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Market Opener – 31 May 2019

 
Local Markets Commentary
The Australian market commences end-of-month trade on a Friday, following modest positive settlements across major US international equities indices overnight.

This, ahead of a swag of material data for China, Japan and Australia today, plus closely-watched economic indicators out the US and Germany tonight.

China is expected to release official May PMIs 11am AEST.

Japan’s April industrial production and retail sales are scheduled for release 9.50am AEST.

Locally today, March quarter the Reserve Bank of Australia (RBA) publishes April financial aggregates, including private sector credit, 11.30am AEST.

In overnight commodities trade, oil dropped.

US gold futures (Aug) extended Wednesday’s gain.

Iron ore (China port, 62% Fe) fell further, but remained above $US103.5/t.

LME copper and aluminium continued to decline, but nickel turned higher. 

The $A fell to ~US69.10c after trading at ~US69.30c early yesterday evening. 

New Zealand’s markets will be closed Monday due to a public holiday.

Overseas Market Commentary
Major European and US equities markets opened higher overnight and largely chopped and swung their way to a concert of positive settlements. 

China continued its public accusations against the US. 

Yesterday, China’s defence minister accused the US of ‘seriously’ harming US-China military relations development, and in association peace and stability, in its support for Taiwan and navy patrols through the Taiwan Strait. Further, the minister asserted the US was ‘playing with fire’.

The minister and US acting defence secretary are expected to meet at the Shangri-La defence forum which commences in Singapore today.

In the meantime, a Chinese diplomat described the US style of setting up trade disputes as ‘naked economic terrorism’.

The nation’s vice foreign minister declared that China stood against protectionism, tariffs and trade sanctions, but was not afraid to act appropriately to circumstance, as a US media report claimed China had stopped buying US soybeans.

Among US data releases, the first revision of March quarter GDP growth came in, as largely expected, at 3.1%, 0.1% lower than the initial estimate. Imports were notably the least in ~six years.

April wholesale inventories rose by 0.7% following a flat March estimate, and the goods trade deficit reached $US72.12B, from $US71.33B.

Weekly new unemployment claims rose by 3000 to 215,500. The four-week moving average declined 3750 to 216,750. 

April pending home sales were reported 1.5% lower for the month and 2% lower year-on-year. Pending sales had risen 3.9% in March.

In the UK, an industry association reported UK vehicle manufacturing had dropped 45% year-on-year inn April.

The Society of Motor Manufacturers & Traders claimed this was mostly due to shut downs due to uncertainty surrounding likely UK-EU separation arrangements, at a time when major manufacturers were also spending on electric vehicle and autonomous vehicle research and developments, and as broad demand slowed, including in Asia, Europe and the United States.

Meanwhile in Brazil, March quarter GDP fell 0.2% for the three months, but was 0.5% higher than at 31 March 2018.

Tonight in the US, the Chicago PMI, April personal income and spending and a University of Michigan final May consumer sentiment reading are due.

In overnight corporate news, EE launched the first UK 5G service.

Facebook chairman Mark Zuckerberg was facing an AGM vote to step down from this role so as to focus on his CEO responsibilities. With Mr Zuckerberg holding 60% of the vote, however, the proposal was reportedly, and expectedly, voted down.

Uber’s quarterly loss doubled from a year earlier, in a report released post-US trade. 

US discount retailer Dollar General was pushed ~7% higher on better-than-anticipated quarterly profit.

Cyber security specialist Palo Alto Networks fell ~5% after accompanying its post-Wednesday US trade earnings report with reduced full year guidance.

PVH (owns Calvin Klein and Tommy Hilfiger) suffered an ~15% drop after revising full year earnings lower overnight.
 
31/05/2019 8:00:00 AM

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