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Research

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

Market Opener – 16 May 2019

 
Local Markets Commentary
The Australian market opens today’s trade following largely positive overnight international equities and commodities trade leads, ahead of additional April data out of China and influential domestic data reports this morning, and as a major domestic bank trades ex-dividend.

Among other considerations, Australia remains two days out of official polling day for the national government election.

China’s April residential property price index is due 11.30am AEST.

Post-ASX trade yesterday, China reported a 6.2% rise in January – April foreign direct investment, against 6.5% for January through March. 

Locally today, the Australian Bureau of Statistics (ABS) releases April employment figures, also at 11.30am AEST.

Prior to this, the Melbourne Institute publishes its monthly inflation expectations report.

Also today, Reserve Bank of Australia (RBA) assistant governor (financial system) Michele Bullock is speaking at the ASIC annual forum, 12.45pm AEST.

In addition, WBC is among stocks trading ex-dividend. Please see p4 for a detailed list.

In overnight commodities trade, oil continued higher.

US gold futures (June) turned to record a slight gain.

Iron ore (China port, 62% Fe) swung higher, approaching $US97.0/t.

LME copper, nickel and aluminium extended Tuesday’s gains. 

The $A again barely changed after trading at US69.25c early yesterday evening.

Overseas Market Commentary
US equities markets trended higher early overnight.

Major European indices jumped ~two hours from close, initial trade appearing dampened by weaker data out of China, reported earlier yesterday. 

US relations with China and the Middle East remained clouded with China’s president again publicly declaring yesterday that the nation remained open for business.

The US administration reportedly ordered non-essential consulate and embassy personnel from Iraq, amid reports of a further US regional military build, and the US president issued an executive order which could ban the use of Huawei telecommunications equipment by US firms.

Reports also emerged, however, that the US may not impose China vehicle and parts import taxes by Saturday, as previously indicated. 

In addition, the US administration promoted an aluminium and steel-favourable near-term trade agreement with Canada and Mexico.

A plethora of data releases included euro zone March quarter GDP growth was confirmed in a final reading at 0.4% for the three months and 1.2% year-on-year.

For the December quarter 2018, GDP growth was reported at 0.2% and 1.2% respectively.

In Germany, March quarter GDP growth was estimated, in an initial reading, at 0.4% for the three months, following a flat December quarter result. This provided some relief.

Year-on-year, GDP grew 0.7%, against 0.6% for the December quarter.

30-year bond auction yields averaged 0.58% against 0.68% previously.

In the US, April retail sales disappointed, slipping 0.2% for the month, after rising 1.7% in March.

Industrial production surprised on the downside also, falling 0.5% for the month, following a 0.2% March increase. Year-on-year, output was 0.9% higher.

The New York Fed regional manufacturing index headed to 17.8 however, from 10.1.

A home builders’ housing market index rose three points to 66.

March business inventories were calculated flat following a 0.3% February increase.

Weekly mortgage applications declined 0.6%.

Tonight in the US, weekly initial jobless claims, April building permits and housing starts and the Philadelphia Fed manufacturing index are due. 

Elsewhere, the euro zone’s March trade balance will attract interest.

Companies expected to report earnings later today or tonight include: Baidu, Burberry, Korean Air Lines, Kumho, Nvidia, Pinterest and Walmart.

GlaxoSmithKline, Royal Dutch Shell and Tesco trade ex-dividend on the FTSE 100.

In overnight corporate news, China’s Alibaba Group was pushed greater than 1.5% higher on better-than-anticipated quarterly earnings.

US retailer Macy’s also exceeded expectations but traded lower.

Cisco Systems has reported positive figures post-US trade.
 
16/05/2019 8:00:00 AM

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