Wednesday 17th April 2019

OPENING CALL: The Australian market looks to open lower with SPI Futures down 17 points.

U.S. stocks were slightly higher. U.S. government bonds finished lower as investors viewed the Fed as being accepting of above-target inflation. The dollar was slightly higher. Crude oil was higher on optimism for economic growth. And gold futures fell in favor of riskier assets.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market
US Markets

U.S. stocks gave back earlier gains to finish slightly higher, as health-care shares faced renewed concerns about tighter health-care regulation. The Dow Jones Industrial Average rose 0.3%. The S&P 500 ended nearly unchanged and the tech-heavy Nasdaq Composite added 0.3%. Trading has been thin this week as U.S. major indexes near records, with the Nasdaq Composite logging the lowest volumes since Christmas on Monday. The S&P 500 is within 0.8% of its September high, while the Dow industrials are off 1.5% of their October record. Health-care stocks in the S&P 500 fell after shares of United Health Group dropped 3.9%. The parent of the nation’s biggest health insurer raised its profit guidance for the year on revenue growth across all its businesses, but shares fell after Chief Executive David Wichmann warned investors that the so-called Medicare for All bill proposed by House Democrats threatens to “destabilize the nation’s health system.”

Matières premières

Gold futures declined, with the precious metal suffering its lowest finish year to date, as equity benchmarks in the U.S. flirted with records and government bond yields advanced, reflecting growing appetite for assets perceived as risky over so-called havens. The yellow metal may have also suffered from additional pressure as Bloomberg reported that Venezuela recently sold $400 million in gold, in a potential move to offset U.S. sanctions on the country. Gold for June delivery on Comex fell $14.10, or 1.1%, to settle at $1,277.20 an ounce. That was the lowest finish for a most-active contract since Dec. 26, according to FactSet data.

Iron Ore: 91.90s – 1.85 (May Contract)

Oil Futures

Oil prices rose, climbing alongside stocks and other risk assets on optimism about improving economic growth and commodities demand. West Texas Intermediate futures, the U.S. oil benchmark, added 1% to $64.05 a barrel on the New York Mercantile Exchange. Prices have fallen slightly below last week’s five-month highs but are still up 41% for the year and 16% below their multiyear highs from early October. Brent crude, the global price gauge, climbed 0.8% to $71.72 a barrel on London’s Intercontinental Exchange. Oil has moved in tandem with stocks and other risky investments to start the year, surging as investors anticipate that a U.S.-China trade deal and stimulus efforts by global central banks will spur economic activity and lift commodity demand.

Forex

The dollar edged higher as investors awaited the release of an array of Chinese economic data. The WSJ dollar Index, which measures the U.S. currency against a basket of 16 others, rose less than 0.1% to 90.15. In quiet trading, the euro fell 0.2% against the dollar to $1.1283, while the dollar fell less than 0.1% against the Japanese yen to Y112.015 per dollar. The U.S. currency registered little reaction after new data showed that U.S. industrial output fell 0.1% in March from the previous month, missing economists’ expectations for a 0.2% gain. That shifted attention to China, where new data will be released overnight on industrial production, investment in fixed assets and gross domestic product, giving investors their latest chance to assess the health of the world’s second largest economy. Strong Chinese data could provide a lift to the currencies of developing countries that depend on Chinese demand for their exports of commodities and other goods. Last year, the Chinese economy grew at its slowest rate in nearly three decades. But there have been signs recently that China’s efforts to stimulate its economy may be working, helping ease concerns about the global growth outlook.

European Markets
Asian Markets

Earlier in the day, the Shanghai Stock Exchange was up 2.4%, Hong Kong’s Hang Seng Index rallied 1.1% and Japan’s Nikkei gained 0.2% on hopes for a resurgence in Chinese growth. The loser from Monday, Chinese stocks were the winner as mainland equities quickly rebounded from early declines of more than 1% in some areas to post gains of more than 2% after more than a week of profit-taking. Asian equities were higher ahead of China’s reversal and remained that way, with benchmarks in Taiwan and Korea again notching six-month highs. The Kopsi logged a record-tying 13th straight gain and advances of nearly were seen in Hong Kong and India. Malaysia’s benchmark was the only one down for the day. Some analysts said the buoyancy in Asia was a reaction to expectations for a pickup in the Chinese economy on the back of fiscal stimulus and easing monetary policy, which has boosted credit in the first quarter of 2019. The country’s latest growth estimates will be published Wednesday. ING analysts forecast growth in China at 6.2% year-over-year for the first quarter of 2019, above the 6% rate that marks the lower bound of Beijing’s target. Indonesian shares extended their rally, outpacing most regional peers, as local investors expect Wednesday’s elections to be peaceful. The JSX index rose 0.7% at 6481.542 with 235 gainers and 162 decliners.

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