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Market Opener – 19 Jul 2019

 
Local Markets Commentary
The Australian market commences Friday trade following an overnight ratcheting of Middle East tensions and with Japan’s June CPI update in hand. 

Post-US trade, the US claimed a drone operated by Iran had threatened a US navy vessel in the Strait of Hormuz by coming too close, and that the US had subsequently destroyed the drone.

Earlier, Iran had responded to a few days’ speculation, stating it had seized a foreign oil tanker in the Persian Gulf last Sunday, due to fuel smuggling suspicions.

Japan was scheduled to report June CPI 9.30am AEST.

In overnight commodities trade, oil ultimately dropped.

US gold futures (August) appreciated further, but modestly so, before jumping $US20/oz in post-settlement trade. 

Iron ore (China port, 62% Fe) continued to decline, this time settling below $US121.0/t but above $US120.85/t.

LME copper was pushed modestly lower.

Nickel extended this week’s rally, at an even greater pace. 

The $A appreciated beyond US70.60c this morning after trading at ~US70.30c early yesterday evening.

Overseas Market Commentary
Negative trade featured from the outset across major European and US equities markets overnight, but US indices recovered sufficiently to post positive settlements, with a lower rates promotion from a Federal Reserve district president and amid earnings reports from another set of high-profile stocks.

In addition, the US treasury secretary confirmed high-level US and China negotiators would talk again (overnight) despite some ‘complicated issues’.

US data releases included the Philadelphia Fed’s 21.8 July manufacturing index contrasted with the 0.3 June estimate.

The Conference Board’s June leading index fell 0.3% following a flat May reading.

Weekly new unemployment claims rose by 8000 to 216,000.

Earlier in the UK, June retail sales provided a little domestic relief, rising 1% for the month, following a 0.5% May pullback.

Compared with June 2018, sales were 3.8% higher.

Tonight in the US, an initial University of Michigan July consumer sentiment estimate is due.

Elsewhere, results of polling to determine the new leader of the UK’s conservative political party, and hence the new PM, are anticipated anytime from Sunday, but considered most likely Monday.

Overnight, the UK parliament voted to stop a new PM suspending parliament in order to push through a UK separation from the European Union (EU) independent of parliament.

Companies scheduled to report earnings include American Express, BlackRock, eBay and Schlumberger. 

In overnight corporate news, Boeing revealed the 737 Max turmoil will cost the company a post-tax $US4.9B post tax for the June quarter alone. 

Netflix, which had reported post-Wednesday US trade, dropped on falling subscriptions.

Morgan Stanley gained ~1.5% despite a 9% decline quarterly profit 

Microsoft has reported post-US trade, figures appearing to have pleased.
 
19/07/2019 8:00:00 AM

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