Good Morning Fellow Traders,
Lost my entire post. Here I go again.
Great banter in the AM with RAN/running songs and diverse topics. Good to see The Red Devils go marching on with a 2-1 defeat over Arsenal. A late stoppage time goal meant that they have sealed their spot in the top four of the EPL. Great match but I think I will need matchsticks to prop my eyes open later today. Pity that I don't like the taste of coffee.
The Australian share market has closed comfortably higher, following a lift in global sentiment as major financial stocks recovered from early losses to join all other sectors in positive territory.
The benchmark S&P/ASX200 index was 0.72 per cent higher at 5,953.6 points on Friday, while the broader All Ordinaries was 0.66 per cent up at 6,042.9 points.
CMC Markets chief market strategist Michael McCarthy said "Markets were impressed with European Central Bank chief Mario Draghi keeping policy on hold overnight and that has seen both stocks and bonds lifting in concert."
Also, strong
earnings reports from Facebook, Amazon and chipmakers Advanced Micro Devices and Qualcomm in the US had helped dissipate the recent caution among local traders.
"The rally on the Nasdaq has spoken directly to fears about valuations in the US, so we have a much more stable share market environment globally," Mr McCarthy said.
On the ASX, the major lenders that were hammered earlier in the week recovered from morning losses, with only the Commonwealth Bank weaker.
Commonwealth Bank was down 71 cents, or 1.0 per cent, at $71.54.
Westpac ended 17 cents, or 0.6 per cent higher, at $28.30, after recovering slightly from a UBS downgrade that triggered the banking sell-off on Thursday.
ANZ, down 1.7 per cent at lunchtime, rose to finish six cents, or 0.2 per cent, higher at $26.63 and similarly, National Australia Bank fell early but closed higher - up 0.4 per cent to $28.59.
Scandal-struck AMP hit a new low, down a further three cents, or 0.7 per cent, to $4.02 after revelations the wealth manager may have breached the corporations act on 20 occasions and could face criminal charges.
AMP's market value has fallen $2.2 billion since the beginning of the royal commission.
Elsewhere, the healthcare sector led market gains, lifting 2.4 per cent on the back of blood products giant CSL, up $4.74, or 2.8 per cent, to $170.39, and ear implant specialist Cochlear, up $5.28, or 2.8 per cent to $193.11.
A late moderation in global oil prices did not impact local energy producers, Santos was up 0.7 per cent, to $6.24, and Oil Search lifted 0.9 per cent to $7.96.
Among the miners, BHP Billiton and Rio Tinto both rose 0.3 per cent to $31.11 and $79.65, respectively.
Incitec Pivot gained four cents, or 1.1 per cent, to $3.84 after flagging a $236 million impairment hit in its first-half results, offset by a one-off cash benefit from the US tax reforms.
Meanwhile, the Australian dollar has lost further ground to a rallying greenback boosted by better-than-expected jobs data and a steady ECB policy meeting overnight.
At 1630 AEST, the local currency was worth 75.45 US cents, down from 75.72 US cents on Thursday.
ON THE ASX AT 1630 AEST:
* The benchmark S&P/ASX200 was up 42.8 points, or 0.72 per cent, at 5,953.6 points
* The broader All Ordinaries index was up 39.9 points, or 0.66 per cent, at 6,042.9 points
* The SPI200 futures contract was up 48 points, or 0.66 per cent, at 5,942 points.
* National turnover was 3.1 billion securities traded worth $7.8 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 75.47 US cents, from 75.72 on Thursday
* 82.48 Japanese yen, from 82.76 yen
* 62.42 euro cents, from 62.19 euro cents
* 54.21 British pence, from 54.32 pence
* 107.01 NZ cents, from 107.24 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,316.33 per fine ounce, from $US1,324.79 per fine ounce on Thursday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 5.75 per cent May 2021, 2.2205pct, from 2.2489pct on Thursday
* CGS 2.25pct May 2028, 2.8214pct, from 2.8689pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.16 (implying a yield of 2.84pct), from 97.120 (2.880pct) on Thursday
* June 2018 3-year bond futures contract was 97.735 (2.265pct), from 97.710 (2.290pct)
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)
Little movement is expected on the Australian share market at the start of the new trading week with no major influences from overseas.
The local futures market barely changed after Wall Street closed nearly flat following a wobbly day of trading.
Concerns about
inflation and struggling technology and energy stocks were offset by a rally among retailers, led by Amazon.
The Dow Jones fell 11.15 points, or 0.05 per cent, while the S&P 500 gained 0.11 per cent and the Nasdaq up 0.02 per cent.
"With that lead in from Wall Street, and consistent with futures trading in our market, it's certainly pointing to a flat open on Monday," AMP Capital's chief economist Shane Oliver told AAP.
After getting hammered as a result of the banking royal commission last week, Dr Oliver believes there might be some reprieve in sight for the financial sector.
The big four banks recovered from early losses on Friday to join all other sectors in positive territory.
Only the Commonwealth Bank finished weaker, with Westpac, ANZ and NAB all closing higher.
"You could argue a lot of the bad news has been factored in for now."
The Reserve Bank board's meeting on Tuesday and a speech by RBA governor Philip Lowe are tipped to be the highlight of the week.
Dr Oliver suspects they will repeat the message they've consistently given, that the interest rate will go up but there's no urgency for change right now.
"We don't see a move on Tuesday," he said.
CoreLogic's latest house price data will also be watched closely, with economists predicting further falls across Australia's capital cities.
Wall Street closed nearly flat on Friday as inflation worries and struggling technology and energy stocks were offset by an advance in the consumer discretionary sector led by Amazon.
The S&P 500 and the Nasdaq eked out small gains while the Dow Jones Industrial Average edged into negative territory by the end of the session.
All three major U.S. indexes were down for the week at the end of a choppy session, ending two-week winning streaks.
“There’s a ton of cross-currents going on in the market right now and consequently you get trading days like this where the market can’t seem to make up its mind what it wants to do,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
Growth in the U.S. economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years, according to the Commerce Department. But a jump in wages and lower tax rates suggested the setback could be temporary.
The U.S. Treasuries yield curve flattened as the growth data renewed bets that the Federal Reserve would continue hiking benchmark U.S. interest rates to keep inflation in check.
Wages and salaries increased at their fastest pace in 11 years, according to a report from the Labor Department, adding to inflation jitters.
As companies warn of higher costs eroding margins, markets have fluctuated as investors focus on guidance in the face of the strongest quarterly profit growth in seven years.
“You’ve got investors grappling with a new environment of volatility and how to handle that,” said Carlson. “That means a market like we have now, kind of manic-depressive, passive-aggressive.”
The Dow Jones Industrial Average fell 11.15 points, or 0.05 percent, to 24,311.19, the S&P 500 gained 2.97 points, or 0.11 percent, to 2,669.91 and the Nasdaq Composite added 1.12 points, or 0.02 percent, to 7,119.80.
More than half of the S&P 500 companies have reported first-quarter earnings already, 79.4 percent of which have beat consensus estimates. Analysts now expect first-quarter earnings growth of 24.6 percent, more than double expectations at the beginning of the year, according to Thomson Reuters data.
Amazon.com led the S&P 500 and the Nasdaq, helping them close in positive territory as the online retailer’s shares rose 3.6 percent on the heels of a blockbuster earnings report. Brokerage firms have begun to value the company in excess of $1 trillion.
Microsoft was up 1.7 percent as the technology bellwether beat first-quarter expectations and grew its cloud computing services.
Following a profit miss, Exxon Mobil weighed on the S&P 500 and Dow Jones Industrial Average, falling 3.8 percent.
Sprint jumped 8.3 percent following a Reuters report that the wireless carrier and rival T-Mobile were finalizing terms of a merger.
Seven of the 11 major S&P sectors were higher, with the defensive telecom and real estate sectors posting the biggest percentage gains, at 1.75 percent and 1.32 percent respectively.
The Exxon drop pulled the energy index down 1.2 percent, the biggest percentage loser.
Advancing issues outnumbered declining ones on the NYSE by a 1.42-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.
The S&P 500 posted 17 new 52-week highs and seven new lows; the Nasdaq Composite recorded 60 new highs and 57 new lows.
Volume on U.S. exchanges was 6.13 billion shares, compared to the 6.62 billion average over the last 20 trading days.
Source: Netwealth Morning Business Roundup
Munch on some Avocado Toast with Haloumi and Sip on a Banana and Spinach Smoothie.
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Happy trading, play nicely and make informed decisions.
