Wednesday: 3rd January 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 8 points.

The Australian share market looks set to open slightly higher with a boost by Wall Street’s strong rally on its first trading day for 2018.
Wall Street’s major indexes are higher in their first trading session of 2018, driven by gains in technology and consumer discretionary stocks, setting the stage for another robust year for equities.
Oil prices edged off a 2 1/2-year high intraday, after supply disruptions eased in the North Sea and Libya, while rising tensions in major oil exporter Iran underpinned the market.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market looks set to open slightly higher with a boost by Wall Street’s strong rally on its first trading day for 2018.
At 0700 AEDT on Wednesday, the share price futures index was up eight points, or 0.13 percent, at 6,030.
No major economic or equities news is expected on Wednesday.
The Australian market on Tuesday closed lower on its first day of trade for 2018, dragged down by soft financial stocks amid thin trading volumes and no overseas leads.
The benchmark S&P/ASX200 index fell 3.8 points, or 0.06 percent, to 6,061.3 points, while the broader All Ordinaries index lost 1.3 points, or 0.02 percent, to 6,166.0.
Meanwhile, the Australian dollar has slipped a little lower against its US counterpart despite the greenback dropping to a three-month low.

US Markets
Wall Street’s major indexes are higher in their first trading session of 2018, driven by gains in technology and consumer discretionary stocks, setting the stage for another robust year for equities.
Major stock indexes closed out 2017 with their best performances since 2013 and the rally is widely expected to continue in 2018, helped by a cut in US corporate taxes that is anticipated to boost profits as well as the economy.
Gains in Apple, Facebook, Alphabet, and Microsoft pulled the technology index higher by about 1 percent, following a 37 percent surge in 2017 that made it the best performing S&P sector.
The S&P consumer discretionary index was up 1.35 percent, boosted by a 1.4 percent gain in Amazon and a 3 percent increase in Walt Disney.
Disney, Netflix and Discovery Communications climbed following brokerage Macquire’s upgrade to “outperform”.
J.C. Penney, Nordstrom and Kohl’s climbed after a bullish note on the retail sector by Citigroup detailed the benefits from the corporate tax cuts.
In late afternoon trade (1522 EST/0724 Wednesday AEDT), the Dow Jones Industrial Average was up 0.29 percent, at 24,791.53 and the S&P 500 was up 0.65 percent, at 2,691.12. The Nasdaq Composite was up 1.33 percent, at 6,995.00.
Commodities

Gold prices rose for the eighth straight session, supported by a weaker dollar.
Front-month gold for January delivery rose 0.6% to $1,313.70 a troy ounce on the Comex division of the New York Mercantile Exchange, posting its longest winning streak since February 2014. The precious metal just posted its best year since 2010, boosted by the dollar falling and geopolitical tensions, and notched a 12th day of gains in the last 13 sessions to start 2018.
Among base metals, front-month copper for January delivery fell 0.7% to $3.2560 a pound.
IRON ORE: $72.30 +4.25( January contract )

Oil Futures

Oil prices edged off a 2 1/2-year high intraday, after supply disruptions eased in the North Sea and Libya, while rising tensions in major oil exporter Iran underpinned the market.
Light, sweet crude for February delivery fell 22 cents, or 0.4%, to $60.20 a barrel on the New York Mercantile Exchange, after rising briefly earlier in the trading session.
Brent, the global oil benchmark, lost 46 cents, or 0.7%, to $66.41 a barrel.

Forex

The dollar fell to its lowest level in three months intraday on doubts that the Federal Reserve will be able to maintain its pace of rate increases this year in the face of low inflation.
The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.3% at 85.70.
U.S. consumer prices have stayed stubbornly weak despite other signs of economic revival, leaving investors wondering if the Fed can raise rates another three times this year, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, in a note to investors.
Expectations that rates will stay at current levels make the dollar less attractive to investors seeking yield.
However, signs of wage growth in Friday’s U.S. employment data could bolster the case for rate increases this year, Mr. Esiner said.

Australian Dollar:
The Australian dollar is slightly lower against its US counterpart, which has fallen to a three-month low in its first trading session for 2018, but has plunged against the yen and the euro.
At 0635 AEDT on Wednesday, the Australian dollar was worth 78.30 US cents, down from 78.39 US cents on Tuesday.

European Markets

European stocks faltered on its first trading day in the new year as autos stocks fell and strength in the euro weighed, while trading was cautious ahead of the launch of a major reform of European Union financial markets.
The pan-European STOXX 600 index dipped 0.2 percent, as did eurozone stocks, with Germany’s DAX down 0.36 percent at 12,871.39.
Autos stocks were 0.1 percent lower, dented by weaker car registrations data.
New car sales in France fell 0.51 percent in December and the share of new diesel cars dipped below 50 percent for the first time since 2000.
A trader also pointed to a report in Britain’s Daily Telegraph citing forecasts that UK car registrations data, due out on Friday, would show a 5 percent decline in new car sales.

Asian Markets

Asian stocks mainly began the new year close to their highest in a decade.
The sentiment was helped by news that North Korea had offered an olive branch to South Korea, with Kim Jong Un saying he was “open to dialogue” with Seoul. Yet activity was sparse, with Japan on holiday and many investors on an extended break.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.99 percent firmer after rising by one-third in value 2017 to heights last visited in 2007.
Hong Kong stocks rose the most in three months to a decade-high, led by mainland companies listed in the city, after Beijing kicked off H-share convertibility reform.
The market was also aided by China’s stronger-than-expected factory activity, as well as strong property sales performance during the last week of 2017.
The Hang Seng index closed up 1.99 percent at 30,515.31.
China’s main Shanghai Composite index closed up 1.24 percent at 3,348.33 points while its blue-chip CSI300 index ended up 1.40 percent at 4,087.40.
The NZX 50 was closed.

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