Thursday: 18th May 2017
Each Market In Focus
The Australian share market is poised to follow the major US indices into the red at the open amid escalating concern over the stability of US President Donald Trump’s administration
At 7.00 a.m. AEST on Thursday, the local share price futures index was up down 62 points, or 1.1 per cent, at 5,720.
The local unit was worth 74.31 US cents, up from 74.22 US cents late on Wednesday.
It was a different story elsewhere, as the Australian dollar continued to fall against the yen and the euro.
Australian banking stocks look set to fall after the S&P bank sub-sector on Wall Street dropped four per cent, led by a 5.9 per cent decline in Bank of America shares anda 3.8 per cent loss for JPMorgan.
In local news on Thursday, the Australian Bureau of Statistics publishes its labour force figures for April.
60 Day High. This is a list of codes that made a new 60 day High in the past 2 days. We use the 60 day high as this would infer that a breakout in price has occurred after a period of consolidation OR the stock is moving up each day if the code shows repeatedly. ( source MetaStock )
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. ( source Metastock)
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- The S&P 500 and the Dow notched their biggest one-day fall since September 9 as investor hopes for tax cuts and other pro-business policies faded after reports that US President Donald Trump tried to interfere with a federal investigation set off alarm bells on Wall Street.
- Former FBI chief James Comey said in a memo that Trump had asked him to end a probe into former National Security Adviser Michael Flynn’s ties with Russia, the reports said.
- That was only the latest worry in a tumultuous week at the White House after Trump unexpectedly fired Comey and reportedly disclosed classified information to Russia’s foreign minister about a planned Islamic State operation.
- The developments intensified doubts that Trump would be able to follow through on his promises for tax cuts, deregulation and fiscal stimulus.
- Those pledges had helped fuel a record-setting post-election rally on Wall Street.
- Selling accelerated late in the afternoon of one of the busiest trading days in months and the three major indexes ended near session lows.
- Both the Dow and S&P 500 fell below their 50-day moving average for first time since late April.
- The S&P began the session 0.74 per cent lower, the largest gap down since March 30, 2009, when it opened trading with a 0.84 per cent drop.
- The Dow Jones Industrial Average fell 372.82 points, or 1.78 per cent, to 20,606.93, the S&P 500 lost 43.64 points, or 1.82 per cent, to 2,357.03 and the Nasdaq Composite
dropped 158.63 points, or 2.57 per cent, to 6,011.24.
- Nasdaq had its steepest one-day loss since June 24, after Britain voted to exit the European Union, as did S&P’s financial and technology sectors. The financial sector closed down 3.0 per cent while the technology sector fell 2.8 per cent.
- The S&P bank sub-sector dropped 4.0 per cent, led by a 5.9 per cent decline in Bank of America shares and a 3.8 per cent loss for JPMorgan.
- Nine of the 11 major S&P 500 sectors fell with the only gain from utilities and real estate, defensive sectors with predictable if slow growth and high dividends.
- Gold prices rose to a two-week high as the latest tumult in the Trump administration raised concerns over its ability to carry out key plans for fiscal stimulus.
- IRON ORE: $69.51 +1.27% (May contract )
- Crude oil prices rose, after U.S. data showed that stockpiles of oil and fuel continued to drop and oil production fell for the first time since February.
- U.S. crude futures settled up 41 cents, or 0.84%, to $49.07 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 56 cents, or 1.08%, to $52.21 a barrel on ICE Futures Europe.
- U.S. oil stocks fell by 1.75 million barrels last week — the sixth consecutive weekly decline — as refiners ramped up their purchases of crude, according to the U.S. Energy Information Administration.
- The U.S. dollar sank Wednesday, on track to give back its postelection rally as confidence in the Trump administration’s ability to deliver on its economic proposals wanes.
- Investors fear that political turbulence in Washington is eroding the Trump administration’s ability to deliver on its tax reform and fiscal spending proposals.
- Those plans were expected to boost U.S. economic growth and helped propel the dollar to a 14-year-high after the election.
The administration has been rocked by reports that President Donald Trump allegedly asked then-FBI Director James Comey to back off the investigation of former nationalsecurity adviser Michael Flynn, which prompted some congressional Republicans to call for further investigation.
That came after reports that Mr. Trump shared classified information with Russian officials, a disclosure that could have far-reaching consequences for U.S. national security.
The dollar slid 1.5% against the Japanese yen, which investors often flock to during times of market uncertainty. Other assets seen as safe, including the Swiss franc and gold, also strengthened.
The political turbulence is the latest blow to the dollar, which has been falling since early January. Weak U.S. economic data, accelerating growth abroad and questions over the Federal Reserve’s path for raising interest rates have led investors to pare their bullish dollar positions.
- The Australian dollar edged higher against the US dollar, which fell along with the major US share markets on worries over the stability of the Trump administration.
- At 7.00 a.m. AEST on Thursday, the local unit was worth 74.31 US cents, up slightly from 74.22 US cents late on Wednesday.
European shares fell on Wednesday amid a global pullback in stock markets as worries about political turmoil in the United States led investors to seek safety after a strong run sent regional benchmarks to record highs.
The pan-European STOXX 600 fell 0.3 per cent, as major regional benchmarks tracked a global dip in stocks and the dollar as concerns over US President Trump multiplied.
Euro zone blue chips and the bloc’s broader index of stocks both dropped 0.6 per cent.
Britain’s FTSE 100 on the other hand hovered close to its record high hit on Tuesday, outperforming European peers as gains among miners supported it.
Despite their falls on Wednesday, European benchmarks remain near recent highs, having risen sharply as investors pile in to the region on the back of an economic recovery, robust company earnings and voters’ rejection of populist parties in elections.
Asian stock benchmarks were mostly lower on Wednesday as investors watched for the latest developments in the standoff between US President Donald Trump and his former FBI director.
Japanese shares fell as the yen gained against the dollar.
Japan’s Nikkei 225 fell 0.5 per cent to 19,814.88 and South Korea’s Kospi dipped 0.1 per cent to 2,292.16.
Hong Kong’s Hang Seng index slipped 0.2 per cent to 25,295.01.
Shanghai Composite Index edged down 0.2 per cent to 3,106.17 and Taiwan’s benchmark index fell, but markets in Southeast Asia were mixed.
The benchmark NZX-50 was up 8 points, or 0.2 per cent, at 4,055.47, for a third straight closing high.
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