Friday: 20th April 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 6 points.

The Australian share market is expected to open slightly lower, following falls in US stocks and base metals prices.

Cigarette giant Philip Morris International Inc was the second biggest weight on the S&P after weaker-than-expected results, also pulling down US tobacco company Altria.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market
The Australian share market is expected to open slightly lower, following falls in US stocks and base metals prices.
At 0700 AEST on Friday, the Australian share price futures index was down 10 points, or 0.17 per cent, at 5,844.
The Australian share market on Thursday closed higher for a fifth straight session, led by the mining and energy sectors.
The benchmark S&P/ASX200 was up 19.6 points, or 0.33 per cent, at 5,881 points, while the broader All Ordinaries index was up 20 points, or 0.34 per cent, at 5,976.3 points.
The Australian dollar on Friday morning is lower after the release of disappointing local jobs figures on Thursday, and after the falls on Wall Street.
US Markets
Wall Street’s three major indexes closed lower on Thursday, with tobacco stocks leading a tumble in consumer staples while concerns about smartphone demand hurt the technology sector.
Cigarette giant Philip Morris International Inc was the second biggest weight on the S&P after weaker-than-expected results, also pulling down US tobacco company Altria.
A warning from Taiwan Semiconductor (TSMC), the world’s largest contract chipmaker and an Apple Inc supplier, on soft demand for smartphones and on the industry’s growth this year sparked a tumble in chip stocks and made Apple the S&P’s second biggest weight.
Along with weak results from Philip Morris and Procter & Gamble Co, defensive sectors such as consumer staples were also hurt by a rise in US 10-year Treasury yields, which helped bank stocks.
“It’s pretty much dictated by the move in the bond market,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
Commodities
The spot price of gold in Sydney at 0700 AEST was $US1,345.40 per fine ounce, from $US1,353.40 per fine ounce on Thursday.
IRON ORE: $68.25 +0.69(May contract)
Oil Futures
Oil prices were mixed, with the U.S. benchmark retreating from a more-than-three-year high as investors took profits.
U.S. crude futures settled down 18 cents, or 0.26%, to $68.29 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 30 cents, or 0.41%, to $73.78 — its highest since Nov. 26, 2014.
Forex
The dollar rose, boosted by solid U.S. economic data.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.3% at 83.95.
The number of Americans claiming new unemployment benefits fell last week for the third time in four weeks, data from the Labor Department showed.
At the same time, the Conference Board Leading Economic Index, which measures U.S. business trends, rose 0.3% to 109 in March, following increases with the index in January and February.
Further gains may be hard to come by for the dollar, as many investors remain worried about U.S. trade policy, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, in a note to clients.
Australian Dollar:
The Australian dollar is lower after the release of disappointing local jobs figures on Thursday, and after Wall Street was dragged down by the tech stocks.
At 0635 AEST on Friday, the local currency was worth 77.31 US cents, down from 78.01 US cents on Thursday.
European Markets
The UK’s top share index rose on Thursday as surging crude oil prices boosted commodity stocks and Shire’s shares jumped as bid talk heated up.
The FTSE 100 ended the session 0.2 per cent higher at 7,328.92 points, its highest since early February. The mid-cap index also gained, up 0.7 per cent.
In other European markets, Germany was down 0.19 per cent, and France was up 0.21 per cent.
Shares in Shire soared nearly six per cent to the top of the index after Botox maker Allergan said that it was in the early stages of considering a possible offer for the British rare diseases specialist.
Shire also rejected a third takeover bid worth nearly $US63 billion ($A81.5 billion) from Japan’s Takeda Pharmaceutical.
More broadly, the energy sector contributed most to the FTSE’s gains with oil majors Royal Dutch Shell and BP both up around 1.5 per cent as oil prices hit their highest in over three years after a report that top exporter Saudi Arabia was pushing for higher prices.
Asian Markets
Resource stocks rallied in Asia on Thursday as oil prices hit heights not seen since late 2014 and ignited a rally across commodities, though the potential boost to inflation globally also put some pressure on fixed-income assets.
The surge came on a Reuters report that OPEC’s new price hawk Saudi Arabia would be happy for crude to rise to $US80 or even $US100, a sign Riyadh will seek no changes to a supply-cutting deal even though the agreement’s original target is within sight.
“The Saudis and their colleagues in OPEC need higher oil (prices) for their fiscal positions and the Kingdom is on a bold – and costly – reform program,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
Resource stocks were the big winners, driving Chinese blue chips up 1.1 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.9 per cent, with energy up over 2.6 per cent.
Japan’s Nikkei faded late in the day to end up 0.15 per cent, and Hong Kong’s Hang Seng index rose 1.4 per cent .
On Thursday, New Zealand’s S&P/NZX 50 index rose 0.04 per cent, to 8,373.03.

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