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Market Opener – 28 Nov 2018

 
Local Markets Commentary
The Australian market opens mid-week trade on vacillating overnight international equities trade and largely negative commodities price leads, ahead of key data in the US tonight and a speech by Federal Reserve chair Jerome Powell.

Locally today, the Australian Bureau of Statistics reports September quarter construction sector activity 11.30am AEDT. 

In overnight commodities trade, oil settled lower.

Iron ore (China port 62% Fe) bounced some, ending a five-session decline. 

US (December) gold futures continued to decline. 

LME base metals fell.

The $A slipped below US72.30c after trading at ~US72.35c early yesterday evening.

Overseas Market Commentary
Marked choppy, swinging trade featured across major European and US equities markets, amid a series of pessimistic and threatening US administrative comments regarding China’s trade stance.

The DJIA and S&P 500 closed very close to session highs, however, in part on a claim of ‘a lot of communication’ between top-level officials in the US and China, and Netflix and Google gains.

The posturing, assertions and vacillating trade came ahead of a proposed meeting between the presidents of China and the US this coming weekend during the 30 November – 1 December G20 leaders’ summit.

In addition, two high-profile vehicle manufacturers suffered price drops following confirmation this year’s deterioration in US-China trade relations was damaging their bottom line. 

Further, speculation regarding US Federal Reserve policy late this year and through 2019 continued to grow, with four officials, including the vice chair, speaking publicly.

Also closely aligned with speculation, in particular regarding an OPEC decision early-December regarding output, oil turned lower following a single-session gain.

Among overnight US data releases, a Conference Board consumer confidence reading came in at 135.7, from 137.9. The expectations component of the index fell to 111 from 115.1.

Case-Shiller and FHFA September house price indices varied, the Case-Shiller reading remining flat for the month, but the FHFA index rising 0.2%, following respective 0.3% and 0.4% August gains.

Year-on-year, Case-Shiller estimated prices were 5.1% higher.

Tonight in the US, a second September quarter GDP estimate (a third to come) is keenly anticipated.

October new home sales and wholesale inventories are also due, together with a regional manufacturing index and weekly mortgage applications. 

In addition, US Federal Reserve chair Jerome Powell is scheduled to speak at the Economic Club of New York. 

Tiffany and China’s Weibo are among companies scheduled to report earnings.

In overnight corporate news, Tesla revealed it had sold 70% fewer vehicles in China, year-on-year during October.

General Motors also suffered on subsidy-removal threats from the US president after announcing a significant restructure and job cuts the previous session, in part related to US import and export argy-bargy. 

Salesforce.com has reported post-US trade.
 
28/11/2018 7:00:00 AM

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