Monday: 16th July 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 7 points.

Australian stocks finished a muted week with a whimper, under performing in Asia-Pacific again while the S&P/ASX 200 edged into positive territory
U.S. stocks climbed higher on Friday and posted weekly gains, as a solid start to the corporate earnings season helped investors brush aside fears about a global trade rift.

Overnight Summary

Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian stocks finished a muted week with a whimper, underperforming in Asia-Pacific again while the S&P/ASX 200 edged into positive territory this afternoon. But a late drop left it with a 0.1-point gain to 6268.4, falling 3.9 points for the week after hitting a fresh 10 1/2-year closing high on Monday. A 2% jump in CSL and 3.2% rally by Cochlear helped health care rise 1.45% today, but that was countered by broad weakness among the banks and a third-straight decline for BHP Billiton. Financials fell 0.3% for the week as the major banks surrendered some of their recent

US Markets

U.S. stocks climbed higher on Friday and posted weekly gains, as a solid start to the corporate earnings season helped investors brush aside fears about a global trade rift. Stocks have shown resilience in recent weeks, even as the U.S. and China have ramped up punitive trade measures on each other that some analysts fear could hurt global growth. The S&P 500 dipped midweek after the White House said it would assess 10% tariffs on an additional $200 billion of Chinese goods although it then rebounded Thursday as technology shares rallied. Investors say signs of strength in the U.S. economy are helping them remain cautiously optimistic about the nine-year stock rally. Corporate earnings results have continued to impress, with PepsiCo shares soaring Tuesday after the firm posted a slight gain in quarterly revenue and JPMorgan Chase and Citigroup posting double-digit profit increases for the latest quarter Friday. The Dow Jones Industrial Average rose 93 points, or 0.4%, to 25018 on Friday. The S&P 500 added 0.1%, and the Nasdaq Composite advanced less than 0.1%, notching a fresh closing high. For the week, the Dow industrials were up 2.3%, while the S&P 500 was up 1.5% and the Nasdaq was up 1.8%. Corporate news drove swings in individual stocks throughout the week, propelling shares of industrial, technology and consumer discretionary firms up more than 2% apiece in the S&P 500. Defense contractors rallied after President Donald Trump pressed allies at a North Atlantic Treaty Organization meeting to double their military spending targets. Lockheed Martin was up 6.4% for the week, while Northrop Grumman was up 4.7%. Meanwhile, technology stocks continued to add to their gains for the year, with Microsoft’s market capitalization rising above $800 billion for the first time Thursday and software firm CA Technologies jumping after Broadcom agreed to buy it for $18.9 billion. CA was recently up 20% for the week, posting its biggest one-week percentage gain since 2008.


Gold prices fell, pushed down by expectations that the dollar’s rally will continue weighing on commodities. Gold for August delivery was recently down 0.4% at $1,239.60 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices fell as low as $1,236.20 a troy ounce earlier in the session.

IRON ORE: $63.42s -0.24 (August contract)

Oil Futures

Oil prices ticked higher, as traders weighed a slew of mixed supply signals from the week and awaited further figures that could shift projections for a market deficit. Light, sweet crude for August delivery closed up 68 cents, or 1%, to $71.01 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, added 88 cents, or 1.2%, to $75.33. Prices have stabilized since tumbling on Wednesday after Libya indicated it would resume export activities at its eastern ports, potentially easing fears of a supply shortage. Supply disruptions in Libya and other countries and U.S. sanctions against Iran pushed oil prices near their highest level since 2014 early in the week, and analysts say there’s still continued uncertainty about how much oil will quickly return to the market.

Adding to the mixed signals: data on Wednesday showed U.S. inventories dropped much more than analysts expected during the week ended July 6. And Saudi Arabia, under pressure from the U.S. to ramp up production to keep a lid on prices, told the Organization of the Petroleum Exporting Countries that its oil output rose last month, nearing levels not seen since the country embarked on production cuts in 2016. Now, with the prospect that trade threats could slow the global economy and lower commodity consumption also affecting sentiment, analysts are waiting to see what the next supply signal will be.


The U.S. dollar was little changed as investors reassessed their expectations about how trade concerns could affect global growth.The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, rose 0.03% to 88.46. The dollar had strengthened earlier in the week, boosted by economic data showing the pace of inflation rising. Other factors lifting the dollar included rising trade tensions, President Donald Trump’s contentious North Atlantic Treaty Organization summit in Brussels and his visit to the U.K. for meetings with Prime Minister Theresa May.The Trump administration this week said it plans to impose 10% tariffs on an additional $200 billion in Chinese goods-from tech gear like routers to furniture and handbags. Investors have tended to buy the U.S. currency as tensions have increased between the country and its major trading partners, betting that it will be less hurt by any potential slowdown in global growth caused by a breakdown in the cross-border flow of goods and services.

European Markets

European stocks ended slightly higher, extending their weekly gains as concerns over a potential global trade war remained on the back burner and investors instead focused on a raft of prominent bank earnings out of the U.S. The Stoxx Europe 600 index ended 0.2% higher at 385.03, pushing the benchmark 0.7% higher for the week. The U.K.’s FTSE 100 index rose 0.1% to 7,661.87. France’s CAC 40 index rose 0.4% to 5,429.20, and Germany’s DAX 30 index tacked on 0.4% to close at 12,540.73.

Asian Markets

In Asia, Hong Kong’s Hang Seng was up 0.2% and Japan’s Nikkei Stock Average rose 1.9%. The yen has fallen to its lowest point in dollar terms since January, which tends to boost Japanese exporters. In China, the Shanghai Composite Index fell 0.2%

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