Good Morning Fellow Traders,
Thanks @Ravgnome. For a short week, it sure seems like it's lasted a long time. Am I correct in thinking that @Oscar09 and @highlandlad will be back next week? Perhaps we can resume multiple threads. Maybe we can lure @Quantum Torus to open up the Lounge as well?
The ASX has surged ahead with gains across all the major sectors, while the Aussie dollar has mostly rebounded from a flash crash that hit many major currencies.
The benchmark S&P/ASX200 index closed up 75.6 points, or 1.36 per cent, to 5,633.4 at 1615 AEDT on Thursday, led by energy stocks on the backs of higher oil prices.
The broader All Ordinaries was up 69 points, or 1.23 per cent to 5,694.6.
"Generally it's a pretty good day. A much improved session, that's for sure, compared to yesterday's performance," said James Tao, a market analyst with Commsec in Sydney.
On Wednesday the ASX200 dropped 88.6 points, or 1.57 per cent.
The flash crash in the currency market just after 0930 AEDT on Thursday attracted much of the attention.
The Aussie crashed 6 per cent against the Japanese yen, 3 per cent against the greenback and 2.9 per cent against the pound in just seven minutes, hitting 10-year lows against the yen and the dollar.
Then it made up about half of those losses in another five minutes.
"It was pretty big moves there," Tao said.
Chris Weston, head of research at Pepperstone Group in Melbourne, called the swings "absolutely nuts".
All the major currencies showed similar movement against the yen during that time.
The crash was blamed in part on algorithmic trading during an illiquid market. Japanese traders were on holiday, while the United States market had closed for the day.
About an hour before the crash, Apple Inc had shocked investors by warning that its earnings for the quarter wouldn't meet expectations because of weak sales in China.
The Aussie had recovered most of its losses by the afternoon but at 69.42 US cents was at its lowest level in three years.
In the share market, energy stocks were up 2.97 per cent, financials up 1.75 per cent and telecoms up 2.32 per cent.
Shares in Healius, formerly Primary Health Care, surged 7.79 per cent, to $2.63, after the Sydney medical centre and pathology group said it had received a $2.02 billion takeover offer from a Hong Kong company.
The big banks were up from between 1.23 and 2.29 per cent, led by Westpac, which gained 56 cents to close at $25.04.
Among energy stocks, Woodside Petroleum gained 3.44 per cent, to $31.54, while Santos was up 3.94 per cent, to $5.49, after US oil prices gained 2 per cent, to $US46.33 a barrel.
It wasn't such a good day for dual-listed Kathmandu, which plunged 14.12 per cent, to $2.25, after warning of poor sales during the holiday period.
Other retailers fell as well - JB Hi-Fi was down 4.26 per cent to $20.68; Super Retail Group, which owns Rays, Rebel Sport and Supercheap Auto, fell 5.42 per cent to $6.46; and fast fashion retailer Lovisa Holdings dropped 8.2 per cent, to $5.71.
Telstra gained 2.89 per cent, to $2.85.
ON THE ASX:
* The benchmark S&P/ASX200 index was up 75.6 points, or 1.36 per cent to 5633.4
* The All Ordinaries was up 69 points, or 1.23 per cent, to 5694.6.
* At 1415 AEDT, the SPI200 futures index was down 2 points, or 0.04 per cent, at 5575.
CURRENCY SNAPSHOT AT 1415 AEDT:
One Australian dollar buys:
* 69.42 US cents, from 69.85 on Wednesday
* 74.32 Japanese yen, from 76.08
* 61.08 euro cents, from 61.58
* 55.33 British pence, unchanged from 55.39
* 1.0473 NZ cents, from 1.05
GOLD:
The spot price of gold in Sydney at 1415 AEDT was $US1,288.56 per fine ounce, from $US1,283.86 on Wednesday.
Wall Street has sunk 2 per cent as weak US factory data and the fallout of a rare sales warning from Apple fanned fears of slowing growth and spurred the latest leg of a selloff that has sent indexes to their lowest since mid-2017.
Apple's shares have slumped 9.2 per cent after the company slashed its holiday-quarter revenue forecast, saying sales in China slowed more than expected, the first major warning with the US earnings season around the corner.
Meanwhile, Institute of Supply Management data showed US manufacturing activity slowed more than expected in December, with the index of national factory activity dropping to 54.1 last month and missing economists' estimate of 57.9.
That comes after data earlier this week showed a deceleration in factory activity in China and the eurozone, indicating the ongoing US-China trade dispute was taking a toll on global manufacturing.
"We are seeing markets extrapolate Apple's news throughout several sectors and equate it to a deceleration in the global economy," said Christopher Anselmo, director at Nasdaq IR Intelligence in New York City.
"A lot of data in the past few days, including US factory activity, is pointing to a global economic slowdown. The data is just giving a magnitude of how broad this slowdown is and which regions it is affecting the most."
Ten of the 11 major S&P sectors fell on Thursday, led by the technology index's 4.16 per cent slide.
Within tech, chipmakers, which count both Apple and China as major customers, were hit the hardest.
The Philadelphia Semiconductor index slumped 4.36 per cent.
The trade-sensitive industrials dropped 2.75 per cent, while materials fell 2.39 per cent and three other sectors were logging declines of roughly 2 per cent.
At 11.01am local time, the Dow Jones Industrial Average was down 569.72 points, or 2.44 per cent, at 22,776.52, the S&P 500 was down 49.31 points, or 1.96 per cent, at 2460.72 and the Nasdaq Composite was down 148.41 points, or 2.23 per cent, at 6517.53.
The grim reading rocked financial markets, sending investors to the relative safety of government Treasuries and bond-proxies stock sectors.
Even among them only real estate gained, while utilities and consumer staples nursed slight losses.
While the recent selloff has made stocks cheaper, with the S&P 500's valuation falling to 14 times expected earnings from 18 times a year earlier, earnings estimates have also been cut sharply.
Analysts on average expect earnings per share at S&P 500 companies to rise nearly 7 per cent this year, down from a 10 per cent forecast at the start of October and far below their expectations of 24 per cent EPS growth for 2018, according to Refinitiv's IBES.
"As we head towards the earnings season, investors are getting more and more concerned about how the global economic slowdown and the trade war are impacting US companies," Anselmo said.
Among the few bright spots was Celgene Corp, which surged 25.8 per cent after Bristol-Myers offered to buy the drugmaker for about $US74 billion in cash and stock. Bristol-Myers fell 12.5 per cent.
Earlier the market got a short-lived boost from an ADP National Employment Report that showed US private sector jobs rose far more than expected in December.
The more comprehensive nonfarm payroll report on Friday will give a clearer picture of labour market strength.
Declining issues outnumbered advancers for a 2.14-to-1 ratio on the NYSE and a 2.54-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 12 new lows, while the Nasdaq recorded one new high and 28 new lows.
Source: 9Finance
Friday brekkie is an Omelette this morning. Filled with lots of good stuff. And a Coffee for you caffeine addicts.
In consideration of others, PLEASE include the STOCK CODE in all your posts.
Happy trading, play nicely and make informed decisions.
