Friday: 10th August 2018

OPENING CALL: The Australian market looks to open higher with SPI futures up 10 points.

As earnings season again dominated Australian stock action, good news helped push the country’s benchmark to a fresh 10 1/2-year intraday high.
The S&P 500 drifted between small gains and losses intraday, as the latest round of corporate earnings reports offered some support to a stock market reckoning with yet another trade volley.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

As earnings season again dominated Australian stock action, good news helped push the country’s benchmark to a fresh 10 1/2-year intraday high. Easing a bit into the close, the S&P/ASX 200 finished up 0.5% at 6297.7. Earnings-driven rallies from Suncorp, Magellan Financial and Crown Resorts helped the financial and consumer-discretionary sectors dominate. But AGL fell 4.1% as new-year earnings guidance fell short of expectations and energy stocks fell — as elsewhere in the region — following oil’s Wednesday slump.

US Markets

The S&P 500 drifted between small gains and losses intraday, as the latest round of corporate earnings reports offered some support to a stock market reckoning with yet another trade volley. The broad index struggled to move higher most of the morning, even after shares of several companies, including telecommunications firm CenturyLink and energy drink maker Monster Beverage, gained following upbeat earnings results. Investors said renewed trade tensions sapped some of the market’s enthusiasm after China threatened Wednesday to slap new tariffs various chemicals and medical equipment, among other goods. Beijing released the list of items as part of its promise to keep pace with the U.S.’s trade threats, which caused stocks to sputter Wednesday, snapping a four-session streak of gains for the S&P 500 and Dow industrials.

Commodities

Gold futures failed an attempt at a third straight gain, as the latest round of economic data on jobs and inflation offered little to dissuade investors from buying assets perceived as risky over haven gold.

IRON ORE: 69.73 + 0.25 (September contract)

Oil Futures

Crude-oil prices edged lower, settling in negative territory for a second straight session. West Texas Intermediate crude oil for September delivery closed off 13 cents, or about 0.2%, at $66.81 a barrel. Worries that demand has been weakening is a key theme that has recently weighed on crude prices. U.S. oil prices registered their steepest one-day drop in more than three weeks on Wednesday as the bullish narrative that had buoyed crude futures for the past two sessions – supply disruptions and strong demand – fizzled out. Investors are now fretting that demand from the second-largest economy and biggest oil importer, China, may be hurt as the country faces economic slowdown and as trade clashes between President Donald Trump and Beijing show apparent signs of intensifying.

Forex

The dollar rose intraday as geopolitical tensions in the U.K., Turkey and Russia pushed investors to the relative safety of the U.S. currency. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.3% at 89.03. The Russian ruble fell to a two-year low against the dollar after the U.S. unveiled a new series of sanctions on Moscow over a nerve-agent attack on a former Russian spy and his daughter in the U.K. The Russian currency was recently down 1%, after dropping nearly 5% at one point. The Turkish lira fell after further talks Wednesday failed to guarantee the release of a U.S. pastor accused by Turkey of aiding the failed coup against President Recep Tayyip Erdogan. The Turkish currency was recently down 3.1% at 5.497 lira per U.S. dollar. The lira has fallen steadily against the dollar this month as the country’s central bank struggles to implement effective monetary policy, and as diplomatic relations with the U.S. deteriorate. The U.S. currency also rose against developed-market currencies, hitting its highest level against the British pound in almost a year as Brexit tensions continue to shake investors.

European Markets

European stock mostly struggled, as investors attempted to dispel trade-war angst between the U.S. and China and as shares of financials and the pharmaceutical companies weighed on the broader market. The Stoxx Europe 600 erased losses and moved to unchanged at 390.05, after finishing 0.2% lower on Wednesday at 389.69. The day’s moves come after Tuesday marked the index’s best close since late July. The pan-European gauge is on pace for a rise of about 0.1% so far this week, having pushed into positive territory for the year this week. Germany’s DAX 30 rose 0.3% to 12,671.09, while France’s CAC 40 was flat at 5,500.63. The U.K.’s FTSE 100 slid 0.4% to 7,743.57, as the British pound was flat at $1.2880. Meanwhile, the FTSE MIB Italy index declined by 0.6% to 21,634.13, while Spain’s IBEX 35 was little changed at 9,738.90.

Asian Markets

In Asia, stock markets were all over the map, with local factors dominating amid a lack of overseas trading cues. Potential government interventions in tech sent the sector higher in China, fueling gains of more than 2% for major indexes. That also helped Hong Kong. A stronger currency capped Japan’s stocks. Japan’s Nikkei edged lower 0.2% and Hong Kong’s Hang Sang rose 0.9%. The Philippines fell 0.4%, well off session lows, after a weak gross domestic product report and ahead of the imminent central-bank policy statement. The moves came as India’s Sensex continued to hit more record highs. Indian shares were led by bank stocks. The S&P BSE Sensex closed at a fresh high of 38,024.37, up 0.4%, taking this year’s gain to nearly 12%. Investors remain upbeat on bank stocks on hopes of lower bad loan provisions.

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