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Market Opener – 21 Aug 2019

 
Local Markets Commentary
The Australian market opens mid-week trade with another swag of domestic earnings reports, and negative overnight international equities sentiment, ahead of policy meeting minutes from the US Federal Reserve tonight.

Locally today, the monthly Westpac leading index report is due 11.30am AEST.

The Department of Employment also publishes its monthly skilled vacancies index.

Companies trading ex-dividend today include AGL, SGR and TAH. Please see pp4-5 for a detailed list.

In overnight commodities trade, oil continued higher, but WTI crude only slightly and Brent also at a slower pace than the previous two sessions.

US gold futures (December) swung modestly higher.

Iron ore (Nymex CFR China, 62% Fe) recorded another moderate fall, approaching $US94.00/t.

LME copper turned lower. Nickel and aluminium continued so. 

The $A changed little after trading at ~US67.75c early yesterday evening.

Meanwhile, the US Federal Reserve Kansas City division is preparing to host international central bankers, plus finance, business and political leaders at the Jackson Hole, Wyoming annual conference, focusing on economic policy, from tomorrow night.

G7 leaders are preparing to meet in France over the weekend.

Overseas Market Commentary
Major European and US equities markets swung lower overnight, largely chopped their way through their respective sessions, and settled at or new session lows.

This, on disappointing economic indicators, amid pessimism surrounding an orderly separation of the UK from the European Union, and ahead of key reports and events from tonight through the weekend. 

Italy’s PM had also earlier resigned after accusing the leader of a government coalition partner of irresponsible behaviour. This underscored views of the nation’s fragility and the region’s economic risks.

The European Union reportedly once again alleged the UK was not offering viable alternatives in relation to conditions proposed for the UK-EU separation, in particular for the border ‘backstop’ plan for EU member Ireland.

Further, officials lambasted the UK PM’s proposals, labelling some information as ‘misleading’ and ‘incorrect’.

Other business and broader community debate centred on plans for general EU-UK border movement following the UK PM’s comments the previous day.

Meanwhile, US banking regulators reportedly approved some easing of trading rules for large financial institutions.

In overnight data releases, the euro zone’s July construction output was reported 1% higher year-on-year, against a 1.7% June increase. 

In the UK, the August CBI industrial trends orders reading improved from-34 to -13.

In the US, a Philadelphia region services activity index tumbled from 21.4 to 7.5.

Tonight in the US, the Federal Reserve’s July policy meeting minutes are keenly anticipated. July existing home sales and weekly mortgage applications are also due.

Companies scheduled to report earnings later today and tonight include Analog Devices, Barnes & Noble, Lowe’s and Target. 

In overnight corporate news, US home improvement retailer Home Depot warned on full year revenue, citing consumer sentiment in the wake of import taxes on goods from China. However, the company pleased with figures from the most recent quarter’s trade and appreciated ~4.5%.

Department store Kohl’s was pushed more than 5% lower however, following disappointing trade.

Construction company Toll Brothers has reported falls in both profit and revenue.

 
21/08/2019 8:00:00 AM

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