Wednesday: 21st February 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 28 points.

The Australian share market looks set to open firmly in the red after Wall Street’s negative sentiment appears ready to swamp the local bourse.
A steep fall in Walmart shares put the skids on the blue-chip Dow’s six-day winning streak, but gains in Amazon and technology stocks initially propped up the S&P 500 and the Nasdaq before they too turned red.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market looks set to open firmly in the red after Wall Street’s negative sentiment appears ready to swamp the local bourse.
At 0705 AEDT on Wednesday, the share price futures index was down 28 points, or 0.47 per cent, at 5,877.
in economic news on Wednesday, the Australian Bureau of Statistics is due to release the wage price index for the December quarter and construction work done data, for the same quarter.
In equities news, Fairfax Media, Sydney Airport, Fortescue Metals, Santos, Downer EDI, Sirtex Medical Stockland, Lendlease, Coca-Cola Amatil, Wesfarmers, SeaLink Travel, The A2 Milk Company, and The Reject Shop are among companies reporting results on Wednesday.
The Australian market on Tuesday closed flat with a no-surprises line-up of company profit results failing to fire investor action in the absence of major overseas leads.
The benchmark S&P/ASX200 index fell 0.7 points, or 0.01 per cent, at 5,940.9, while the broader All Ordinaries index was up 1.6 points, or 0.03 per cent, at 6,045.6 points.

US Markets

A steep fall in Walmart shares put the skids on the blue-chip Dow’s six-day winning streak, but gains in Amazon and technology stocks initially propped up the S&P 500 and the Nasdaq before they too turned red.
The world’s biggest brick-and-mortar retailer reported a lower-than-expected profit and posted a sharp drop in online sales growth during the holiday period. Its shares slumped 9.4 per cent, on track for their biggest intraday percentage fall in more than two years.
Other retailers including Target, Kroger and Costco Wholesale fell between 1.3 per cent and 3.7 per cent, dragging the S&P consumer staples index down 1.62 per cent.
“The big thing is the miss by Walmart, driven largely by its online business, and that’s having investors scratching their heads,” said Kim Forrest, senior equity research analyst with Fort Pitt Capital Group in Pittsburgh.
“The assumption is that we’re all going to have one store and that is Amazon.”
The online retailer’s shares were up more than 2 per cent.

Commodities

Gold prices were clobbered, with the commodity booking its sharpest daily decline in more than a year, against a backdrop of a strengthening dollar and stabilizing equities.
IRON ORE: $77.41 +0.21(March contract)

Oil Futures

Oil prices were mixed, with the U.S. benchmark gaining ground on its global counterpart thanks to Canadian pipeline problems.
West Texas Intermediate futures for April delivery rose 53 cents, or 0.9%, to $62.08 a barrel. Brent crude, the global benchmark, lost 8 cents, or 0.1%, to $65.59 a barrel. The move left the gap between Brent and WTI prices the narrowest in six months.

Forex

The dollar climbed intraday, following U.S. government bond yields higher.
The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.4% to 83.47.
Rising Treasury yields sometimes make the dollar more attractive to investors seeking income. That relationship has been tested in recent months, however – the dollar has shed nearly 3% in 2018, even as yields climbed to multiyear highs.
The yield on the benchmark Treasury 10-year note rose to 2.904%, according to Tradeweb, from 2.877% Friday. Yields rise as bond prices fall.
Australian dollar:
The Australian dollar is firmly back below 79 US cents.
At 0635 AEDT on Wednesday, the Australian dollar was worth 78.85 US cents, down from 79.18 US cents on Tuesday.

European Markets

European shares rose on Tuesday thanks to a slew of well-received results, though banks were a weak spot after HSBC reported weaker-than-expected earnings and said it needed as much as $US7 billion of fresh capital.
The pan-regional STOXX 600 benchmark ended the session with a gain of 0.6 per cent, while the banking index declined 0.1 per cent.
A weaker euro also helped euro zone stocks make headway after a lacklustre start to the week.
HSBC dropped 3 per cent after its trading update, the last under outgoing CEO Stuart Gulliver, who has pushed through a painful restructuring of Europe’s biggest bank by market value.
Elsewhere, some positive earnings buoyed sentiment.
Edenred was among top performers, rising 6.5 per cent after the French provider of prepaid meal vouchers and cards reported record 2017 earnings, increased its dividend and expressed confidence for 2018.

Asian Markets

The Asian markets were subdued with weakness across the region and Chinese markets remaining closed for the Lunar New Year holiday.
MSCI Asia index fell 0.25 per cent while Japan’s Nikkei index lost 1.01 per cent to close at 21,925.10.
Hong Kong’s benchmark Hang Seng index, reopening after its Lunar New Year holiday, had edged up by midday on Tuesday, but later fell to close down 0.78 per cent at 30,873.63.
The S/NZX50 Index dropped 0.2 per cent, to 8,098.27.

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