Thursday: 15th December 2016
Each Market In Focus
- The Australian share market is set to open lower, following Wall Street down after the US Federal Reserve hiked its benchmark interest rate and signalled a more aggressive pattern of increases in 2017.
- At 8.00 a.m. AEDT on Thursday, the local SPI 200 share price futures index was down 39 points, or 0.7 per cent, at 5539 points.
- On Wall Street, shares fell back from a recent run of record gains in the wake of the widely anticipated move by the US Federal Reserve to lift its benchmark interest rate by a quarter of one per cent to a range of 0.5 to 0.75 per cent – its first move in a year.
- The Fed also signalled three likely hikes in 2017, up from two previously.
- In local companies news, explosives manufacturer Orica will hold its annual general meeting on Thursday.
- Australian shares closed higher on Wednesday, with the benchmark S&P/ASX200 up 0.71 per cent at 5,584.6 points.
AUS Orica Limited (ORI.AU) Full year 2016 AGM
AUS G8 Education (GEM.AU) Q4 2016 Ex-dividend date
NZ Nov BNZ – BusinessNZ Performance of Manufacturing Index (PMI)
NZ Q3 Value of Building Work Put in Place
AUS Dec Consumer Inflationary Expectations Survey
AUS Nov Foreign Exchange Transactions and Holdings of Official Reserve Assets
AUS Dec RBA Bulletin
AUS Nov Labour Force
60 Day Low. This is a list of codes that made a new 60 day LOW in the past 2 days. We use the 60 day low as this would infer that a breakdown in price has occurred after a period of consolidation OR the stock is declining each day if the code shows repeatedly. The filter uses an above 50 cent price filter, and the codes in Blue are on our watch list. ( source Metastock)
- US stocks fell in volatile trading on Wednesday after the Federal Reserve raised interest rates by a quarter point and signaled hikes could come next year at a faster pace than some expected.
- The Fed’s decision comes as President-elect Donald Trump, who will be sworn in next month, is seen cutting taxes and increasing spending on infrastructure.
- Central bank policymakers shifted their outlook to one of slightly faster growth and lower unemployment.
- The Dow Jones industrial average fell 27.9 points, or 0.14 per cent, to 19,883.31,
- S&P 500 lost 6.02 points, or 0.26 per cent, to 2,265.7
- Nasdaq Composite dropped 7.17 points, or 0.13 per cent, to 5,456.66.
- Since the November 8 US presidential election, stocks have risen on bets that Trump will enact business-friendly policies and stimulate the economy.
- However, some market participants are concerned that equities are pricing in a very favourable scenario, leaving them vulnerable.
- Markets had all but priced in a rate increase at the Fed but the faster pace of increases seen next year may give traders an excuse to cash in the recent gains.
- Oil prices fell more than 3 per cent on renewed concerns about an oil glut sparked by rising US crude inventories in storage.
- Oil major Exxon declined 1.6 per cent and was among the largest drags on the Dow.
- Gold prices fell to a fresh 10-month low in aftermarket trading Wednesday, after the
- Federal Reserve announced an expected rate increase and officials said they planned to raise rates more often next year.
- Gold for February delivery was recently done 0.9% to $1,147.90 a troy ounce in electronic trading, its lowest level since early February.
- Prices closed up 0.4% at $1,163.70 a troy ounce in regular trading on the Comex division of the New York Mercantile Exchange.
- Copper priced edged lower in aftermarket trading Wednesday, after the Federal Reserve said it would raise rates at a faster-than-expected clip next year.
- Copper for March delivery was recently down 0.1% at $2.5970 a pound in aftermarket trading.
- Prices closed up 0.2% at $2.6045 a pound on the Comex division of the New York Mercantile Exchange.
- IRON ORE: $79.58 -0.89 ( December contract )
- Oil prices pulled back on Wednesday, weighed down by rising interest rates and concerns over the ability of major players to cut production.
- Light, sweet crude for January delivery settled down $1.94, or 3.7%, at $51.04 a barrel on the New York Mercantile Exchange, breaking a four-day winning streak in its biggest one-day decline since July.
- Brent, the global contract, settled down $1.82, or 3.3%, to $53.90 a barrel.
- On Wednesday, the Federal Reserve announced that it will raise interest rates by 25 basis points, prompting a reversal in the U.S. dollar.
- The WSJ Dollar Index was recently up 0.7% at 91.97.
- A stronger U.S. dollar is bearish for crude, which is priced in the U.S. currency and becomes more expensive for foreign investors.
- The dollar has risen to multiyear highs following the U.S. presidential election, in part boosted by expectations for economic expansion.
- The U.S. dollar soared Wednesday after the Federal Reserve said it would raise U.S. interest-rates for the first time in a year and hinted at more rate-increases next year.
- Fed officials said they would nudge up the federal-funds rate by a quarter percentage point on Thursday, while also indicating they see a brightening economic outlook and expect to raise short-term rates next year by another 0.75 percentage point — likely in three quarter-point moves.
- In a statement, the Fed pointed to firming inflation and strong labor market conditions.
- A faster pace of rate-increases would likely boost the dollar, as higher rates make the U.S. currency more attractive to yield-seeking investors.
- The Fed entered 2016 expecting to raise interest-rates four times. But the central bank has been repeatedly stymied by global market turmoil and weak economic data at home.
- Emerging-market currencies sold off, with the dollar up 0.6% against the Mexican peso, 0.9% against the Brazilian real and 1% against the South Korean won.
- Higher U.S. rates pressure emerging-market nations by making their dollar-denominated debt more expensive to pay back and their assets less attractive to yield-seeking investors.
- The Australian dollar has dropped sharply against the US dollar after the US Federal Reserve raised its benchmark interest rate by a quarter of one per cent at its December meeting and flagged three more increases in 2017.
- At 8.00 a.m. on Thursday, the local unit was trading at 74.13 US cents, down from 74.89 cents on Wednesday.
- European shares fell from an 11-month high on Wednesday, with Switzerland’s Actelion slumping after US healthcare company Johnson & Johnson ended discussions over a potential deal with Europe’s largest biotech firm.
- Actelion shares fell 9.2 per cent after J&J said it was not able to reach an agreement that it believed would create adequate value for its shareholders. J&J said in November it was in preliminary talks about a takeover of Actelion, then valued at about $20 billion.
- Sources said Actelion was now in talks with French drugmaker Sanofi about a deal. Sanofi shares fell 2.6 per cent.
- Colruyt also put pressure on the broader market as its shares fell 9.4 per cent after the Belgian supermarket group announced results late on Tuesday. Even though net profit beat market expectations investors were disappointed by its weak growth outlook.
- The pan-European STOXX 600 ended down 0.5 per cent, with healthcare and consumer staples sectors the biggest drags on the benchmark index.
- In London the FTSE100 finished down 19.38 points, or 0.28 per cent, at 6949.19.
- Italian banks fell 2.8 per cent. Rating agency Moody’s changed its outlook on the Italian banking sector to negative from stable late on Tuesday due to increasing capital needs and weakening confidence.
- Shares in Monte dei Paschi di Siena fell 2 per cent as the troubled Italian lender confirmed the European Central Bank had rejected its request for more time to raise capital.
- German retailer Metro jumped 3.6 per cent after reporting better than expected fourth-quarter operating profit for the food and consumer electronics businesses it hopes to split in a demerger next year.
- Mediaset extended the previous session’s 30 per cent rally and was up 1 per cent as top shareholder Fininvest and Vivendi both raised their stakes in the Italian broadcaster. Mediaset shares have jumped more than 75 per cent in about two weeks.
- Hong Kong stocks were flat on Wednesday, despite Wall Street’s gains and sustained strength in energy shares, as investors cautiously awaited results of a Federal Reserve meeting.
- The Hang Seng index was unchanged at 22,456.62, while the China Enterprises Index lost 0.1 per cent, to 9,706.15 points.
- Sector performance was mixed, with gains in energy majors countered by declines in materials and utilities shares.
- Expectations of rising oil prices gave energy shares a boost, after OPEC and some non-OPEC oil producers agreed at the weekend to cut output.
- Shares of real estate developers fell for a third day, hurt by rising borrowing cost concerns. The city’s currency peg toward the greenback ensures that interest rates follow those of the US.
- The S&P/NZX 50 Index fell 52.34 points, or 0.8 per cent, to 6,797.87. Within the index, 28 stocks fell, 20 rose and three were unchanged. Turnover was $163
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