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Market Opener – 20 Sep 2018

 
Local Markets Commentary
The Australian market opens today’s trade with a batch of domestic corporate results, and some high-profile stocks trading ex-dividend, following vacillating overnight international equities trade as investors considered broad trade and geopolitical issues and a plethora of associated commentary. 

In overnight commodities trade, oil continued higher. 

US (December) gold futures gained.

Iron ore (62% Fe, China port) turned lower.

LME copper and nickel extended Tuesday’s gains, but aluminium pulled back. 

The $A has traded in a relatively narrow range after appreciating to US72.50c early yesterday evening.

Locally today, the Reserve Bank of Australia (RBA) releases its quarterly bulletin 11.30am AEST, together with August bank lending, forex transactions and reserve assets reports.

At the same time, the Australian Bureau of Statistics (ABS) publishes detailed March quarter population and August quarter employment reports.

Companies trading ex-dividend today include AHG, CWN and SPK. Please see p3 for additional ex-dividend stocks and details.

Regionally today, the leaders of South Korea and North Korea continue their joint meetings in North Korea after yesterday adding some detail to assurances of achieving regional nuclear stability.

This morning, New Zealand has reported 2.8% year-on-year June quarter GDP growth.

For the three months, growth came in at 0.8%.

Meanwhile, Japan’s markets are heading towards another Monday public holiday weekend.

China’s Shanghai and Shenzhen stock exchanges will also be closed Monday during the mid-Autumn festival.

Overseas Market Commentary
Major European and US equities markets mostly achieved little traction across overnight trade which ultimately nonetheless produced largely positive settlements.

The DJIA proved the exception, opening higher and sentiment never looking threatened through to session close. 

Shifting international goods and services trade implications remained forefront, as did broad political disquiet, in particular in the UK, Germany and US. 

Additional overnight trade influences included central bank revelations and a batch of notable data releases on both sides of the Atlantic.

Market analysts, however, were also noting repositioning ahead of a major change to the S&P Dow Jones Indices’ Global Industry Classification Standard (GICS), in particular technology, media and consumer classifications, come close of trade Friday (tomorrow). 

The changes include moving the commonly-termed FANG stocks from the IT sector into a newly formed communications services grouping, which will also include large media stocks currently residing in the consumer discretionary sector.

Apple will remain within the S&P technology index with a 20% weighting against the current 16%.

Among overnight data releases, UK 2.7% August year-on-year CPI growth surprised on the upside, pushing the British pound higher. 

The headline figure followed 2.5% for July, which had represented the first increase in eight months.

Entertainment, air and sea fares and clothing were cited as the major influencers on the further increase. 

US data releases included weekly mortgage applications, which rose 1.6% despite rates reaching seven-year highs. 

August housing starts rose 9.2%, helping propel 10-year US bond yields as high as 3.092% and 30-year yields to 3.238%. 

Building permits fell by 5.7% for the month, and 5.5% year-on-year, however. 

In the meantime, European Central Bank (ECB) president Mario Draghi advocated that euro zone governments establish a common fund sufficient to cushion regional economies in times of crisis. 

In the UK, Bank of England chief economist Andy Haldane highlighted heightened business concerns at indications coming out of negotiations between the UK and European Union, ahead of the UK’s proposed separation.

Brazil’s central bank opted to retain current interest rates.

Tonight in the US, weekly new unemployment claims, August existing home sales, the Philadelphia Fed manufacturing index and the Conference Board’s leading index report are due. 

Companies scheduled to report earnings or provide an update include Auto Trader (at AGM), Diageo (AGM) and Micron Technology.
 
20/09/2018 8:00:00 AM

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