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Market Opener – 08 Aug 2018

Local Markets Commentary
The Australian market commences mid-week trade on mostly positive overnight key international trade ahead of influential data out of China and with full year corporate reports from major domestic stocks.

China’s July trade figures are anticipated 1pm AEST.

Post-trade yesterday, China reported July foreign reserves had grown to $US3.118 trillion from $US3.112 trillion in June.

Regionally also today, the Bank of Japan publishes the opinions summary from its late-July policy meeting, 9.50am AEST.

Locally today, Reserve Bank of Australia (RBA) governor Philip Lowe is scheduled to speak publicly on Demographic Change & Recent Monetary Policy 1.05pm AEST.

The Australian Bureau of Statistics (ABS) releases June housing finance figures 11.30am AEST.

AFI and OGC are among a batch of stocks trading ex-dividend today. Details can be found on p3.

In overnight commodities trade, oil gains varied, WTI rising slightly and Brent continuing to rally. 

US gold futures settled essentially flat.

Iron ore (China port, 62% Fe) added to this week’s gains.

LME copper turned higher and nickel continued so.

The $A pulled back below US74.20c after being propelled to ~US74.35c early yesterday evening.

Overseas Market Commentary
Major European and US equities markets rallied on opening overnight, sentiment hardly looking seriously threatened throughout trade.

Earlier, China had continued its media accusations against the US trade stance, while the US had warned anyone doing business with Iran in contravention of the newly-imposed US sanctions relating to automobiles, metals trade and aerospace business would be locked out of US trade deals.

Later, the US revealed the new list of imports ($US16B worth across ~280 products, including semiconductors) from China that will attract 25% tax from 23 August.

Among US data releases, a June job opportunities report indicated mixed hirings across industry, the rate of available jobs remaining at 4.3%.

Consumer credit rose to $US10.21B, against forecasts of ~$US15B, after jumping by $US24.3B in May.

In Germany, June exports came in flat following a 1.7% rise in May. Imports rose 1.2%, after a 0.7% May gain.

The trade surplus slipped €1B to €19.3B

June industrial production also disappointed, falling 0.9% after improving 2.4% in May.

Orders reportedly fell by the most in a month for ~18 months.

For the June quarter, industrial output rose 0.4%.

All up, the data was viewed as pointing to mild June quarter GDP growth, this due to be reported next week.

Tonight in the US, weekly mortgage applications are due. 

Companies scheduled to report earnings or provide an update later today and tonightinclude: AirXpanders, Autohome,, Cathay Pacific, CVS Health, Glencore, Korea Gas, Mylan, Office Depot, Michael Kors, Occidental Petroleum, Prudential, Shiseido, Twenty-First Century Fox and Weibo.

In overnight corporate news, Domino’s Pizza’s half-year report received a mixed response, on improving sales (supported by UK support during the World Cup) but higher costs. 

Later, Tesla drew a definitively positively response on news the company may go private.

In addition, reports revealed Saudi Arabia’s sovereign wealth fund has supported the company with a $US2B investment to date.

Tesla trade was temporarily halted before the stock ultimately closed ~10% higher for the session.
8/08/2018 8:00:00 AM

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