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Market Opener – 19 Jun 2018
Local Markets Commentary
Australian shares were set to rise at opening on the ASX this morning, swimming upstream against the tide of losses that had rippled through Wall St, Europe and Asia overnight.
Recovering bank stocks boosted the S&P/ASX 200 at close on Monday as Commonwealth Bank rose 1% to $69,70, ANZ was 1.4% higher at $27.05, NAB grew 1.4% to $26.52 and Westpac 0.9% to $28.15.
Trade tensions supported the US dollar, which had hit a year-long high over the weekend and continued to weigh on investors watching hawk-eyed for the next move in the economic chess war between Donald Trump and Beijing.
The Australian dollar was testing two-year lows at 0.7424 to the greenback this morning - which was good news for exporters, notably Australian Bauxite (ABX) and also Quickstep (QHL).
Overseas Market Commentary
The S&P 500 slipped overnight, taking its cue from declines in Europe and Asia as trade standoff tensions between the United States and China continued to weigh on markets.
U.S. Secretary of State Mike Pompeo fanned the trade war flames by referring to China’s appeal for economic openness as a “joke”.
Calling China “the most predatory economic government that operates against the rest of the world today”, Pompeo also referred to China’s “theft” of intellectual property as “an unprecedented level of larceny”.
But energy shares and software stock rose after the Stoxx 600 posted its biggest two-day slump since March and Japan’s Topix registered its largest dip in almost three weeks.
Oil was supported by a smaller than anticipated production sentiment boost for Fridaywhen OPEC meets in Vienna to discuss crude output. West Texas Intermediate rose 1.1% to US$65.8 a barrel.
Elon Musk has taken to Twitter to warn Tesla short sellers that they have about three weeks to cover before losing their money.
The Tesla CEO has been under pressure to deliver profits for the first time in the electric car manufacturers history and has promised to deliver in the third quarter.
Tesla stock rallied 20% early this month and rose 4% last week after the company announced it would lay off 10% of its staff.
In three weeks Tesla will reveal whether it has hit its targeted 5000 a week production rate for the Model3s. Tesla was trading at US$355 on Monday, compared to $375 a year ago.
In Germany Volkswagen shares dipped 3.1% with the carmaker in crisis talks following the arrest of Audi CEO Rupert Stadler as part of the ongoing investigation into emissions-test cheating.
Japan’s benchmark Nikkei 225 dropped 0.8% overnight, its biggest fall in three weeks, and South Korea’s KOSPI shed 1.2%. Markets were closed in Hong Kong for the Duanwu Festival.
In Asia overseas funds have withdrawn from six major emerging equity markets at a rate unseen since the global financial crisis.
According to Bloomberg investors have withdrawn US$19 billion from India, Indonesia, the Philippines, South Korea, Taiwan and Thailand this year.
American money market are now offering 2% yields and with additional Fed hikes forecast, investors have been losing their appetite for riskier markets as global liquidity tightens.
Earlier this month Bloomberg rated Malaysia, the Philippines, Indonesia and China as the best among 21 developing economies. South Africa fared poorest as a result of current account deficiencies and low foreign reserves.
Emerging market currencies fell for a fifth straight day overnight and are now on track for the biggest quarterly decline since September 2015.
Australian shares were set to rise at opening on the ASX this morning, swimming upstream against the tide of losses that had rippled through Wall St, Europe and Asia overnight.
Recovering bank stocks boosted the S&P/ASX 200 at close on Monday as Commonwealth Bank rose 1% to $69,70, ANZ was 1.4% higher at $27.05, NAB grew 1.4% to $26.52 and Westpac 0.9% to $28.15.
Trade tensions supported the US dollar, which had hit a year-long high over the weekend and continued to weigh on investors watching hawk-eyed for the next move in the economic chess war between Donald Trump and Beijing.
The Australian dollar was testing two-year lows at 0.7424 to the greenback this morning - which was good news for exporters, notably Australian Bauxite (ABX) and also Quickstep (QHL).
Overseas Market Commentary
The S&P 500 slipped overnight, taking its cue from declines in Europe and Asia as trade standoff tensions between the United States and China continued to weigh on markets.
U.S. Secretary of State Mike Pompeo fanned the trade war flames by referring to China’s appeal for economic openness as a “joke”.
Calling China “the most predatory economic government that operates against the rest of the world today”, Pompeo also referred to China’s “theft” of intellectual property as “an unprecedented level of larceny”.
But energy shares and software stock rose after the Stoxx 600 posted its biggest two-day slump since March and Japan’s Topix registered its largest dip in almost three weeks.
Oil was supported by a smaller than anticipated production sentiment boost for Fridaywhen OPEC meets in Vienna to discuss crude output. West Texas Intermediate rose 1.1% to US$65.8 a barrel.
Elon Musk has taken to Twitter to warn Tesla short sellers that they have about three weeks to cover before losing their money.
The Tesla CEO has been under pressure to deliver profits for the first time in the electric car manufacturers history and has promised to deliver in the third quarter.
Tesla stock rallied 20% early this month and rose 4% last week after the company announced it would lay off 10% of its staff.
In three weeks Tesla will reveal whether it has hit its targeted 5000 a week production rate for the Model3s. Tesla was trading at US$355 on Monday, compared to $375 a year ago.
In Germany Volkswagen shares dipped 3.1% with the carmaker in crisis talks following the arrest of Audi CEO Rupert Stadler as part of the ongoing investigation into emissions-test cheating.
Japan’s benchmark Nikkei 225 dropped 0.8% overnight, its biggest fall in three weeks, and South Korea’s KOSPI shed 1.2%. Markets were closed in Hong Kong for the Duanwu Festival.
In Asia overseas funds have withdrawn from six major emerging equity markets at a rate unseen since the global financial crisis.
According to Bloomberg investors have withdrawn US$19 billion from India, Indonesia, the Philippines, South Korea, Taiwan and Thailand this year.
American money market are now offering 2% yields and with additional Fed hikes forecast, investors have been losing their appetite for riskier markets as global liquidity tightens.
Earlier this month Bloomberg rated Malaysia, the Philippines, Indonesia and China as the best among 21 developing economies. South Africa fared poorest as a result of current account deficiencies and low foreign reserves.
Emerging market currencies fell for a fifth straight day overnight and are now on track for the biggest quarterly decline since September 2015.