Thursday 8th November 2018

OPENING CALL: The Australian market looks to open higher with SPI futures up 42 points.

Australia’s stock index rose for the eighth trading day out of nine on Wednesday, though it has trailed the bigger gains seen in much of Asia so far today.
U.S. Stocks Surge After Elections

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australia’s stock index rose for the eighth trading day out of nine on Wednesday, though it has trailed the bigger gains seen in much of Asia so far today. After morning weakness, the ASX 200 finished up 0.4% at 5896.9. The heavily weighted financial sector gained 0.6% as earnings season for the big banks wraps up. Consumer-discretionary stocks added 0.7%. But materials edged lower following overnight weakness in metals prices. Utilities fell 0.2%.

US Markets

The Dow Jones Industrial Average surged 500 points as U.S. stocks extended a recent rebound Wednesday, surging as a congressional power divide eased worries about swift policy changes that could hurt large companies. The blue-chip index was up 2.1%. The S&P 500 rose 2.0%, heading for one of its best sessions of 2018 as all 11 sectors posted gains. Both indexes were on track for their sixth advance in the past seven sessions. The Dow is about 3% below its recent record, while the S&P 500 is roughly 4.5% off its September peak. The tech-heavy Nasdaq Composite climbed 2.4% Wednesday and, like the Dow and S&P 500, was on track for its highest close in about three weeks.

Commodities

Gold prices edged higher, supported by a falling dollar. Gold for November delivery rose 0.2% to $1,226.20 a troy ounce on the Comex division of the New York Mercantile Exchange. A hawkish message from the Federal Reserve at the conclusion of its monetary policy meeting Thursday could weigh on prices for gold, an asset that struggles to compete with yield-bearing investments when rates rise. In base metals, copper for December delivery rose 0.8% to $2.7525 a pound.

IRON ORE: 71.89 + 0.14 (December contract)

Oil Futures

Oil prices fell for an eighth straight session, the longest losing streak since July 2014, after a report showed U.S. crude oil inventories rose for a seventh straight week and U.S. oil production soared to a record. Light, sweet crude for December delivery ended 0.9% lower at $61.67 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, fell 0.1% to $72.07 a barrel. The U.S. benchmark fell as low as $61.20 a barrel intraday Wednesday, putting it on the cusp of a bear market, which is generally defined as a decline of 20% from the recent peak. Prices would have to break below $61.13 a barrel to enter a bear market.

Forex

The U.S. dollar weakened against its major rivals as investors digested the results of the U.S. midterm election, in which Democrats took control of the House of Representatives but Republicans held on to the Senate. The greenback’s weakness on the back of a Democratic victory was expected, reflecting skepticism that the stimulus bonanza, including further tax cuts, that had fueled the dollar’s rally in the first half of the year, would continue under a split Congress.The ICE U.S. Dollar Index which compares the buck against six rivals, was down 0.3% at 96.040. The popular gauge bounced back from its low point earlier in the session where it had touched a 2½-week low. The dollar’s biggest rival, the euro rose in lockstep, last buying $1.1450, up from $1.1427 late Tuesday. Just as the dollar index came off its lows, the euro pulled back from its high, which had breached the $1.15-level. Similarly, the British pound was stronger, fetching $1.3143 versus $1.3099. Emerging-market currencies also rode the wave of the weak buck, with the South African rand as one of the top gainers.

European Markets

The Stoxx Europe 600 index ended up 1.1% at 366.39 as European stocks got a boost from U.S. midterm elections that resulted in the Democrats gaining control of the House and the Republicans holding the Senate. Fresenius Medical Care was the biggest riser, up 9.6% after California voters rejected a bill aimed at capping the amount insurance companies pay for dialysis care. Miners rose as a weaker dollar lifts metals prices. Germany’s DAX ended up 0.8%, France’s CAC 40 up 1.2% and the U.K.’s FTSE 100 up 1.1%. Spain’s IBEX 35 ended up 2% as banks jumped after Spain’s Supreme Court said customers, not banks, would have to pay a mortgage-related tax.

Asian Markets

Stocks in Asia showed a more muted reaction to the midterm results, with major indexes struggling for direction. Hong Kong stocks closed up 0.1% after earlier rising more than 1%. Japan’s Nikkei Stock Average fell 0.3%, with shares of auto makers declining as the yen strengthened against the dollar.

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