Market Opener – 08 Nov 2018
Local Markets Commentary
The Australian market opens with an overnight US equities relief rally, and the US president launching a varied series of post-elections comments, ahead of influential data out of China today and a US Federal Reserve post-policy meeting statement tonight.
The US mid-term elections delivered a swing to a Democrat majority in the House of Representatives, but an increased Republican Senate majority.
China’s October trade balance statistics are scheduled for release 2pm AEDT.
Since yesterday’s ASX trade, China has reported a $US33.93B fall in October foreign exchange reserves to $US3.05 trillion, following a $US22.69B September decline.
In overnight commodities trade, oil extended Tuesday’s falls, but Brent crude just slightly.
US (December) gold futures settled a little higher
Iron ore (China port 62% Fe) headed lower.
LME copper settled almost flat. Nickel was supported to a modest further gain. Aluminium rallied.
The $A appeared to mark time after appreciating beyond US72.80c early yesterday evening.
Locally today, BHP is hosting an AGM.
API and NAB trade ex-dividend. Please see pp2-5 for detailed lists.
This morning, New Zealand’s reserve bank has kept the official cash rate at 1.75%, indicating a status quo through 2019.
Overseas Market Commentary
US equities markets opened in rally mode overnight and continued to session-high settlements.
Strong opening gains were also recorded by major European indices, but lacklustre data produced vacillations which constrained closing figures.
US mid-term elections produced a predicted swing to a Democrat majority in the House of Representatives, but an increased Republican Senate majority.
Post-European trade, the US attorney-general resigned, ‘at the president’s request’, prompting speculation the move was pushed back weeks earlier until the conclusion of the US elections.
In addition, the planned meeting between the US Secretary of State and North Korean officials tonight in New York was reported to have been cancelled.
In US data releases, September consumer credit rose by $US10.9B, following a $US22.9B jump in August.
Weekly mortgage applications fell 4% to an almost four-year low, after falling 2.5% the previous week, with some rates quoted at eight-year peaks.
In the euro zone, September retail sales were reported stagnant, pushing year-on-year growth to 0.8% from 2.2% in August.
August sales were revised from a 0.2% fall to a 0.3% rise.
Germany’s September industrial production was reported 0.2% higher for the month, following a 0.1% rise in August - revised from a 0.3% fall.
Year-on-year, industrial output growth came in at 0.8%.
An October construction PMI fell 0.4 to 49.8, the first contraction reading since March.
Tonight in the US, the Federal Reserve will conclude a policy meeting an announce outcomes ~6am AEDT tomorrow morning.
Among data releases, weekly new unemployment claims are due.
Companies scheduled to reveal earnings or provide updates later today or tonight include: Activision Blizzard, AstraZeneca, Bridgestone, Burberry, Commerzbank, Hapag-Lloyd, Lenovo, US retailer Macy’s, UK supermarket chain (J) Sainsbury, Siemens and Walt Disney.
BP trades ex-dividend on the FTSE 100.
In overnight corporate news, Kraft Heinz revealed plans to offload a cheese business in Canada to Italy’s Parmalat, for $US1.2B.
Qualcomm has reported post-US trade, and could influence some tech sector sentiment tonight.