Wednesday: 25th July 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 16 points.

Australian shares look set to open higher on the back of a rise on Wall Street overnight, where expectations of a robust earnings season were bolstered.
U.S. stocks rose intraday as investors cheered what is shaping up to be a strong corporate-earnings season.

Overnight Summary

Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian stocks recouped a big chunk of Monday’s decline with the S&P/ASX 200 finishing up 0.6% at 6265.8, the fourth gain in five days and still on the doorstep of fresh 10 1/2-year highs. Miners drove the day’s advance, with BHP Billiton and Rio Tinto each picking up more than 1% and South32 gaining 2.3%. Consumer and healthcare stocks also rose strongly; Treasury Wine rebounded 5.5%. Meanwhile, the property sector was the only one to fall — amid rising bond yields — though telecom and energy were little changed.

US Markets

U.S. stocks rose intraday as investors cheered what is shaping up to be a strong corporate-earnings season. The Dow Jones Industrial Average rose 170 points, or 0.7%, to 25215. The S&P 500 rose 0.4%, and the tech-heavy Nasdaq Composite was roughly unchanged, giving up its earlier gains. With the earnings-reporting season about a fifth of the way through, the vast of S&P 500 companies have posted stronger-than expected earnings and revenue, according to FactSet. Earnings from U.S. companies have been “unparalleled” elsewhere, said Michael Scanlon, portfolio manager at Manulife Asset Management. He added that although some have said investors should put more money into places such as emerging markets, he thinks investors should zero in even more on the U.S. Shares of Google parent Alphabet jumped 3.1% after the search giant reported revenue and adjusted earnings that beat analysts’ estimates.


Gold futures inched lower, marking a second straight finish in the red as a rise in global stocks, perceived as risk assets, offset a slightly weaker dollar. Gold for August delivery on Comex shed 10 cents, or less than 0.1%, to settle at $1,225.50 an ounce, after also putting in a loss in the prior session. Prices had settled at $1,224 on Thursday, the lowest for a most-active contract in about a year. September silver, meanwhile, added 9 cents, or 0.6%, to $15.52 an ounce. The ICE U.S. Dollar Index, a measure of the U.S. currency against a basket of six major rivals, edged up down less than 0.1% lower at 94.59 Monday. Meanwhile, September wheat fell 3 1/2 cents to $5.10 1/4 a bushel.

IRON ORE: 65.71s + 0.35 (August contract)

Oil Futures

Oil prices rose on expectations that China’s plan to boost government spending will keep global oil demand robust, and on concerns simmering tensions between the U.S. and Iran may disrupt oil supplies. Light, sweet crude for September delivery ended 63 cents, or 0.9%, higher at $68.52 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, was up 0.5% at $73.44 a barrel. China’s State Council revealed new measures to support growth such as tax breaks and special bonds for infrastructure investment, which translated into broad buying in financial markets.


The dollar was little changed intraday, as investors weighed an optimistic outlook for the U.S. economy against recent White House comments regarding the currency’s strength. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently unchanged at 88.36. Some investors have turned more cautious on the dollar in recent days after President Donald Trump expressed frustration last week that rising interest rates had buoyed the currency, and he said he hoped the Fed would stop tightening. A stronger dollar makes U.S. exports less competitive abroad. While Mr. Trump’s comments may weigh on the dollar in the short term, expectations of more Fed rate increases and fears of a worsening trade dispute are likely to keep the U.S. currency strong against its peers, analysts at ING said in a note to clients.

European Markets

European stocks closed higher, as gains for UBS Group and others helped the market to enjoy its best daily climb since late June. Equities held to higher ground after preliminary manufacturing activity data for the eurozone in July came in above expectations. The Stoxx Europe 600 index added 0.9% to reach 388.18, topped by the basic materials and financial groups, representing its best one-day gain since June 22 and its highest finish since June 15, according to WSJ Market Data Group. On Monday, the pan-European index fell 0.2%, to log a third straight loss. Germany’s DAX 30 index rose 1.1% to 12,689.39. France’s CAC 40 advanced by 1% to 5,434.19, and Italy’s FTSE MIB charged up by 1.3% to 21,874.69. Spain’s IBEX 35 gained 0.5% at 9,820.10, and the U.K.’s FTSE 100 index finished up 0.7% at 7,709.05, representing a roughly six-week peak for the gauge.

Asian Markets

In Asia, Hong Kong’s Hang Seng rose 1.4% and the Shanghai Composite Index was up 1.6%. Meanwhile, Japan’s Nikkei and South Korea’s Kospi both posted 0.5% gains. Some of the morning’s biggest gainers in the Shanghai Composite Index were construction and infrastructure specialists, insurers and banks. Asian indexes rose after China’s cabinet, the State Council, unveiled a string of measures to boost domestic consumption amid economic pressure from an escalating trade spat with the U.S. The measures urged local governments to invest more in infrastructure using special bonds and included corporate tax cuts tied to research spending and increased support for small businesses, according to a statement. Seesawing equity markets have been commonplace in recent months as investors digested trade rhetoric and struggled to gauge the likelihood of increased tensions.

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