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State One Market Opener - 27 Oct 2016

Local Markets Commentary

The Australian market will open on mostly negative equities and mixed commodities leads.

In overnight commodities trade, oil continued to fall and US gold futures turned lower. LME copper settled slightly higher. Iron ore climbed yet higher.

The $A dropped to ~US76.5c after trading at ~US77.0c early yesterday evening.

Locally today, September trade prices are due 11.30am AEDST, and will likely spark speculation of budget deficit effects.

In addition, a swag of high-profile companies (incl AAD, BKL, JBH, TTS) hold AGMs and/or report for the September quarter.

Regionally today, China is due to publish industrial profits 12.30pm.

This morning, New Zealand has reported a $NZ1.4B September trade deficit, against expectations of $NZ1.2B.

Overseas Market Commentary

Major European and US equities markets reacted overnight to a plethora of corporate reports and some mixed economic indicators, ahead of key central bank policy meetings next week.

In addition, oil prices continued lower, impacting energy sector sentiment.

UK mortgage approvals were reported 3.4% higher in September than for August.

Germany’s GfK consumer sentiment index slipped 0.3 to 9.7, against expectations of a steady result. Import prices turned higher, rising 0.1% in September. Year-on-year, these were 1.8% lower, against 2.6% down for August.

In the US, September new home sales rose 3.1%, but August total was revised 34,000 lower.

The national September trade deficit was reported 5.2% lower, at $US56.1B, following forecasts of a rise to $US60.5B.

Wholesale inventories came in 0.2% higher, and retail stocks 0.3%.

Markit’s initial October services PMI was estimated 2.5 points higher for the month, at 54.8.

The combined statistics prompted some speedy upward forecasts for September quarter GDP, due tomorrow night (AEDST).

Weekly mortgage applications dropped 4.1% to their least in ~nine months, however.

Tonight in the US, weekly new unemployment claims are due, together with September pending home sales and durable goods orders, and a regional manufacturing index.

Alphabet, Amazon, Barclays, BT, Deutsche Bank, Dow Chemical, Ford Motor, Henderson Group, LinkedIn, Nomura, Potash Corp, Samsung Electronics, Twitter, Volkswagen and ZTE are among companies scheduled to report earnings and/or provide trading updates today and tonight.

ITV, Unilever and Wolseley trade ex-dividend on the FTSE100.

Overnight, Apple fell after revealing post-US trade Tuesday that quarterly revenue had fallen 9%, and that annual revenue had fallen for the first time in 15 years. Albeit, results exceeded some expectations, and Apple also predicted revenue would turn positive during the December quarter.

Yesterday, Nintendo dropped full-year operating profit guidance ~33%, in part due to a robust yen, and on 33% lower interim sales totalling $US1.3B.

Spain’s Banco Santander reported 1% higher, €1.7B quarterly NPAT, but worried UK investors, due to an 11% slide in UK income, attributed to reduced corporate banking fee income and a £43M wealth and investment products provision.

The FTSE100 was also impacted by Chile’s Antofagasta, which sounded a full-year output warning.

Coca-Cola reported quarterly profit (~$US1.1B) and revenue had slipped less than feared, however.

Boeing appeared pleased, also, quarterly profit ascending 33.7%.

27/10/2016 6:45:37 AM

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