Australian market expected to open lower 17/10/19

Australian market expected to open lower 17/10/19

OPENING CALL: The Australian share market is expected to open lower. The SPI200 futures contract expected to open down 14 points.

Johnson & Johnson has offered to pay about $4 billion to settle all lawsuits in the U.S. accusing the company of contributing to the opioid-addiction epidemic


U.S. government-bond prices rose intraday after worse-than-expected economic data and signs of potential delays in a trade deal with China.  


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Australian shares rallied to a two-week high on broad gains outside the materials and technology sectors. Advancing for a fifth straight session, the S&P/ASX 200 closed 1.3% higher at 6736.5--its strongest one-day gain since end-August. 

Heavily weighted financial shares collectively gained 1.5%, and energy stocks rose 1.3%, though it was the consumer-staples sector that led with a 2.1% advance. Challenger jumped 5.0% after reporting a rise in 1Q assets under management, while Rio Tinto slipped 0.9% following the release of its quarterly production numbers and Oz Minerals rose 1.3% after posting output figures.  

U.S. stocks swung between small gains and losses intraday as economic data suggested consumers were holding back on spending in the face of trade tensions and a global economic slowdown.  

The Dow Jones Industrial Average rose 4 points, or less than 0.1%. The S&P 500 slipped 0.1%, and the Nasdaq Composite lost 0.3%. Global stocks, meanwhile, wavered as concerns lingered over Brexit talks and the prospect of a U.S.-China trade deal.  

Data from the Commerce Department Wednesday showed that U.S. retail sales slipped 0.3% in September, missing the expectations of economists polled by The Wall Street Journal who had predicted a 0.2% increase.  
That further fueled anxiety about growth in the U.S. and overseas. The International Monetary Fund this week cut its global GDP forecast for 2019 to just 3%, its lowest level since the 2008 financial crisis, citing trade tensions and geopolitics. It projected 3.4% growth in 2020.  

Gold prices ended higher as investors watched global political news surrounding trade and Brexit, and reacted to a weaker-than-expected reading of U.S. retail sales, which spurred some haven buying.  
Gold for December delivery on Comex rose $10.50, or 0.7%, to settle at $1,494 an ounce. It recouped much of the 0.9% decline see on Tuesday, when prices for the most-active contract settled at their lowest since Sept. 30, according to FactSet data. December silver , meanwhile, edged up by 4.3 cents, or 0.3%, to $17.427 an ounce, after a 1.8% decline on Tuesday.  
U.S. benchmark oil prices end the session 1% higher at $53.36/bbl. as U.S.-Iran tensions continue to simmer after a Sept. 14 attack on Saudi Arabia oil facilities that has been blamed on Iran.  

Some unconfirmed reports indicate the U.S. may have recently conducted a cyberattack of some sort against Iran in response to the mid-September attack.  
Oil investors now turn to weekly U.S. oil inventory data, starting with trade group API's report at 4:30 p.m. ET. EIA's official report will be released Thursday, and analysts surveyed by WSJ expect, on average, a 2.3M-bbl. rise in crude-oil stockpiles.  

The British pound was sent on a rollercoaster ride, spiking briefly against the U.S. dollar on a report that a big obstacle to a Brexit deal has been removed. The pound briefly jumped to a session high of $1.2839, which would make for its best level since June, after RTE reported that Northern Ireland's Democratic Unionist Party was accepting the so-called consent element of the revised Brexit agreement, seen as the last big obstacle to a deal.  

The U.K. has said it's open to some flexibility on the mechanism that would allow Northern Ireland politicians to decide whether it remains in regulatory alignment with the European Union as set out in Britain's latest Brexit deal proposals. The pound has since fallen back after the DUP's leader Arlene Foster reportedly denied the report and said talks will continue. Markets have been on a knife-edge in the runup to a two-day
European Union meeting that starts Thursday, seen as a deadline for a deal to get done. The pound has since drifted back to $1.2783.  

European shares closed broadly lower after Wall Street got off to a lackluster start amid caution about U.S.-China trade relations. The Stoxx Europe 600 dropped 0.1%, the FTSE 100 was down 0.6%, the CAC-40 fell 0.1% but the DAX rose 0.3%.  

The Shanghai Composite Index fell 0.4% after the U.S. House of Representatives passed a series of bills backing pro-democracy protesters in Hong Kong, drawing a strong rebuke from China. A Chinese Foreign Ministry spokesman warned the U.S. against meddling in Chinese affairs and said the bill would damage relations between the two nations.  
The development may complicate efforts to reach a trade agreement, analysts said.

Hong Kong stocks rebounded as developers and the city's rail operator gained after the government said it plans to boost housing supply, relax the mortgage-financing ceiling for first-home buyers and invest more in infrastructure.  

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