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Before making any investment decision, you should consult your adviser.
Market Opener – 24 May 2018
Local Markets Commentary
The Australian market opens today’s trade on decidedly mixed overnight trade leads, with broad international geopolitical and economic relationships remaining in flux.
Yesterday evening, Reserve Bank of Australia (RBA) governor Philip Lowe told a seminar that any potential outcome of China’s current debt build-up remains too early to call, but that the situation required close monitoring from Australia’s economic perspective.
In overnight commodities trade, Brent and WTI crude again settled mixed.
US gold futures continued slightly higher.
Iron ore (China port, 62% Fe) extended its current decline, having now fallen each of the past five sessions.
LME copper and nickel turned and fell.
The $A rose to ~US75.65c after dropping to ~US75.30c early yesterday evening.
Locally today, PDL (formerly BT Investment Management) trades ex-dividend.
This morning, New Zealand has reported a $NZ3.67B trade deficit as at 30 April.
Overseas Market Commentary
US equities markets opened lower overnight and chopped, but trended higher, especially following the releases of Federal Reserve policy meeting minutes.
Major European indices headed lower from open and never recovered, amid weaker-than-anticipated data, ongoing uncertainty regarding Italy’s likely stance in Europe, a yet higher $US, and reports of possible new US-imposed vehicle import tariffs.
The US Federal Reserve’s May policy meeting minutes indicated a more gradual than previously anticipated rise in rates, FOMC members noting businesses feared adverse outcomes to current tariff and trade talks.
The bank concluded however, that predicting ultimate developments remained difficult, and that another rate rise remained likely required ‘soon’.
Members also noted inflationary growth, but nothing considered rampant, and expectations of stronger June quarter GDP growth compared with the March quarter.
April new home sales fell 1.5% for the month, but a 2% pullback was anticipated by some.
Markit’s initial May manufacturing and services PMIs also surprised on the upside, coming in respectively at 56.6 and 55.7
Weekly mortgage applications continued to fall as 30-year rates continued higher, to as much as 4.86%.
Late-Tuesday, the US president indicated the planned US-North Korea leaders meeting was unlikely to happen in June.
In the UK, April CPI slipped 0.1% on an annual basis to 2.4%, but rose 0.4% for the month following a 0.1% increase for March.
Undershooting forecasts however, the figures pushed the British pound to new 2018 lows against the $US.
Euro zone data largely disappointed.
Germany’s initial May manufacturing PMI represented a 1.3-point fall to a remaining robust 56.8, but the lowest reading in 15 months. The services sector activity index also fell, by 0.9 to 52.1, a 20-month low.
The respective overall euro zone figures came in at 55.5 (-0.7) and 53.9 (-0.8) respectively.
Earlier, a May manufacturing PMI for Japan had been estimated 1.3 lower than for April, at 52.5.
Meanwhile in Italy, the president approved the nominee for PM put up by a coalition that is feared could promote friction with the European Union.
In Turkey, the central bank raised a key lending rate by 3% to 16.5%, producing a desired, if temporary, lira rally.
Tonight in the US, weekly new unemployment claims, March house prices, a regional manufacturing index and April existing home sales are due.
Best Buy, Gap, Lenovo, Medtronic, TalkTalk and United Utilities are among companies scheduled to report earnings later today or tonight.
In overnight corporate news, Comcast (-~2%) announced it was preparing to challenge the Disney (-~1%) bid for much of Twenty-First Century Fox (+~1.5%) with an indicative cash offer seemingly supported by Twenty-First 7.4% shareholder Christopher Hohn.
Fortunes varied for a swag of retailers on both sides of the Atlantic, following earnings reports.
Tiffany was propelled more than 20% higher on figure, an improved full-year profit prediction and a $US1B buy-back.
Target Corp however, tumbled more than 5.5% after falling short of profit expectations.
Lowe’s benefited from high-profile investor Bill Ackman’s revelation that his hedge fund held ~$US1B worth of the home improvement retailer’s stock.
UK department store Marks & Spencer revealed another profit fall, in part due to costs associated with store closures. Earlier this week, the group said it would accelerate the closure program and likely shutter 100 stores within four years.
Meanwhile, US and UK markets are heading towards Monday holiday long weekends.
The Australian market opens today’s trade on decidedly mixed overnight trade leads, with broad international geopolitical and economic relationships remaining in flux.
Yesterday evening, Reserve Bank of Australia (RBA) governor Philip Lowe told a seminar that any potential outcome of China’s current debt build-up remains too early to call, but that the situation required close monitoring from Australia’s economic perspective.
In overnight commodities trade, Brent and WTI crude again settled mixed.
US gold futures continued slightly higher.
Iron ore (China port, 62% Fe) extended its current decline, having now fallen each of the past five sessions.
LME copper and nickel turned and fell.
The $A rose to ~US75.65c after dropping to ~US75.30c early yesterday evening.
Locally today, PDL (formerly BT Investment Management) trades ex-dividend.
This morning, New Zealand has reported a $NZ3.67B trade deficit as at 30 April.
Overseas Market Commentary
US equities markets opened lower overnight and chopped, but trended higher, especially following the releases of Federal Reserve policy meeting minutes.
Major European indices headed lower from open and never recovered, amid weaker-than-anticipated data, ongoing uncertainty regarding Italy’s likely stance in Europe, a yet higher $US, and reports of possible new US-imposed vehicle import tariffs.
The US Federal Reserve’s May policy meeting minutes indicated a more gradual than previously anticipated rise in rates, FOMC members noting businesses feared adverse outcomes to current tariff and trade talks.
The bank concluded however, that predicting ultimate developments remained difficult, and that another rate rise remained likely required ‘soon’.
Members also noted inflationary growth, but nothing considered rampant, and expectations of stronger June quarter GDP growth compared with the March quarter.
April new home sales fell 1.5% for the month, but a 2% pullback was anticipated by some.
Markit’s initial May manufacturing and services PMIs also surprised on the upside, coming in respectively at 56.6 and 55.7
Weekly mortgage applications continued to fall as 30-year rates continued higher, to as much as 4.86%.
Late-Tuesday, the US president indicated the planned US-North Korea leaders meeting was unlikely to happen in June.
In the UK, April CPI slipped 0.1% on an annual basis to 2.4%, but rose 0.4% for the month following a 0.1% increase for March.
Undershooting forecasts however, the figures pushed the British pound to new 2018 lows against the $US.
Euro zone data largely disappointed.
Germany’s initial May manufacturing PMI represented a 1.3-point fall to a remaining robust 56.8, but the lowest reading in 15 months. The services sector activity index also fell, by 0.9 to 52.1, a 20-month low.
The respective overall euro zone figures came in at 55.5 (-0.7) and 53.9 (-0.8) respectively.
Earlier, a May manufacturing PMI for Japan had been estimated 1.3 lower than for April, at 52.5.
Meanwhile in Italy, the president approved the nominee for PM put up by a coalition that is feared could promote friction with the European Union.
In Turkey, the central bank raised a key lending rate by 3% to 16.5%, producing a desired, if temporary, lira rally.
Tonight in the US, weekly new unemployment claims, March house prices, a regional manufacturing index and April existing home sales are due.
Best Buy, Gap, Lenovo, Medtronic, TalkTalk and United Utilities are among companies scheduled to report earnings later today or tonight.
In overnight corporate news, Comcast (-~2%) announced it was preparing to challenge the Disney (-~1%) bid for much of Twenty-First Century Fox (+~1.5%) with an indicative cash offer seemingly supported by Twenty-First 7.4% shareholder Christopher Hohn.
Fortunes varied for a swag of retailers on both sides of the Atlantic, following earnings reports.
Tiffany was propelled more than 20% higher on figure, an improved full-year profit prediction and a $US1B buy-back.
Target Corp however, tumbled more than 5.5% after falling short of profit expectations.
Lowe’s benefited from high-profile investor Bill Ackman’s revelation that his hedge fund held ~$US1B worth of the home improvement retailer’s stock.
UK department store Marks & Spencer revealed another profit fall, in part due to costs associated with store closures. Earlier this week, the group said it would accelerate the closure program and likely shutter 100 stores within four years.
Meanwhile, US and UK markets are heading towards Monday holiday long weekends.