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Market Opener – 17 Oct 2018
Local Markets Commentary
The Australian market opens mid-week trade after a decisive overnight swing across US equities markets, amid multiple simmering international geopolitical and business scenarios, including those featuring Saudi Arabia, the UK and the European Union.
US futures have fallen this morning.
In mixed overnight commodities trade, oil ultimately extended Monday’s gains.
US (December) gold futures settled slightly higher.
Iron ore (China port, 62% Fe) slipped a little.
LME copper fell. Nickel declined modestly but aluminium turned higher.
The $A appreciated to ~US71.40c after falling below US71.15c early yesterday evening.
Locally this morning, Reserve Bank of Australia (RBA) deputy governor Guy Debelle has addressed a Sydney conference on the national labour market.
Also today, Westpac and the Melbourne Institute are due to publish a monthly leading index report.
Regionally today, Hong Kong’s markets are scheduled to be closed.
Overseas Market Commentary
US equities markets opened higher overnight and trended towards session highs, buoyed in part by some better-than-anticipated quarterly reporting from high-profile stocks.
Major European indices continued to chop but also mostly featured positive trade before ultimately adding to Monday’s gains.
FTSE 100 sentiment vacillated the most ahead of a European Council meeting tonight, which will consider the UK’s proposals covering its 2019 scheduled separation from the European Union (EU).
The EU’s chief negotiator for the separation declared post-UK trade, however, that he was willing to extend the UK exit transition by one year on condition of a compromise regarding Northern Ireland border arrangements.
In overnight data releases, the euro zone’s August trade balance fell to €11.7B from €17.6B at 31 July.
Germany’s August import prices were reported flat for the month, after slipping 0.1% in July. Year-on-year, prices came remained 4.8% higher.
ZEW economic sentiment indices for the euro zone and Germany dropped to -19.4 and -24.7 respectively, from -7.2 and -10.6 in September.
In the UK, August quarter wages (excluding bonuses) rose by 3.1% after appreciating by 2.9% for the three months to the end of July.
This propelled the British pound 0.5% higher against the $US.
Unemployment claims rose by 18,500 in September following a 14,200 August rise.
In the US, September industrial production rose 0.3% for the month, against expectations of a 0.2% gain.
A job openings report estimated 7.14M available positions in August, following forecast of 6.9M.
A home builders’ sentiment index rose by one to 68, on par with a year earlier, against expectations of a one-point slip for the month.
Tonight in the US, the minutes of the Federal Reserve’s September policy meeting are keenly anticipated.
Overnight, the US president repeated his discontent with current Fed policy.
September housing starts and building permits, plus weekly mortgage applications are also due.
Elsewhere, Bank of England policy meeting minutes are due, plus September CPI updates for both the euro zone and UK.
Abbott Laboratories, Alcoa, ASOS, BHP Billiton, eBay and US Bancorp are among companies scheduled to report earnings or provide updates today and tonight.
In overnight corporate news, large-cap stocks across a variety of sectors supported optimism.
Morgan Stanley and Goldman Sachs helped bolster early sentiment, quarterly profits for each rising 19% and exceeding expectations.
BlackRock revealed its first net investor outflows in three years.
UnitedHealth pleased, raising full year guidance after reporting $US56.6B quarterly revenue.
A mix of positive cancer treatments and $US20.0B+ quarterly revenue also prompted Johnson & Johnson to lift full-year profit guidance.
Domino’s Pizza fell almost 5% however, after reporting disappointing sales and revenue.
Walmart lowered full-year earnings guidance citing an international e-commerce acquisition, but recorded a session gain, attributed to a positive outlook for the company’s US business.
Netflix reported post-US trade, quarterly figures including better-than-expected subscriber growth, totalling 5.87M. $US4b revenue reportedly matched industry forecasts.
The results, and those of IBM, which included lower-than-anticipated sales and revenue (-2.1% year-on-year), are likely to influence select trade tonight.
The Australian market opens mid-week trade after a decisive overnight swing across US equities markets, amid multiple simmering international geopolitical and business scenarios, including those featuring Saudi Arabia, the UK and the European Union.
US futures have fallen this morning.
In mixed overnight commodities trade, oil ultimately extended Monday’s gains.
US (December) gold futures settled slightly higher.
Iron ore (China port, 62% Fe) slipped a little.
LME copper fell. Nickel declined modestly but aluminium turned higher.
The $A appreciated to ~US71.40c after falling below US71.15c early yesterday evening.
Locally this morning, Reserve Bank of Australia (RBA) deputy governor Guy Debelle has addressed a Sydney conference on the national labour market.
Also today, Westpac and the Melbourne Institute are due to publish a monthly leading index report.
Regionally today, Hong Kong’s markets are scheduled to be closed.
Overseas Market Commentary
US equities markets opened higher overnight and trended towards session highs, buoyed in part by some better-than-anticipated quarterly reporting from high-profile stocks.
Major European indices continued to chop but also mostly featured positive trade before ultimately adding to Monday’s gains.
FTSE 100 sentiment vacillated the most ahead of a European Council meeting tonight, which will consider the UK’s proposals covering its 2019 scheduled separation from the European Union (EU).
The EU’s chief negotiator for the separation declared post-UK trade, however, that he was willing to extend the UK exit transition by one year on condition of a compromise regarding Northern Ireland border arrangements.
In overnight data releases, the euro zone’s August trade balance fell to €11.7B from €17.6B at 31 July.
Germany’s August import prices were reported flat for the month, after slipping 0.1% in July. Year-on-year, prices came remained 4.8% higher.
ZEW economic sentiment indices for the euro zone and Germany dropped to -19.4 and -24.7 respectively, from -7.2 and -10.6 in September.
In the UK, August quarter wages (excluding bonuses) rose by 3.1% after appreciating by 2.9% for the three months to the end of July.
This propelled the British pound 0.5% higher against the $US.
Unemployment claims rose by 18,500 in September following a 14,200 August rise.
In the US, September industrial production rose 0.3% for the month, against expectations of a 0.2% gain.
A job openings report estimated 7.14M available positions in August, following forecast of 6.9M.
A home builders’ sentiment index rose by one to 68, on par with a year earlier, against expectations of a one-point slip for the month.
Tonight in the US, the minutes of the Federal Reserve’s September policy meeting are keenly anticipated.
Overnight, the US president repeated his discontent with current Fed policy.
September housing starts and building permits, plus weekly mortgage applications are also due.
Elsewhere, Bank of England policy meeting minutes are due, plus September CPI updates for both the euro zone and UK.
Abbott Laboratories, Alcoa, ASOS, BHP Billiton, eBay and US Bancorp are among companies scheduled to report earnings or provide updates today and tonight.
In overnight corporate news, large-cap stocks across a variety of sectors supported optimism.
Morgan Stanley and Goldman Sachs helped bolster early sentiment, quarterly profits for each rising 19% and exceeding expectations.
BlackRock revealed its first net investor outflows in three years.
UnitedHealth pleased, raising full year guidance after reporting $US56.6B quarterly revenue.
A mix of positive cancer treatments and $US20.0B+ quarterly revenue also prompted Johnson & Johnson to lift full-year profit guidance.
Domino’s Pizza fell almost 5% however, after reporting disappointing sales and revenue.
Walmart lowered full-year earnings guidance citing an international e-commerce acquisition, but recorded a session gain, attributed to a positive outlook for the company’s US business.
Netflix reported post-US trade, quarterly figures including better-than-expected subscriber growth, totalling 5.87M. $US4b revenue reportedly matched industry forecasts.
The results, and those of IBM, which included lower-than-anticipated sales and revenue (-2.1% year-on-year), are likely to influence select trade tonight.