Friday: 13th April 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 18 points.

The Australian share market is expected to open higher after US stocks climbed amid anticipation for a strong earnings season, and as US President Donald Trump’s suggestion that a military strike on Syria may not be imminent eased geopolitical worries.

US stocks have climbed as investors anticipated a strong earnings season and as US President Donald Trump’s suggestion that a military strike on Syria may not be imminent ratcheted down geopolitical worries.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open higher after US stocks climbed amid anticipation for a strong earnings season, and as US President Donald Trump’s suggestion that a military strike on Syria may not be imminent eased geopolitical worries.
At 0700 AEST on Friday, the Australian share price futures index was up 18 points, or 0.3 per cent, at 5,815 points.
Investors may have also been pleased to hear that, according to a group of legislators, President Trump asked members of his administration to explore the possibility of rejoining the Trans-Pacific Partnership (TPP).
Strong quarterly results from BlackRock Inc and Delta Air Lines Inc added to the sanguine mood, with analysts tipping quarterly profit for S&P 500 companies to rise 18.4 per cent from a year ago.
The Australian market on Thursday closed lower as increasing tensions between the US and Russia over Syria unnerved investors.
In economics news on Thursday, the Reserve Bank of Australia will release the Financial Stability Review which will provide a half-yearly assessment on the current condition of the financial system and potential risks to financial stability.
The RBA is expected to touch on key themes including recent increases in funding costs, assessments of lending standards, changes in household leverage and the slippage in house prices.
In equities, construction and contract mining giant CIMIC Group is due to hold its annual general meeting in Sydney.

US Markets

US stocks have climbed as investors anticipated a strong earnings season and as US President Donald Trump’s suggestion that a military strike on Syria may not be imminent ratcheted down geopolitical worries.
The Dow Jones Industrial Average rose 1.21 per cent to 24,483.05, the S&P 500 gained 0.83 per cent to 2,663.99, and the Nasdaq Composite added 1.01 per cent to 7,140.25
Trump said in a tweet on Thursday that a possible attack on Syria could occur “very soon or not so soon at all,” easing fears of confrontation with Russia.
That lifted US Treasury yields, leading to a 1.8 per cent increase in financial stocks, which had the biggest percentage advance among the S&P’s 11 major sectors.
The technology sector rose 1.3 per cent, adding the most gains to the S&P.
Strong quarterly results from BlackRock Inc and Delta Air Lines Inc added to the sanguine mood. Delta topped profit estimates, sending its shares 2.9 per cent higher and boosting other airline stocks.
Analysts expect quarterly profit for S&P 500 companies to rise 18.4 per cent from a year ago, in what would be the biggest gain in seven years, according to Thomson Reuters I/B/E/S.

Commodities

The spot price of gold in Sydney at 0700 AEST was $US1,334.45 per fine ounce, from $US1,350.249 per fine ounce on Thursday.
Gold prices suffered their first loss in five sessions, pulling back after climbing to a roughly 2 1/2-month high a day earlier as the metal’s haven status lost its appeal.
IRON ORE: $64.01 -0.12(May contract)

Oil Futures

Prices for the U.S. oil futures benchmark notched a turn higher late in the trading session to post a modest gain and hold ground at their highest since early 2014.
Oil found support from news reports that said Saudi Arabia’s air defense system shot down a Houthi missile over Jazan. That followed reports Wednesday that the Saudis intercepted a missile over Riyadh. Tensions in the Middle East, including a potential military response from the U.S. in the wake of a suspected chemical-weapons attack in Syria, have raised the potential for supply disruptions in the region.

Forex

The dollar advanced in New York, posting its first gain in five sessions as traders parsed the risk of a military attack in Syria against recent minutes that underscored the Federal Reserve’s intention to slow too-hot economic growth.
At least part of the advance for the U.S. currency was driven by a decline in the euro, which weakened against its rival following disappointing industrial production data for the eurozone.
The ICE U.S. dollar index, which measures the buck against six rivals, was up 0.3% to 89.76, breaking a four-session skid. The broader WSJ U.S. Dollar Index was up 0.2% at 83.81.

Australian Dollar:
The Australian dollar is slightly higher against a stronger US dollar which was buoyed by US President Donald Trump’s more conciliatory trade comments, including the possibility of rejoining the Trans-Pacific Partnership.
At 0630 AEST on Friday, the local currency was worth 77.56 US cents, up from 77.48 US cents on Thursday.

European Markets

A spate of deal-making and strong financial stocks were outweighed by anxiety over the Syrian conflict and a rising pound, keeping Britain’s FTSE 100 flat.
Britain’s leading stock index closed up 0.02 per cent at 7,258.34 points on Thursday, lagging European indices which gained in a recovery rally as some saw an easing of tensions over possible US military action in Syria.
Dealmaking drove big moves on the FTSE which was likely left out of Europe’s relief rally due to the strength of sterling, which soared to a nine-month high against the euro.
Micro Focus jumped 7.6 per cent to the top of the index after a Bloomberg report that Elliott Management had taken a stake in the software firm. Neither company commented on the report.
Among mid-caps, shares in British bus and rail operator FirstGroup rose 8.2 per cent after a takeover offer from US private equity firm Apollo Global Management.

Asian Markets

Hong Kong stocks shed early gains to end lower, as caution prevailed amid rising tensions in the Middle East following the threat of imminent US military action in Syria.
The Hang Seng index closed down 0.2 per cent at 30,831.28 points on Thursday, while the China Enterprises Index ended 0.3 per cent lower at 12,288.86.
US president Donald Trump declared that missiles “will be coming” in Syria, taunting Russia for supporting Syrian President Bashar al-Assad after a suspected chemical attack on rebels.
His comments raised the prospect of direct conflict over Syria for the first time between the two world powers backing opposing sides in the seven-year-old civil war, which has also escalated a rivalry between Saudi Arabia and Iran.
Adding to the pressure was the lingering concern over the trade spat between China and the United States.
China’s commerce ministry said on Thursday trade negotiations with the United States would be impossible as Washington’s attempts at dialogue were not sincere, and vowed to retaliate should US President Donald Trump escalate current tensions.
Around the region, MSCI’s Asia ex-Japan stock index slipped 0.32 per cent, while Japan’s Nikkei index closed down 0.12 per cent.
New Zealand shares fell, pushing the benchmark index to a week-low, as
geopolitical tensions weighed on equities.
The S/NZX 50 Index fell 49.50 points, or 0.6 per cent, to 8,404.22. Within the index, 28 stocks fell, 16 gained, and six were unchanged. Turnover was $125 million.

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