Tuesday: 11th September 2018

OPENING CALL: The Australian market looks to open unchanged.

U.S. stocks were mixed, with the S&P 500 higher and the Dow industrials lower. U.S. government bonds were higher. The dollar declined against the euro and the British pound. Crude oil prices saw their fourth-straight session of declines. And gold settled modestly lower.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market
US Markets

The S&P 500 rose, buoyed by gains among industrial and technology firms, as investors looked ahead at a busy week for economic data. Stocks opened the trading day at their highs and gave up ground shortly after, although the S&P 500 and Nasdaq Composite managed to hold onto their gains for the day. With the second-quarter earnings season largely over, analysts said investor attention would likely turn to economic data, with reports on producer prices, consumer prices and retail sales scheduled for release in the coming days. Economic data have largely been upbeat this year, driving the U.S. dollar higher and helping offset investor worries that tense trade negotiations could trigger a wave of protectionism across the globe. Many investors are looking at the U.S. midterm elections in November as a key date by which the magnitude of the trade dispute should be clearer. The Dow Jones Industrial Average fell 58 points, or 0.2%, to 25857 after notching its biggest one-week decline since mid-August. The S&P 500 climbed 0.2%, and the Nasdaq Composite advanced 0.3%.

Commodities

Meanwhile, gold futures saw a modest loss, bucking earlier support from weakness in the dollar to finish below $1,200 an ounce for the second time in a week. Prices for the yellow metal had found earlier support as the dollar weakened on the heels of a rally in the British pound, which offered a reason for the dollar-denominated precious metal to move up after posting a third-consecutive weekly loss. December gold, however, settled a bit lower, down 60 cents, or 0.05%, at $1,199.80 an ounce. That marked a second finish below $1,200 so far this month. The precious metal had logged a weekly decline of about 0.5% last week, enough to bump the string of weekly losses to eight in the past nine.

IRON ORE: 67.67s – 0.25 (October contract)

Oil Futures

U.S. oil prices erased early gains and posted a fourth straight session of declines, with investors continuing to weigh a wave of supply signals. Light, sweet crude for October delivery closed down 21 cents, or 0.3%, at $67.54 a barrel on the New York Mercantile Exchange, coming off its worst week in nearly two months. Brent crude, the global benchmark, rose 54 cents, or 0.7%, to $77.37 a barrel. Prices have been stuck in a range for weeks well below multiyear highs hit earlier in the year, moving based on weekly U.S. supply figures, data from large producers like Saudi Arabia, and news about sanctions against Iran. U.S. sanctions targeting Iran’s oil industry are set to take effect in November, but the country has already registered a decline in exports that has tightened the oil market. Officials at the state-run National Iranian Oil provisionally expect crude shipments to drop to around 1.5 million barrels a day this month, down from around 2.3 million barrels a day in June, according to people familiar with the matter.

Forex

The dollar fell against the euro and the British pound as reports suggested both sides are making progress in talks to work out the departure of U.K. from the European Union. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, fell for the third time in four trading sessions, declining 0.1% to 89.86. The dollar had declined 0.9% against the pound to $1.3015 and 0.3% versus the euro to $1.1594. The EU’s top Brexit negotiator said it was possible the two parties “can expect to reach the Brexit agreement in the next six to eight weeks,” according to a statement from the British embassy in Slovenia posted on Twitter.

European Markets

The dollar’s declines were modest as a range of other issues remain unsettled, from the turmoil in emerging market governments such as Turkey and Argentina to tariff disputes between the U.S. and its major trading partners. “We seem to be in a holding pattern,” Mr. Nelson said. “There’s a lot of underlying problems that have yet to be resolved.”

Asian Markets

Elsewhere, a new week didn’t start a new trend for Asian stocks. The selling carried over, with declines of at least 1% seen in Hong Kong, China, India and Taiwan. Hong Kong’s Hang Seng, the Shanghai Composite and Taiwan’s Taiex fell 1.3%, 1.2% and 1.1%, respectively. Japan’s Nikkei Stock Average up 0.3%. Shares of firms that supply parts and assemble products for Apple were among the day’s biggest fallers, after U.S. President Trump put pressure on the technology giant to shift production to the U.S. iPhone assembler Hon Hai Precision Industry, known as Foxconn, fell 3.4% to a fresh two-year low. Over the past few months, investors have been piling into the relative safety of U.S. assets to safeguard against the possibility that U.S. trade policies trigger a wave of protectionism across the globe. President Trump said Friday that tariffs on another $267 billion in Chinese goods could be rolled out in short notice, in addition to the already announced levies on $200 billion of goods that, he added, will be deployed “very soon.” Shenzhen indexes set fresh multiyear closing lows and Hong Kong’s Hang Seng Index is in danger of finishing in bear-market territory. But it wasn’t all ugly. Japan, South Korea and Vietnam logged modest gains while the Philippines reversed an early 1% drop and nearly finished higher.

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