Tuesday: 23rd January 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 32 points.

The Australian share market looks set to open comfortably higher after the world’s leading index offered positive leads and Wall Street hit record intraday highs.
US stocks have advanced as each of Wall Street’s main indexes touch a record intraday level after US senators struck a deal to end the federal government shutdown.
The Australian dollar once again has edged above 80 US cents as the US government shutdown weighs on the greenback.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market looks set to open comfortably higher after the world’s leading index offered positive leads and Wall Street hit record intraday highs.
At 0700 AEDT on Tuesday, the share price futures index was up 32 points, or 0.54 per cent, at 5,970.
In economic news on Tuesday, the ANZ-Roy Morgan Consumer Confidence weekly survey is due out.
In equities news, Lynas, Oil Search and Resmed are slate to post quarterly reports.
Meanwhile, JB Hi-Fi has been ranked within the world’s top 250 retailers for the first time, joining the likes of Woolworths, and Wefarmers.
The Australian market on Monday closed lower due to weakness from the major banks and investor caution over the US government shutdown.
The benchmark S&P/ASX200 index fell 13.9 points, or 0.23 per cent, to 5,991.9 points while the broader All Ordinaries index lost 13.1 points, or 0.21 per cent, to 6,106.2 points.

US Markets

US stocks have advanced as each of Wall Street’s main indexes touch a record intraday level after US senators struck a deal to end the federal government shutdown.
Senators voted to move forward on legislation that would reopen the federal government until February 8. Funding legislation cleared a procedural hurdle in the Senate and was expected to pass a full Senate vote promptly, allowing government to re-open.
But the shutdown has had little impact on the equities market.
“The market has been more than willing to ride the tailwind of better global growth and higher corporate earnings, not only in the US but globally,” said Michael Arone, Chief Investment Strategist at State Street Global Advisors in Boston.
Earnings growth of 12.4 per cent is expected for the quarter, according to Thomson Reuters data. Of the 55 companies in the S&P 500 that have reported earnings through Monday morning, 80 per cent have topped expectations, well above the 72 per cent beat rate for the past four quarters.
In late trading, the Dow Jones Industrial Average was up 0.25 per cent at 26,137.39, the S&P 500 had gained 0.48 per cent to 2,823.71 and the Nasdaq Composite had added 0.67 per cent to 7,385.31.

Commodities

Copper prices inched higher Monday, boosted by a falling dollar and another bullish global economic growth projection.
Front-month copper for January delivery climbed 0.3% to $3.1775 a pound on the Comex division of the New York Mercantile Exchange. Prices have fallen slightly from their nearly four-year highs hit late last year, but some investors expect the industrial metal to keep climbing, supported by strong global demand and supply disruptions.
IRON ORE: $74.46 -0.23(February contract)

Oil Futures

Oil prices ticked higher Monday, snapping a two-session losing streak as the dollar fell and the market weighed signals from Saudi Arabia that OPEC would be willing to extend production cuts beyond 2018.
U.S. crude futures rose 12 cents, or 0.19%, to $63.49 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 42 cents, or 0.61%, to $69.03 a barrel on ICE Futures Europe.

Forex

The dollar pared losses Monday, on signs that the U.S. government shutdown may soon be resolved.
The Wall Street Journal Dollar Index, which gauges the U.S. currency against a basket of 16 others, was recently down 0.1% at 84.43. The measure was as low as 84.26 earlier in the session.
Lawmakers in the Senate are expected to vote to advance a bill that would reopen the federal government after a brief shutdown, lawmakers and aides said, as Democrats agreed to a short-term pause in their standoff with Republicans over immigration policy.
A resolution to the standoff could offer some relief to the U.S. currency. Investors have pummeled the dollar in recent weeks amid U.S. political uncertainty and indications that central banks abroad may tighten monetary policy at a faster pace in response to robust economic growth.
Australian dollar:
The Australian dollar once again has edged above 80 US cents as the US government shutdown weighs on the greenback.
At 0635 AEDT on Tuesday, the Australian dollar was worth 80.08 US cents, up from 79.94 US cents on Monday.

European Markets

A flurry of merger activity among European stocks drove strong moves on Monday as regional indexes notched up new records, with investors shrugging off the US government shutdown as a global stocks “melt-up” continued to grip European markets.
Euro zone stocks gained 0.3 per cent to hit a fresh 10-year high, and the pan-European STOXX 600 index recovered from early losses to trade up 0.3 per cent.
Germany’s DAX rose 0.22 per cent to 13,463.69.
British shares, however, stumbled as strength in the pound weighed, while gambling companies suffered double-digit falls as fears of a government clampdown weighed on that sector.
Shares in William Hill and Ladbrokes fell 11.6 per cent and 7.9 per cent, respectively, after reports that the government was set to lower the limit on betting shop terminals to GBP2 from GBP100 in a move that could hit their revenue.
Their losses weighed on the mid cap index, which ended flat. The blue chip FTSE 100 was down 0.2 per cent at 7,715.44 points at its close.

Asian Markets

Asia’s key bourses mainly lifted confidently except Tokyo which was flat and China’s CSI300 which surged more than one per cent.
MSCI’s Asia ex-Japan stock index was firmer by 0.29 per cent while Japan’s Nikkei index closed up 0.03 per cent at 23,816.33.
Hong Kong’s benchmark Hang Seng Index rose to a fresh record, as mainland money continued to gush into the city’s stocks. Chinese investors used 45 per cent of the daily quota under the Shanghai-Hong Kong Stock Connect.
The Hang Seng index rose 0.43 per cent to 32,393.41. The Hang Seng China Enterprises index rose 0.19 per cent to 13,204.58.
China’s main Shanghai Composite index closed up 0.39 per cent at 3,501.36 points while its blue-chip CSI300 index ended up 1.19 per cent at 4,336.60.
The S&P/NZX50 Index gained 0.5 per cent to 8335.36.

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