28 July 2017 Day Trading Pre Market

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    Good morning folks. We're nearly there - another week draws to an end.

    The local market tried hard to join a global rally on Thursday, but the ASX's gains were kept in check by a surprise surge in the Australian dollar.
    The benchmark S&P/ASX 200 index attempted twice to break the 5800-point barrier, only to be knocked back both times, closing just 0.15 per cent higher at 5785.0 points.

    Major US indices had scaled record peaks Wednesday night, after the US Federal Reserve maintained its benchmark lending rate and said it was continuing its slow path of monetary tightening.
    But the Fed's obvious reluctance to hike rates and its worries about slowing inflation sparked another selloff in the US dollar, which took the Australian dollar to a fresh two-year high of US80.66¢.
    Consequently, shares of companies with strong overseas earnings were among the biggest losers of the day. CSL dropped 0.9 per cent, Cochlear lost 1.5 per cent and James Hardie slipped 0.8 per cent.

    Miners, however, profited from a surge in commodity prices. Iron ore jumped back above $US70 a tonne, taking its gains since mid-June to more than 30 per cent, copper is trading at two-year highs and oil established itself above $US50 a barrel.
    BHP Billiton rose 1.1 per cent, its third successive session of gains, while Rio Tinto added 0.6 per cent.
    Shares in Fortescue fell 1.1 per cent after the Pilbara miner posted full-year shipments in line with guidance and flagged a further fall in cash costs.
    Also delivering an update, Macquarie rose 1.2 per cent after forecasting a 2017-18 result in line with its record 2016-17 profit.
    A2Milk was the top performer in the ASX 200, soaring 7.4 per cent to extend a remarkable rally this week. Apart from Macquarie saying on Tuesday it initiated coverage of the stock with an 'outperform' rating, there hasn't been any news around to justify the rally.
    Ahead of the start of earnings season next week, Deutsche Bank strategist Tim Baker predicted full-year profits to grow by just under 15 per cent.
    Noting "the peak in earnings growth is passing", Mr Baker predicted earnings to grow just 8 per cent in full-year 2018.
    "Commodity prices pose some upside risk to earnings, but outside that we'd expect the usual mild downgrades as the year progresses," he said.
    Deutsche also expects a soft tone around consumer-exposed companies, noting that retail sales have been weak.

    Dovish Fed
    Minor tweaks to the US Fed's monthly meeting statement convinced investors the central bank's tightening timetable is even more benign, lifting sentiment. The trimming of its $US4.5 trillion balance sheet is now expected "relatively soon" rather than "this year", and inflation has now "declined" rather than being "somewhat lower". The Fed's caution combined with strong US quarterly earnings to push major US share indices to their next round of record highs, while bond yields fell and the US dollar plunged to a 13-month low against a basket of currencies.
    Aussie rocket
    One of the main beneficiaries of the US dollar's collapse has been the Aussie dollar, which shot above US80¢ following the Fed's statement, finding a fresh two-year high at US80.66¢. The rapid rise in the currency, which has gained more than 5 per cent in the past two weeks and is up 11 per cent in 2017, has sparked some worries that current levels aren't backed by fundamentals, making it expensive and prone for a selloff. But traders said that with US dollar bears firmly in control, the Aussie might be able to push even higher.
    Gold rising
    Gold stocks were also among the winners after the precious metal hit a six-week high of $US1265 an ounce, buoyed by the crumbling US dollar. The decline in the greenback is a boon for dollar-denominated gold since it makes buying the metal less expensive for investors paying in other currencies. "We think that gold has turned something of a corner and may now be in a position to retest its recent highs," said INTL FCStone analyst Edward Meir. The All Ords gold index is up 1.3 per cent, its third session of solid gains this week.
    Oil highs
    Oil prices sat just below eight-week highs at $US50.94 a barrel, buoyed by hopes that a steeper-than-expected decline in US crude oil inventories will reduce global oversupply. US crude stocks fell sharply last week as refineries increased output and imports declined, while several US shale producers signalled plans to cut spending. But analysts said oil prices may have little room to head higher as recent gains could encourage more output, particularly from US shale producers with low costs.

    A swoon in technology and transportation shares led the S&P 500 slightly lower on Thursday on a day full of corporate earnings reports, but the Dow industrials set a record closing high, helped by a jump in Verizon.
    The Dow Jones Transport Average .DJT, often looked at as a gauge of the economy's health, closed down 3.1 percent, dragged lower after a worrisome outlook from package delivery company United Parcel Service (UPS.N).
    The transports fell to their lowest point in nearly two months as UPS rival FedEx (FDX.N) also declined.
    The S&P 500 technology sector .SPLRCT was the worst performing major group, falling 0.8 percent even as Facebook (FB.O) shares gained 2.9 percent after the social media company's results.
    Tech has been the best-performing sector this year, leading the S&P 500's 10.6 percent run in 2017.
    After the bell, Amazon.com (AMZN.O) shares fell 2.7 percent after the e-commerce company's results. Amazon is the last of the high-flying companies known as "FANG" stocks to report this quarter.
    Wall Street's main stock indexes had tallied intraday record highs earlier in the session.
    "The general sentiment of the market coming into the day was that transportation stocks are telling us something that we're not paying attention to," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
    "You've got a general feeling a lot of good news is priced in to this market," Hogan said. "That holds with technology. The problem with momentum stocks, once they start heading in a direction they get there violently, and that's what we're seeing today."
    The Dow Jones Industrial Average .DJI rose 85.54 points, or 0.39 percent, to 21,796.55, the S&P 500 .SPX lost 2.41 points, or 0.10 percent, to 2,475.42 and the Nasdaq Composite .IXIC dropped 40.56 points, or 0.63 percent, to 6,382.19.
    "The overall weakness in technology to me is a little bit of a surprise. We have seen some decent reports," said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois. "There could be just a little bit of profit-taking going on here as we move near the end of the month."


    About 7.7 billion shares changed hands in U.S. exchanges, well above the 6.1 billion daily average over the last 20 sessions.

    Source:- Netwealth Morning Business Roundup

    It's World Milk Chocolate Day and as a special end of week treat, breakfast today has a chocolate theme.

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    Let's end this week with a bang!!
 
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