Disclaimer: All information on this section is of a general nature.
Before making any investment decision, you should consult your adviser.
Market Opener – 29 Jan 2019
Local Markets Commentary
The Australian market opens a new week’s trade with new China data in hand, and ahead of a week filled with:
• influential data releases;
• earnings reports from high-profile stocks;
• a new UK parliamentary vote on plans governing leaving the European Union;
• a US Federal Reserve policy meeting; and
• the resumption of high-level face-to-face China-US trade talks in Washington overnight Wednesday.
Yesterday, China reported a 1.9% year-on-year fall in December industrial profits, following a 1.8% November decline.
For 2018, profits were estimated 10.3% higher, against 2017’s 11.8% increase.
In overnight commodities trade, oil swung lower.
US gold futures (April) closed higher for a second consecutive session.
Overnight Friday, gold had turned and rallied beyond $US1304.0/oz.
Iron ore (China port 62% Fe fines) surged.
LME copper and other key base metals fell.
Overnight Friday, copper and aluminium had turned higher.
The $A has been trading at ~US71.65c.
Overnight Friday, the $A was pushed higher, to ~US71.80c.
Locally today, NAB’s monthly business survey results are due, 11.30am AEDT.
CommSec’s State of the States report is also expected today.
Regionally, New Zealand has this morning reported a better-than-anticipated $NZ264M December trade surplus.
Overall 2018 trade produced a $NZ5.9B trade deficit, the largest in 11 years.
Overseas Market Commentary
Major European and US equities markets headed lower overnight, impacted early by corporate and economic warnings, and a series of confirmations of ongoing unsettling political scenarios.
Full US government services resumed following the overnight Friday presidential agreement to approve measures that would temporarily restore activity.
Overnight, however, the president again threatened a shutdown, as early as next month.
In addition, China yesterday proceeded with its World Trade Organisation legal challenge against US tariffs, and berated nations placing business restrictions on Chinese companies.
This, ahead of high-level official US-China trade talks, including China VP Liu He, scheduled to commence in Washington Wednesday US time.
In the UK, media reports claimed thousands of UK companies had reported to their industry-representative groups plans to leave the UK, should the UK parliament fail to approve a supportive UK withdrawal agreement from the European soon.
Meanwhile, European Central Bank president Mario Draghi publicly admitted the euro zone’s economy had weakened more than initially envisaged.
Mr Draghi again pointed to soft demand and flailing economic sentiment due to geopolitical uncertainties.
However, he reiterated a remaining optimism regarding the region’s economic resilience.
In overnight data releases, the Chicago Fed national activity index rose to 0.27 from 0.21.
The Dallas Fed manufacturing index also improved, from -5.1 to 1.0
Tonight in the US, the Federal Reserve commences a two-day policy meeting, from which outcomes are expected early AEDT Thursday.
Among data releases, Conference Board’s January consumer confidence index, November house price index and December wholesale inventories are expected.
In addition, several held-back releases are anticipated from anytime this week.
Further, reporting season heats, in particular for large tech and defence stocks, including Apple and Lockheed Martin.
Elsewhere, European Central Bank president Mario Draghi is again scheduled to speak publicly.
In the UK, the PM is expected to present the latest proposal to parliament regarding the planned European Union withdrawal. Another vote is anticipated this week, as early as ~6am AEDT tomorrow (Wednesday).
Companies expected to report earnings for the December quarter, or provide a trading update, include: 3M, Advanced Micro Devices, Allergan, Biogen, Amgen, Apple, eBay, Lockheed Martin, Pfizer, PZ Cussons, SAP and Verizon Communications.
In overnight corporate news, Caterpillar December quarter profit and 2019 guidance disappointed.
Quarterly sales revenue increased 11%, to $US14.3B, but Caterpillar said this had been adversely impacted by reduced construction business demand in China.
Chip manufacturer Nvidia dropped more than 13.5% after reducing its January quarter revenue forecast, also citing weaker Chinese demand.
In association, Advanced Micro Devices, due to report tonight, was pushed ~8% lower.
UK supermarket chain Tesco announced up to 9000 job cuts, although some redeployment into new positions was planned.
The Australian market opens a new week’s trade with new China data in hand, and ahead of a week filled with:
• influential data releases;
• earnings reports from high-profile stocks;
• a new UK parliamentary vote on plans governing leaving the European Union;
• a US Federal Reserve policy meeting; and
• the resumption of high-level face-to-face China-US trade talks in Washington overnight Wednesday.
Yesterday, China reported a 1.9% year-on-year fall in December industrial profits, following a 1.8% November decline.
For 2018, profits were estimated 10.3% higher, against 2017’s 11.8% increase.
In overnight commodities trade, oil swung lower.
US gold futures (April) closed higher for a second consecutive session.
Overnight Friday, gold had turned and rallied beyond $US1304.0/oz.
Iron ore (China port 62% Fe fines) surged.
LME copper and other key base metals fell.
Overnight Friday, copper and aluminium had turned higher.
The $A has been trading at ~US71.65c.
Overnight Friday, the $A was pushed higher, to ~US71.80c.
Locally today, NAB’s monthly business survey results are due, 11.30am AEDT.
CommSec’s State of the States report is also expected today.
Regionally, New Zealand has this morning reported a better-than-anticipated $NZ264M December trade surplus.
Overall 2018 trade produced a $NZ5.9B trade deficit, the largest in 11 years.
Overseas Market Commentary
Major European and US equities markets headed lower overnight, impacted early by corporate and economic warnings, and a series of confirmations of ongoing unsettling political scenarios.
Full US government services resumed following the overnight Friday presidential agreement to approve measures that would temporarily restore activity.
Overnight, however, the president again threatened a shutdown, as early as next month.
In addition, China yesterday proceeded with its World Trade Organisation legal challenge against US tariffs, and berated nations placing business restrictions on Chinese companies.
This, ahead of high-level official US-China trade talks, including China VP Liu He, scheduled to commence in Washington Wednesday US time.
In the UK, media reports claimed thousands of UK companies had reported to their industry-representative groups plans to leave the UK, should the UK parliament fail to approve a supportive UK withdrawal agreement from the European soon.
Meanwhile, European Central Bank president Mario Draghi publicly admitted the euro zone’s economy had weakened more than initially envisaged.
Mr Draghi again pointed to soft demand and flailing economic sentiment due to geopolitical uncertainties.
However, he reiterated a remaining optimism regarding the region’s economic resilience.
In overnight data releases, the Chicago Fed national activity index rose to 0.27 from 0.21.
The Dallas Fed manufacturing index also improved, from -5.1 to 1.0
Tonight in the US, the Federal Reserve commences a two-day policy meeting, from which outcomes are expected early AEDT Thursday.
Among data releases, Conference Board’s January consumer confidence index, November house price index and December wholesale inventories are expected.
In addition, several held-back releases are anticipated from anytime this week.
Further, reporting season heats, in particular for large tech and defence stocks, including Apple and Lockheed Martin.
Elsewhere, European Central Bank president Mario Draghi is again scheduled to speak publicly.
In the UK, the PM is expected to present the latest proposal to parliament regarding the planned European Union withdrawal. Another vote is anticipated this week, as early as ~6am AEDT tomorrow (Wednesday).
Companies expected to report earnings for the December quarter, or provide a trading update, include: 3M, Advanced Micro Devices, Allergan, Biogen, Amgen, Apple, eBay, Lockheed Martin, Pfizer, PZ Cussons, SAP and Verizon Communications.
In overnight corporate news, Caterpillar December quarter profit and 2019 guidance disappointed.
Quarterly sales revenue increased 11%, to $US14.3B, but Caterpillar said this had been adversely impacted by reduced construction business demand in China.
Chip manufacturer Nvidia dropped more than 13.5% after reducing its January quarter revenue forecast, also citing weaker Chinese demand.
In association, Advanced Micro Devices, due to report tonight, was pushed ~8% lower.
UK supermarket chain Tesco announced up to 9000 job cuts, although some redeployment into new positions was planned.