danish jewelry group, which was up more than 13% after results on Tuesday spurred hopes that a restructuring plan was helping the business.

Japanese stocks closed lower as falls in banks and electronics sectors outweighed gains in several domestic demand stocks. Major bank Resona closed 1.2% lower and Olympus was off 2.3%, while beverage maker Asahi Group Holdings gained 2.5%. Nikkei ended down 0.3% at 20618.57.
Hong Kong’s benchmark Hang Seng Index finished up 0.2% at 26270.04, with investors bargain hunting in the wake of recent selloffs as local protests persist and external trade concerns linger. Chinese pharma companies led the gains, with Sino Biopharmaceutical rising 3.6% and CSPC Pharmaceutical up 3.5%.
India’s BSE Sensex closed lower as investors look at the government for a potential stimulus to boost the sagging economy. The index ended 0.7% lower to close at 37060.37, weighed by most constituents.
South Korea’s benchmark Kospi inched 0.2% higher to 1964.65, rising for the third consecutive session. The session was choppy after shares opened lower. Investors flirted between hopes of more economic stimulus and worries about global trade tensions.
Singapore’s benchmark FTSE Straits Times Index ended lower amid declines in several Asian markets as investors waited for the Fed’s Jackson Hole retreat this week. The FTSE Straits Times Index closed 0.4% lower at 3122.57, weighed by bank and property stocks.
Malaysian stocks closed lower, following a late downward adjustment. The Kuala Lumpur Composite Index closed 0.5% lower at 1594.59, at its lowest point for the day.

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