Wednesday: 24th January 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 17 points.

The Australian share market looks set to open comfortably higher after strong gains on major international markets and a mainly positive lead from Wall Street thanks to upbeat earnings reports.
US stocks have advanced, as strong results from Netflix helped lift the S&P and Nasdaq Composite, but declines in Johnson & Johnson and Procter & Gamble kept the Dow Industrials in check.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market looks set to open comfortably higher after strong gains on major international markets and a mainly positive lead from Wall Street thanks to upbeat earnings reports.
At 0700 AEDT on Wednesday, the share price futures index was up 17 points, or 0.28 per cent, at 6,003.
No major economic news is expected on Wednesday.
In equities news, energy company Santos is slated to post a quarterly report, while Australian Pharmaceutical Industries has its annual general meeting scheduled.
The Australian market on Tuesday posted its best daily gain since October as investors welcomed an end to the US government shutdown.
The benchmark S&P/ASX200 index gained 45.1 points, or 0.75 per cent, to 6,037 points, while the broader All Ordinaries index added 44.5 points, or 0.73 per cent, to 6,150.7 points.

US Markets

US stocks have advanced, as strong results from Netflix helped lift the S&P and Nasdaq Composite, but declines in Johnson & Johnson and Procter & Gamble kept the Dow Industrials in check.
Netflix touched a record high of $US257.71 and was last up 9.98 per cent at $US250.30, to cross the $US100 billion market value threshold after the video-streaming pioneer beat Wall Street targets for new subscribers in the fourth quarter.
Other stocks, known as part of the “FAANG” – Facebook, Apple, Amazon and Google parent Alphabet – also moved higher.
In late trading, the Dow Jones Industrial Average is down 0.05 per cent at 26,202.29, the S&P 500 is up 0.23 per cent at 2,839.52 and the Nasdaq Composite is 0.61 per cent higher at 7,452.95 at 3.18 pm EST (0718 AEDT).

Commodities

Gold prices climbed modestly, finding support as the U.S. dollar hovered at three-year lows.
February gold gained $4.80, or 0.4%, to settle at $1,336.70 an ounce, ending at its highest since Jan. 17, with its month-to-date advance at roughly 2.1%. Among exchange-traded funds, the SPDR Gold Shares and the VanEck Vectors Gold Miners each climbed by 0.2%.
IRON ORE: $72.10 -2.36 (February contract)

Oil Futures

Oil settled higher, with U.S. prices notching their highest finish in more than three years.
Prices got a boost on expectations for further declines in U.S. crude supplies and comments from Saudi Arabia’s energy minister suggesting that producers may extend their production-cut agreement beyond its expiration at the end of this year.

Forex

The U.S. dollar slipped intraday as a decline in government bond yields reduced investor demand for the currency.
The Wall Street Journal Dollar Index, which measures the currency against a basket of 16 others, fell 0.1% to 84.19.
The dollar fell against the yen after Bank of Japan Gov. Haruhiko Kuroda continued his efforts to cool recent speculation that the bank will raise rates this year. Bond yields in the U.S. fell after the Japanese central bank signaled it isn’t ready to join a global wave of unwinding led by the Federal Reserve. BOJ policies currently range from negative interest rates to purchase the country’s government bonds.
The decline in bond yields “doesn’t help the dollar,” said Brian Daingerfield, a strategist at NatWest Markets.
Australian dollar:
The Australian dollar is a smidgen higher against its US counterpart after US lawmakers agreed an interim funding bill but there was no major economic data to inspire the languishing greenback.
At 0635 AEDT on Wednesday, the Australian dollar was worth 79.93 US cents, up from 79.90 US cents on Tuesday.

European Markets

European shares rose to new highs on Tuesday after US senators struck a deal to end a three-day government shutdown, while earnings updates were also in focus.
Euro zone stocks reached their highest in a decade, with Germany’s DAX jumping to a fresh record of just over 13,596 points. The DAX ended 0.7 per cent higher, while the pan-European STOXX 600 closed the session up 0.1 per cent.
After a previous session fuelled by M&A news, corporate updates maintained the buoyant mood.
Investors cheered plans by Europe’s biggest retailer Carrefour to slash costs, open its loss-making Chinese business to new investors and spend more heavily on e-commerce in the face of competition from Amazon.
Carrefour touched a five-month high with a 3.2 per cent rise. Bernstein analysts said the strategic plan “ticks all the right boxes”.

Asian Markets

Asian stocks surged on Tuesday after US senators struck a deal to end a government shutdown in a boost to Wall Street, with its key index lifting by more than one per cent.
The BOJ maintained its short-term interest rate target at minus 0.1 per cent and a pledge to guide 10-year government bond yields around zero per cent.
The BOJ also said “inflation expectations have moved sideways recently,” offering a slightly more upbeat view than three months ago when it said they were on a weak note, but it is still far from its peers who were looking for ways out of unconventional monetary policies.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.88 per cent to a record peak.
Japan’s Nikkei rose to a 26-year peak, up 1.29 per cent at 24,124.15, while Hong Kong’s Hang Sang scaled a record high up 1.66 per cent at 32,930.70.
China stocks extended a rally to fresh two-year peaks with the Shanghai Composite index up 1.29 per cent at 3,546.98, underpinned by continued gains in banking and real estate firms, and the blue-chip CSI300 index 1.06 per cent higher at 4,382.61.
The S&P/NZX50 Index fell 0.3 per cent to 8,307.63.

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