Tuesday: 20th March 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 33 points.

 The Australian share market is expected to open lower after US stocks suffered heavy falls during the offshore session, driven by losses in technology stocks.

US stocks dropped on Monday as a plunge in shares of Facebook led a sell-off in technology stocks on reports that the social media company’s user information was misused.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open lower after US stocks suffered heavy falls during the offshore session, driven by losses in technology stocks.
At 0700 AEDT on Tuesday, the Australian share price futures index was down 33 points, or 0.55 per cent, at 5,925.
The Australian share market on Monday closed slightly higher, helped by positive leads from other markets.
The benchmark S&P/ASX200 index was up 10 points, or 0.17 per cent, at 5,959.4 points, while the broader All Ordinaries index was up 9.8 points, or 0.16 per cent, at 6,064.7 points.
In economic news on Tuesday, the Reserve Bank releases the minutes of its March monetary policy meeting, where it kept the cash rate unchanged, the Australian Bureau of Statistics releases its home prices figures for the December quarter, and the ANZ-Roy Morgan Consumer Confidence weekly survey is due out.
In equities news, Kathmandu and TPG Telecom release their half year earnings, and Rio Tinto chief executive Jean-Sebastien Jacques delivers CEDA’s 2018 Copland Lecture.

US Markets

US stocks dropped on Monday as a plunge in shares of Facebook led a sell-off in technology stocks on reports that the social media company’s user information was misused.
Facebook shares tumbled 7.1 per cent as Chief Executive Mark Zuckerberg faced calls from both US and European lawmakers to explain how a consultancy that worked on President Donald Trump’s election campaign gained access to data on 50 million Facebook users.
The stock was set for its worst day since September 2012 and was down about 13 per cent from its record high hit on Feb. 1, to put the stock squarely in correction territory, a drop of 10 per cent from its high.
Other major companies with large tech businesses also dropped as recent concerns over regulation in the arena increased. Apple lost 2.24 per cent while Alphabet fell 3.8 per cent and Microsoft declined 2.5 per cent.
In the final hour of trade, the Dow Jones Industrial Average was down 345.63 points, or 1.39 per cent, to 24,600.88, the S&P 500 lost 36.52 points, or 1.33 per cent, to 2,715.49 and the Nasdaq Composite dropped 137.74 points, or 1.84 per cent, to 7,344.24.

Commodities

Copper prices fell for the third-straight session Monday as investors continued to weigh a possible economic slowdown amid trade tensions between some of the world’s biggest economies.
IRON ORE: $65.89 -2.08 (April contract)

Oil Futures

U.S. oil futures fell Monday, giving back nearly all of last week’s gain as prices tracked a drop in the stock market. Analysts said, however, that the potential for supply disruptions amid tensions between Saudi Arabia and Iran limited losses for oil, along with sliding crude production in Venezuela. April West Texas Intermediate crude fell 28 cents, or 0.5%, to settle at $62.06 a barrel on the New York Mercantile Exchange. It had gained 0.5%, or 30 cents, a barrel last week after posting a rise of 1.9% on Friday. Brent crude for May delivery lost 16 cents per barrel, or 0.24%, to $66.05.

Forex

The dollar fell Monday, as investors prepared for a Federal Reserve meeting later in the week.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.2% at 83.81.
Most investors expect the Fed to announce its first interest rate increase of 2018 at the conclusion of its meeting on Wednesday. At the same time, many will be looking for signals on whether officials may step up the pace of rate increases later in the year to keep the economy from overheating.
Signs that the central bank is leaning toward a more aggressive tightening path could boost the dollar, as higher rates make the currency more attractive to yield-seeking investors.

Australian Dollar:
The Australian dollar has bounced back from the three month low it hit on Monday, despit heavy falls on Wall Street, but following a bounce in gold
prices.
At 0635 AEDT on Tuesday, the local currency was worth 77.17 US cents, up from 76.92 US cents on Monday.

European Markets

The FTSE fell to a 15-month low on Monday after Britain and the European Union agreed on a post-Brexit transition which boosted the sterling but weighed on the internationally exposed index.
Britain’s top share index fell 1.7 per cent to 7,042 points, its lowest level since December 2016, while the more domestically exposed mid cap index limited its decline to 0.6 per cent.
The DAX 30 in Germany was down 1.39 per cent, and France’s CAC 40 fell 1.13 per cent.
Britain and the EU agreed to a transition period to avoid a “cliff edge” Brexit next year — though only after London accepted a potential solution for the border with the Irish Republic that may face stiff domestic opposition.
Confirmation that Britain would remain as effectively a non-voting EU member for 21 months until the end of 2020 boosted the pound but further hit the FTSE, already weighed down by a 50 per cent drop in Micro Focus following a gloomy revenue outlook.

Asian Markets

Asian share markets traded mixed on Monday as caution gripped investors in a week in which the Federal Reserve is likely to hike US interest rates and perhaps signal that as many as three more lie in store for the rest of the year.
Japan’s Nikkei extended early losses to drop 0.9 per cent as exporters were undermined by recent broad-based strength in the yen.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.35 per cent, but China managed to eke out some gains.
The S&P/NZX 50 index on Monday rose 0.18 per cent, to 8,492.12.

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