Friday: 28th September 2018

OPENING CALL: The Australian market looks to open higher with SPI futures up 28 points.

U.S. stocks were higher post-Fed rate hike as markets await third-quarter earnings. Wednesday’s rally in U.S. government bonds faded, with yields remaining at multiyear highs. The dollar was stronger. Crude oil finished higher on concerns about Iran oil exports. And gold was lower on strong second-quarter GDP data.

 

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market
US Markets

U.S. stocks rose broadly as investors digested the Federal Reserve’s decision to raise interest rates and looked ahead to third-quarter earnings season next month. Eight of 11 sectors in the S&P 500 climbed as stocks bounced back after turning lower in the final hour of Wednesday’s session. Some on Wall Street said the market was shaking off what they thought was a knee-jerk reaction following the Fed meeting. The S&P 500 rose 8.03 points, or 0.28%, snapping a four session losing streak, led by the utilities and communications sectors. The Dow Jones Industrial Average added 54.65 points, or 0.21%, to 26439.93, while the technology-heavy Nasdaq Composite closed up 51.60 points, or 0.65%, to 8041.97. The S&P 500’s new communications sector, which houses Google parent Alphabet, Facebook and Netflix, among other stocks, rose 0.8%, while the technology sector added 0.5%.

Commodities

December gold fell $11.70, or 1%, to settle at $1,187.40 an ounce. Based on the most-active contract, the metal saw its lowest settlement since Aug. 17, FactSet data show. The contract closed at its lowest in three weeks Wednesday. In electronic trading shortly after the Fed announcement Wednesday, the contract had moved higher and brushed against $1,202.

IRON ORE: 67.93s – 0.50 (October contract)

Oil Futures

Oil prices rose on renewed concerns that Iran oil exports will fall sharply due to U.S. sanctions, creating a hole in global supplies that won’t be filled by other major oil-producing nations. Light, sweet crude for November delivery ended 0.8% higher at $72.12 a barrel on the New York Mercantile Exchange. That’s just shy of an 11-week closing high of $72.28 a barrel reached Tuesday. Brent crude, the global benchmark, rose 0.5% to $81.72 a barrel. Oil prices have closed higher four of the past five sessions, with their only decline coming on Wednesday when weekly data showed an unexpected increase in U.S. crude inventories. But analysts said markets have looked past that data to focus on the implications of shrinking exports of Iranian oil. Meanwhile, gold futures suffered the lowest finish in almost six weeks, with a leading dollar index moving higher after the Federal Reserve’s widely expected decision to raise a key interest rate. The Fed on Wednesday lifted federal-funds rates for the third time this year, to a range between 2% and 2.25%, and signaled it was prepared to increase again in December.

Forex

The U.S. dollar climbed, while euro traders fretted about renewed woes surrounding Italy’s budget proposal. The greenback’s fresh bout of strength came a day after the Federal Reserve raised interest rates by 25 basis points in its third hike of the year. While the buck was more muted during the session of the rate increase, it climbed higher the day after with the ICE U.S. Dollar Index up 0.7% at 94.876, marking its strongest daily gain since early August, according to FactSet. Economic data including slightly lower-than-expected jobless claims in the week ended Sep. 22 and a jump in durable goods orders, helped the buck advance further. The trade deficit for August expanded to $75.8 billion, compared with $70.6 billion expected by economists polled by MarketWatch. Meanwhile, the euro was weaker, slipping to $1.1661 versus $1.1742 late Wednesday in New York.

European Markets
Asian Markets

Earlier in the day, though it was a generally down day for Asian stocks, the markets which logged gains were posting sizable ones. Benchmark indexes in South Korea and the Philippines each rose 0.7%, and Indonesia’s gain was in that same range. Taiwan’s Taiex rose 0.5%. That contrasts with 1%-plus drops in Tokyo and Shenzhen, and declines of at least 0.5% in India and Hong Kong. These followed the late-day selloff in the U.S. after the Fed raised rates and as oil climbed a further 1% in Asian trading. Japan’s Nikkei Stock Average fell 1% while Hong Kong’s Hang Seng was down 0.4%. The Nikkei fell to 23796.74, ending an eight-day winning streak.

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