Wednesday: 18th April 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 24 points.

The Australian share market is expected to open higher after US stocks rallied on the back of some strong company earnings reports.

US stock indexes have rallied as Netflix and UnitedHealth earnings impressed investors and boosted optimism about the US corporate reporting season.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open higher after US stocks rallied on the back of some strong company earnings reports.
At 0700 AEST on Wednesday, the Australian share price futures index was up 24 points, or 0.41 per cent, at 5,842.
The Australian share market on Tuesday closed almost flat as early gains drifted away following the Reserve Bank’s comments that the next interest rate movement will likely be up.
The benchmark S&P/ASX200 was up 0.2 of a point at 5,841.5 points, while the broader All Ordinaries index was up 1.3 points, or 0.02 per cent, at 5,934.3 points.
In equities news on Wednesday, Rio Tinto releases its quarterly operations review, and the Woodside first quarter production report is due out.
The Australian dollar on Wednesday morning is lower, weighed down by the release of weaker than expected Chinese economic data.

US Markets

US stock indexes have rallied as Netflix and UnitedHealth earnings impressed investors and boosted optimism about the US corporate reporting season.
Shares in Netflix, the first of Wall Street’s leading momentum stocks to report earnings, rose nine per cent to close at a record high after the video-streaming pioneer smashed analysts’ quarterly subscriber estimates.
Amazon.com was the S&P’s biggest boost with a four per cent jump, helped by Netflix results but also by signs the US Supreme Court is hesitant to let states force out-of-state online retailers to collect sales taxes on purchases.
Analysts expect S&P 500 company profits to rise 18.6 per cent in the first quarter, the biggest increase in seven years, according to Thomson Reuters data.
Strategists said strong earnings expectations as well as economic data from earlier in the day boosted equities.
“The overall picture is a positive one when it comes to earnings across sectors. There’s a nice little turbo boost being given by the tax reform legislation,” said Kristina Hooper, chief global market strategist at Invesco, in New York.
The Dow Jones Industrial Average rose 213.59 points, or 0.87 per cent, to 24,786.63, the S&P 500 gained 28.55 points, or 1.07 per cent, to 2,706.39 and the Nasdaq Composite added 124.81 points, or 1.74 per cent, to 7,281.10.

Commodities

Gold prices fell, once again hurt by a stronger dollar and the prospect of higher interest rates.
IRON ORE: $64.87 +0.76(May contract)

Oil Futures

Oil rose, as investors weighed ongoing geopolitical risks to supply in an increasingly tight market.
U.S. crude futures wavered between gains and losses throughout the day and ended the day higher, settling up 30 cents, or 0.45%, at $66.52 a barrel on the New York Mercantile Exchange. Brent, the global benchmark rose 16 cents, or 0.22%, to $71.56 a barrel on ICE Futures Europe.

Forex

The U.S. dollar edged higher against its rivals, helped by disappointing data out of Europe and a lack of fresh geopolitical headlines.
A flurry of Federal Reserve speakers and U.S. data later in the session was in focus for the session.
The ICE U.S. Dollar Index, a measure of the buck against six rivals, inched 0.1% higher to 89.497, rebounding slightly from a 0.4% loss on Monday. Meanwhile, the broader WSJ U.S. Dollar Index rose 0.1% to 83.60.
The British pound touched a high of $1.4377 earlier, its highest level since the U.K.’s Brexit vote in June 2016. But as the session went on, sterling lost its advantage and slipped to $1.4287, down from $1.4338 late Monday in New York.
The euro fell to $1.2371, compared with $1.2381 on Monday.

Australian Dollars:
The Australian dollar is lower, coming under pressure after the release of weaker than expected Chinese economic growth and industrial production figures.
At 0635 AEST on Wednesday, the local currency was worth 77.72 US cents, down from 77.85 US cents on Tuesday.

European Markets

British stocks advanced as sterling retreated from its highest level since the Brexit vote, while focus turned from geopolitical risks to corporate earnings that were largely supportive.
The FTSE 100 closed 0.4 per cent higher at 7,226.05 points, accelerating gains through the session as weaker-than-expected data weighed on sterling.
The pound’s jump to its highest level since the June 2016 Brexit referendum put pressure on Britain’s FTSE earlier in the day, but gains in financials and mining stocks helped boost the index.
Sterling’s recent strength has made some investors cautious around the FTSE’s large, dollar-earning constituents. On the day shares in big consumer firms such as British American Tobacco , Reckitt Benckiser and Diageo all fell between 0.5 per cent and 3.2 per cent.
Other European shares advanced, with the pan-European FTSEurofirst 300 index rising 0.8 per cent. Germany’s Deutsche Boerse DAX index closed 1.57 higher, and the French stock market was up 0.76 per cent.

Asian Markets

Asia stocks were mixed on Tuesday after data showed both hot and cold patches in the Chinese economy, but losses were limited as investors turned their focus to corporate earnings from Syria.
China’s economy grew a welcome 6.8 per cent in the first quarter of 2018 from a year earlier, official data showed on Tuesday, unchanged from the previous quarter.
But separate data showed March industrial output missed expectations and first-quarter fixed-asset investment growth slowed, tempering equity market gains.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.15 per cent.
South Korea’s KOSPI dipped 0.15 per cent and Hong Kong’s Hang Seng was down 0.83 per cent, and Japan’s Nikkei was up 0.06 per cent.
On Tuesday, New Zealand’s S&P/NZX 50 index fell 0.74 per cent, to 8,344.52.

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