Research

Disclaimer: All information on this section is of a general nature.
Before making any investment decision, you should consult your adviser.

Market Opener – 29 Nov 2018

 
Local Markets Commentary
The Australian market commences today’s trade following a substantial overnight $A rise, a US equities rally on signs the pace of US rate rises could slow, and price gains for select key commodities. 

The $A was propelled to ~US73.10c after trading at ~US72.35c early yesterday evening.

In overnight commodities trade, oil fell.

US (December) gold futures swung higher. 

Iron ore (China port 62% Fe) rose decisively for a second consecutive session. 

LME copper rallied.

Locally today, September quarter private capital expenditure is due 11.30am AEDT. 

October new home sales are scheduled for release 11am.

Several large-cap and/or high-profile stocks also host AGMs today.

Companies trading ex-dividend include ALQ and TNE. Please see pp2-3 for detailed lists.

Overseas Market Commentary
Major European and US equities markets trade diverged overnight, key European indices opening higher but losing gains amid choppy trade.

US markets jumped just prior to mid-session on comments from US Federal Reserve chair Jerome Powell delivered at the Economic Club of New York, the DJIA, S&P 500 and NASDAQ each closing at session-highs.

Referring to a newly-introduced financial stability report from the central bank, Dr Powell listed risks to domestic economic growth, which included Fed policy, but described the financial system as ‘more resilient’ and hence deemed ‘vulnerabilities … moderate’.

Dr Powell’s comments regarding rate levels appeared to differ from a month ago, and were interpreted as indicating rate rises may not continue at the previously anticipated pace. The $US consequently swung lower.

Meanwhile, across the Atlantic, various figures from the UK government, Bank of England (BoE) and independent economists were quoted as estimates of the impact on UK GDP of the UK’s planned withdrawal from the European Union (EU).

The BoE promoted the current draft arrangements as preferable to a no-deal separation, which it claimed could produce an ~10% contraction over five years.

Government economists estimated a 4% reduction in GDP over 15 years, given the current plan is approved with limited changes.

The UK parliament is due to debate the draft deal over five sessions during the next two weeks, Tuesday through Thursday next week, and Monday-Tuesday the following week. Amendments are scheduled for selection the final Tuesday. 

In overnight data releases, the second reading of September quarter US GDP growth also provided some relief, remaining at 3.5%, the same as the first estimate, against some forecasts of a revision lower.

A government agency-estimated October goods trade deficit was estimated $US1B

October wholesale inventories rose 0.7%. 

October new home sales dropped 8.9% for the month, following a 1% September rise. 

The Richmond Fed manufacturing index came in at 14, from 15, and following expectations of 16. 

Weekly mortgage applications rose by 5.5%, 30-year rates pulling back by 0.04% to 5.12%. 

In Germany, a consumer confidence index slipped 0.2 to 10.4.

Tonight in the US, Federal Reserve November policy meeting minutes, October personal income and spending, pending home sales and weekly new unemployment claims are due. 

Elsewhere, another public speech is scheduled for European Central Bank president Mario Draghi. 

Dell, Dollar Tree, HP Inc and Thomas Cook are among companies scheduled to report earnings.

International Consolidated Airlines trades ex-dividend on the FTSE 100.

In overnight corporate news, Netflix revealed plans to expand European production by ~33% during 2019.
 
29/11/2018 7:00:00 AM

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