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Market Opener - 11 Aug 2017

Local Markets Commentary

The Australian market commences Friday trade amid ongoing international security concerns, following drops for major equities indices overnight, and on mixed commodities leads.

In overnight commodities trade, gold continued higher. Oil settled lower. LME copper also declined. Iron ore rallied beyond $US76.5/t.

The $A fell to ~US78.65c after trading at ~US78.80c early yesterday evening.

Locally today, Reserve Bank of Australia (RBA) governor Philip Lowe meets with the Australian parliament’s House of Representatives standing committee on economics, commencing 9.30am AEST.

The ABS is due to report July lending finance 11.30am.

SCG, TAH and WFD are among stocks scheduled to trade ex-dividend today.

Overseas Market Commentary

Major European and US equities markets mostly fell on opening overnight and never looked like recovering.

Earlier, North Korea had intensified its anti-US rhetoric while following up threats of a Guam missile strike with a timeline, namely anytime from mid-August. In response, the US president hinted at needing to use stronger deterrent speech.

Japan, for its part, vowed to destroy any missiles launched over its territory towards Guam.

Among a swag of UK data releases, the national trade deficit grew to £12.72B from £11.3B.

June industrial production rose 0.3% after pulling back 0.2% in May.

Construction output improved 0.9% after an initially estimated 0.3% decline for May was revised to a 0.5% increase.

An influential house price index rose just one point against expectations of a seven-point gain, representing the slowest monthly rise since 2013.

In the US, July producer prices came in 0.1% lower, following forecasts of a 0.1% increase.

Weekly new unemployment claims rose by 3000, but the four-week moving average fell 1000.

The July deficit was reported at $US42.9B following expectations of $US52.0B, but calendar differences were cited as a major factor.

Tonight in the US, a July CPI reading will spark further Federal Reserve speculation.

Across the Atlantic, a final July CPI is due for Germany.

Companies scheduled to report earnings today and tonight include JC Penney, Old Mutual and Singapore Telecommunications (has reported pre-ASX trade, including for Optus).

In overnight corporate news, US retailer Macy’s was pushed ~10% lower on a full-year outlook that undershot expectations, following better-than-forecast sales and profit during the June quarter.

Fellow national retailer Kohl’s also exceeded quarterly expectations, but tumbled ~6%.

For both retailers, a continued fall in sales, again appeared to prove the main concern.

Glencore’s results benefited from a general improvement in commodity prices.

Snap reported a $US443M quarterly loss, in part from slowing user growth.

11/08/2017 7:53:40 AM

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