Australian market expected to open lower 04/12/19

Australian market expected to open lower 04/12/19

 

OPENING CALL: The Australian share market is expected to open lower. The SPI200 futures contract expected to open down 90 points.

 

American shoppers increased their spending over the five-day shopping period between Thanksgiving Day and Cyber Monday, according to new data.  

 

 

 

President Trump’s comments at a NATO summit injected fresh uncertainty over the future of a “phase-one” trade deal between the U.S. and China.  

Overnight Summary

 

 

Each Market in Focus

 

 

 
Australia’s equities benchmark logged its sharpest one-day retreat in nearly nine weeks, tracking overnight weakness on Wall Street as hopes of an imminent trade deal between the U.S. and China faded.
 
With each industry sector deeply in the red, the S&P/ASX 200 fell 2.2% to close at 6712.3, underperforming major stock indexes in Asia-Pacific. The outcome of the Reserve Bank of Australia’s policy meeting, with the cash rate held steady, as expected, and suggestions of an extended period on hold, was shrugged off by the index even as the Australian dollar climbed against its U.S. counterpart.
 
The consumer-staples subindex sank 3.3% and the health-care and telecom sectors each lost 2.8%, while materials fared modestly better with a 1.4% decline thanks to gains by several gold stocks.  
 

The Dow Jones Industrial Average fell more than 350 points intraday after President Trump suggested a trade war with China could continue well into next year while also threatening new tariffs on several more countries.  

Twenty-nine of the 30 stocks in the blue-chip index fell, from tech giant Apple to drugstore owner Walgreens Boots Alliance. The index’s 1.3% decline would be its first drop of more than 1% since early October, if the losses hold through the closing bell.  

 The Dow industrials fell 364 points to 27417 in recent trading, on pace for its biggest single-day decline since Oct. 2. The S&P 500 declined 1%, while the Nasdaq Composite also slipped 1%.  

Shares of Caterpillar fell 2.1% along with other industrial stalwarts, including 3M and Boeing . Apple also fell, shedding 2.3%. Merck was the only blue-chip stock in the green, rising less than 0.1%.  
 

Banks stumbled alongside the pullback in bond yields, which tends to hurt lenders’ profitability. Shares of Goldman Sachs Group and JPMorgan Chase fell 2.8% and 1.8%, respectively.  

 
 
Gold futures marked their highest finish in nearly a month, finding haven-related buying interest after President Donald Trump said it might be preferable to hold off on completing a long-awaited U.S.-China trade deal until after the November 2020 presidential election.  
 
Gold for February delivery on Comex rose $15.20, or 1%, to settle at $1,484.40 an ounce.
 
 
Oil prices ended 0.3% higher at $56.10/bbl. in choppy, unsettled trading as investors gauge what OPEC and other major producers will do when they meet later this week to perhaps extend a production quota deal.  
 

Sterling’s rise to a six-week high of $1.3009 intraday seems to be more a function of a weaker dollar than the pound’s strength.

 GBP/USD was last up 0.4% at 1.2990. The WSJ Dollar Index was recently down 0.2% to 90.77.  

 French Finance Minister Bruno Le Maire threatened “strong European riposte” if the U.S. follows through on plans to place tariffs on a number of French goods.  

The Stoxx Europe 600 fell 0.6%, the FTSE 100 dropped 1.7% and the CAC-40 shed 1.0% while the DAX rose 0.2%

 
The Shanghai Composite Index ended the day up 0.3% while Japan’s Nikkei 225 gauge fell 0.6% before President Trump signaled that he might be willing to wait to strike a trade deal with China until after the U.S. elections next year.  

Consumer shares led declines on the Nikkei, with Nisshin Seifun Group shedding 2.7%, Nichirei Corp. losing 2.4% and Sapporo Holdings down 1.6%.  

Hong Kong stocks closed lower as oil majors and banks were broadly weaker. The Hang Seng Index ended down 0.2% at 26391.30. Among energy stocks that dragged the index, China Petroleum & Chemical Corp. 
 


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