Good Morning Fellow Traders - Friday again, didn't that come around quickly?
The ASX ended little changed on Thursday, as solid early gains evaporated along with fresh developments around North Korea and Hurricane Irma.
After starting the day solidly higher, the local market pulled back as US futures slipped from the early afternoon, dragging the local bourse down with them. The benchmark S&P/ASX 200 index closed the session 1 point higher at 5690.
The Australian dollar fell from its morning highs of US80.2¢ after the release of retail sales and international trade data that came in below consensus expectations to trade around US79.8¢ late in the session.
Category 5 Hurricane Irma, set to hit South Florida on Sunday, is currently carving a devastating path through the Caribbean and was joined by Hurricanes Jose and Katia on Thursday. The last time there were three active in the Atlantic was seven years ago,and the potential impact from the intensifying storm activity has unnerved investors.
Across the Pacific, four launchers for a US missile shield arrived at a military base in South Korea. Prime Minister, Lee Nak-yon, said that North Korea may launch its next missile on Saturday, the anniversary of its founding.
Safe-haven plays kicked in after Lee's remarks: the yen ticked higher, gold strengthened and US 10-year bond yields moved lower.
"If this becomes less of a Korea story and more of a regional story then you'll find a lot of investors potentially heading for the exit," State Street Global Markets head of Asia Pacific macro strategy Dwyfor Evans told Bloomberg.
Banks traded on an uncertain footing. ANZ traded down 0.2 per cent, but Westpac added 0.2 per cent, NAB 0.1 per cent and CBA 0.4 per cent. Macquarie was once again the hardest hit, declining 1 per cent.
There were a host of names trading ex-dividend on Thursday, which collectively shaved nine points of the benchmark top 200 index. Stock exchange operator ASX lost 2.3 per cent after trading without the right to its latest dividend payout, as did mining giant BHP, which fell 1.4 per cent, and Woolworths, which lost 1.8 per cent.
Telstra helped prop up the ASX, rising 2.8 per cent after an upgrade to outperform at Credit Suisse.
Sigma Healthcare shares zipped along as well, with the stock up 2.9 per cent as it reiterated fiscal-year guidance and revealed a large aquisition.
Among the best performing names on Thursday were resources stocks. Lithium miners Orocobre and Galaxy Resources rose 4.9 per cent and 4.1 per cent, respectively, while mineral sands producer Iluka jumped 4.1 per cent.
In the U.S. Wall Street edged lower on Thursday as media stocks weighed after negative business updates from Walt Disney and Comcast and as another powerful storm neared the United States.
Gains in healthcare stocks helped stem the losses, while strength in Microsoft (MSFT.O), Amazon (AMZN.O) and biotech Gilead (GILD.O) kept the tech-heavy Nasdaq in positive territory.
Comcast (CMCSA.O) dropped 5.9 percent after the cable operator warned of subscriber losses, while Disney shares fell 5.0 percent after the company cautioned about its profit growth. The S&P 500 media index .SPLRCME was down 3.7 percent.
Investors were also tracking Hurricane Irma, which was bearing down on Florida on the heels of devastation in Texas caused by Hurricane Harvey. Irma plowed past the Dominican Republic toward Haiti after devastating a string of Caribbean islands.
With Irma looming, shares of insurers were weaker, with the Dow Jones U.S. Insurance index off 2.1 percent.
“There’s further uncertainty because of Hurricane Irma that is supposed to be hitting Florida. You don’t know what kind of damage it is going to do,” said John Praveen, managing director at Prudential International Investments Advisers in Newark, New Jersey.
Combined with Harvey, in the short term, Praveen said, “maybe it will have a negative impact upon U.S. GDP growth and it might hurt U.S. earnings, and that’s probably why the markets are reacting negatively.”
The Dow Jones Industrial Average .DJI fell 42.72 points, or 0.2 percent, to 21,764.92, the S&P 500 .SPX lost 1.12 points, or 0.05 percent, to 2,464.42 and the Nasdaq Composite .IXIC added 3.38 points, or 0.05 percent, to 6,396.69.
Irma is the latest macro event to keep selling pressure on U.S. equities following concerns earlier this week about geopolitical tensions involving North Korea, which sparked the biggest one-day drop for the S&P 500 in about three weeks.
Still, the benchmark S&P remains near all-time highs, with market watchers pointing to strong earnings growth and solid economic data as helping to support stocks.
Investors were also digesting comments from European Central Bank President Mario Draghi, who said the euro’s strength was already weighing on inflation and will be a key factor for the ECB next month when it decides how to proceed with its massive stimulus program.
General Electric (GE.N) shares sank 3.9 percent, dragging on the S&P and the Dow, after a bearish analyst note.
Apple (AAPL.O) shares also weighed on major indexes, falling 0.4 percent after a report that the company’s new iPhone was hit with production glitches.
Financial shares .SPSY slid 1.9 percent amid a drop in U.S. Treasury yields.
Healthcare .SPXHC was the best-performing sector, rising 1.2 percent. AbbVie (ABBV.N) shares surged 6.3 percent and Bristol-Myers Squibb gained 5.6 after the drugmakers separately reported positive clinical updates on their respective medicines.
Eli Lilly (LLY.N) shares rose 1.9 percent after the drugmaker said it would lay off about 8 percent of its employees.
Advancing issues outnumbered declining ones on the NYSE by a 1.01-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored decliners.
Source: Netwealth Morning Business Roundup
For breakfast today, we're going to Sesame Street.
