Thursday: 19th January 2017
Each Market In Focus
- At 8.00 a.m. AEDT on Thursday, the local SPI 200 futures contract was up 8 points at 5,637 points.
A further drop in financial stocks Wednesday weighed on Australia’s equity market, which finished down as uncertainty grew over the possible impact from coming U.S.policies in the run-up to President-elect Donald Trump’s inauguration.
The weakness locally tracked the reversal of postelection trades on Wall Street overnight, with U.S. bank stocks retreating and the dollar sliding to a one-month low.
After the November election, investors bet Mr. Trump’s administration would usher in a surge in investment, higher growth and inflation. Australian banks rose along with that optimism, surging about 20% before stumbling in recent sessions as analysts questioned valuations given a backdrop of expected sluggish revenue growth at home.
Falling for a second straight day, the S&P/ASX 200 ended down 20.6 points, or 0.4%, to 5678.8.
The index had fallen as much as 0.7% in the initial minutes of trade.
AUS St Barbara Limited (SBM.AU) December Quarterly Report conference call / Webcast
AUS South32 Ltd (S32.AU) December Quarterly Report
NZ Dec BNZ – BusinessNZ Performance of Manufacturing Index (PMI)
NZ Nov Building Consents Issued
AUS Jan Consumer Inflationary Expectations Survey
AUS Dec Foreign Exchange Transactions and Holdings of Official Reserve Assets
AUS Dec 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)
- The S&P 500 and the Nasdaq were little changed in choppy trading on Wednesday as gains in tech stocks offset a weakness in retail sector, while the Dow was pulled lower by healthcare shares.
- The S&P 500 consumer discretionary sector was the biggest drag on the broader index, falling 0.4 per cent as Target weighed.
- The big-box retailer’s shares fell 5.5 per cent – their biggest single-day drop since August – after the brick-and-mortar chain reported dismal results for the holiday season and cut its quarterly earnings forecast.
- Bigger rival and Dow component Wal-Mart was off 0.8 per cent.
- Investors will parse her comments to see if she joins other policymakers in suggesting more aggressive interest rate hikes to ward off potential inflationary pressure from Donald Trump’s proposed policies.
- A frenetic post-election rally in US equities has hit a speed bump in recent weeks as investors wait for Trump to work on his campaign promises.
- The markets, which have received little detail on his policy plans, expect to get more insight during his inaugural speech on Friday.
- At The Dow Jones Industrial Average was down 54.72 points, or 0.28 per cent, at 19,772.05.
- The S&P 500 was down 0.43 points, or 0.02 per cent, at 2,267.46.
- The Nasdaq Composite was up 3.67 points, or 0.07 per cent, at 5,542.40.
- Six of the 11 major S&P 500 sector indexes were higher, with technology and industrials giving the broader index its biggest boost.
- 3M was the top stock among industrials, rising about 1 percent on a price target raise from Jefferies.
- Bank of America gave the biggest boost to the S&P 500. Goldman Sachs lost 1.7 per cent and Citigroup two per cent despite reporting strong quarterly profits.
- Copper prices continued to slide Wednesday after data showed Chinese house-price inflation slowed last month.
- Copper for March delivery closed down 0.3% at $2.6165 a pound on the Comex division of the New York Mercantile Exchange.
- Gold prices extended Wednesday’s losses in electronic trading, after Federal Reserve Chairwoman Janet Yellen reaffirmed the central bank would raise rates at a steady pace over the next few years.
- Gold for February delivery was recently down 0.6% at $1,206 a troy ounce in aftermarket trading.
- IRON ORE: $79.66 – 0.17 ( January contract )
Oil futures fell by nearly 3% as concerns over climbing U.S. shale output pushed prices to their lowest in about a week.
Those concerns outweighed some earlier support from growing signs that major crude producers have kept output in check as promised.
February West Texas Intermediate crude fell $1.40, or 2.7%, to settle at $51.08 a barrel–the lowest finish since Jan. 10.
Brent crude for March delivery lost $1.55, or 2.79%, to $53.92 per barrel.
- The U.S. dollar rebounded Wednesday, as upbeat U.S. data and commentary from Federal Reserve officials helped offset recent concern about Donald Trump’s policies.
- The U.S. dollar had fallen more than 1% on Tuesday after Mr. Trump suggested in an interview with The Wall Street Journal that he would prefer a weaker dollar. He also criticized a key tax-reform proposal that was expected to be a boon for the dollar.
- The Australian dollar is lower as pressure on the US dollar eased ahead of US Federal Reserve chair Janet Yellen’s speech.
- The local currency was trading at 75.36 US cents at 7.00 AEDT on Thursday, up from 75.44 on Wednesday
- European shares ended little changed on Wednesday with investors looking at corporate earnings for market direction as more doubts emerged that a rally triggered by
Donald Trump’s U.S. presidential election win would continue.
- The STOXX 600 edged 0.2 per cent higher after a choppy session
- UK’s FTSE added 0.4 percent, bouncing after posting its biggest one-day drop since June 2016 in the previous session on Brexit jitters.
- France’s CAC and Madrid’s IBEX both ended down slightly.
- The pan-European index has gained nearly 10 per cent over the last two months but has come off from its early January peak on concerns Trump may not fully deliver on his stimulus promises.
- It said, however, that it was overweight on equities ahead of a reporting season in Europe expected to reach double-digit earnings growth, driven by a rise in sales and margins.
- But there were negative corporate surprises on Wednesday, with a profit warning at Pearson causing a loss of nearly one-third in the market value of the British educational group.
- The world’s biggest education company cut its profit outlook for the next two years and said it would have to reset its 2017 dividend and sell assets to raise cash for investments in new technologies.
- Pearson’s 29.1 per cent share price drop – its biggest ever – caused the STOXX 600 media index to fall 1.8 per cent, making it the worst sectoral performer on the day.
- Elsewhere, earnings showed a better picture. ASML rose 6.7 percent to a record high after Europe’s largest supplier to semiconductor manufacturers beat net income forecasts and said it had almost sold out of its newest, most expensive machines for 2017 and early 2018.
- Fish farmer Marine Harvest rose 3.9 percent after its fourth quarter earnings beatforecasts.
- After initially jumping on a good earnings update, Novozymes tuned lower to fall 4.7 percent after the Danish biotech company’s management told a conference call that it 2017 guidance was “back-end loaded”.
- Satellite telecoms company Inmarsat was also under pressure, down 5.9 per cent, after JPMorgan cut its rating on the stock to “neutral” from “overweight”.
- Germany’s Gerresheimer rose 6.6 per cent after Deutsche Bank upgraded the drugs packaging firm to “buy”.
- Miners were the biggest sectoral gainers, up 1.4 per cent, as copper prices steadiedafter their biggest one-month drop in the previous session when Trump rattled investors by saying the dollar was too strong.
- Shares in London-listed sector heavyweights Rio Tinto and BHP rose 2.6 and 1.4 per cent respectively.
- Asian stock markets stabilised near three-month highs on Wednesday, helped by Hong Kong and Chinese shares, as investors judged U.S. President-elect Donald Trump’s concerns over a stronger dollar to be beneficial to some of the regional bourses.
- Short-covering also helped, especially in China, which tumbled more than four per cent last week, as traders took some money off the table before Trump’s inauguration on Friday.
- In Asia, MSCI’s ex-Japan Asia-Pacific shares index rose 0.4 per cent, just shy of a three-month high hit last Thursday. Energy and cyclicals were the chief gainers.
- Moreover, capital flows via the Shanghai and the Shenzhen connect programs have flipped decisively in favour of Hong Kong stocks in recent days, indicating mainland investors are gradually turning bullish over the broader market outlook.
- While investors have become somewhat optimistic on the outlook for Asian equities in the past two weeks – prompting regional markets to outperform developed market peers, underlying caution remains due to China concerns.
- Hong Kong stocks closed at 2-1/2 month highs and rose above the psychologically key 23,000 level unseen in six weeks.
- The Hang Seng index added 1.1 per cent, to 23,098.26 points, while the Hong Kong China Enterprises Index gained 1.0 per cent, to 9,802.86 points.
- New Zealand shares fell on Wednesday, with volumes still low. The S&P/NZX 50 Index dipped 3.7 points, or 0.1 per cent, to 7,059.28. Within the index, 26 stocks fell, 17 rose and seven were unchanged.
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