Good morning traders. Thanks @ttward, @Ravgnome & the aftermarket loungers. A bit of a bounce overnight in the US markets, but everything is still looking in rather poor shape at a glance.
ASX Market Report
The Australian share market plummeted after renewed concerns about US-Chinese trade tensions led to large losses on Wall Street overnight.
The benchmark S&P/ASX200 index was down 57.7 points, or 0.92 per cent, to 6,239.9 points at 1615 AEST on Tuesday, while the broader All Ordinaries was down 54.1 points, or 0.85 per cent, to 6,327.2.
"No surprises, it's been a pretty gloomy day, continuing some of the worst losses we've seen in 2019 for the States," said CommSec market analyst James Tao. There were losses across the world after the Chinese government announced overnight it would impose higher tariffs on a range of US goods in a tit-for-tat retaliation to US levies on China. The two sides were still talking, however, and US President Donald Trump told reporters they would know "in three or four weeks" if the talks were successful.
Financial shares were the worst hit on the ASX, collectively falling 1.78 per cent, as all four big banks slipped and NAB traded ex-dividend. NAB was down 4.68 per cent to $24.24, Commonwealth was down 1.27 per cent to $72.57, ANZ was down 1.25 per cent to $26.10 and Westpac was down 0.81 per cent to $26.90.
The energy, technology and industrial sectors were all down more than one per cent.
The miner sector was a bright spot, collectively up 0.24 per cent. Fortescue Metals propelled the sector, surging 7.44 per cent to $8.09, a four-week high, after the miner declared an extra dividend to share profit from the high price of iron ore. Gold miners also surged as investors sought a defensive refuge, with Northern Star up 4.3 per cent, Evolution Mining up 7.21 per cent and Newcrest Mining up 1.76 per cent.
Industry heavyweight BHP was down 1.11 per cent to $36.52, however.
Mayne Pharma shares crashed 15.04 per cent to 56.5 cents - a four-year low - after the South Australia pharmaceutical company said its revenue and profit was down following competition for its key generic drugs. Invocare shares rose 4.18 per cent to $15.22 after the funeral home, cemetery and crematoria company said its earnings for the quarter ended March 31 was up nine per cent.
Infratil shares dipped 2.99 per cent to $4.22 after the New Zealand infrastructure investment company said it was teaming with Canada's Brookfield Asset Management to buy Vodafone New Zealand from its UK parent company for $NZ3.4 billion ($A3.2b).
Ruralco was down 0.90 per cent to $4.39 after the agribusiness company reported its first-half profit fell 3.7 per cent.
Automotive Holdings was down 1.68 per cent to $2.34 after downgrading its profit guidance. Downer was down 1.13 per cent after the engineering firm said it had won a $220 million contract with Chorus Limited to build and maintain network infrastructure for New Zealand's largest telecommunications company.
In cryptocurrency, the price of bitcoin surged over $US8,000 for the first time since July.
The Aussie dollar is buying 69.52 US cents, from 69.75 US cents on Monday.
Looking to the future, Mr Tao said traders would be watching Australian wage data set to be released on Wednesday and jobs data to be released on Thursday for a hint as to whether the Reserve Bank would cut interest rates. If 20,000 jobs are created and unemployment holds steady at five per cent, the RBA would be inclined to keep interest rates steady, but weakness in the labour market would put pressure on the RBA to cut rates. "The next couple of days will be very interesting on the economic calendar," Mr Tao said.
ON THE ASX
* The benchmark S&P/ASX200 index was down 57.7 points, or 0.92 per cent, to 6,239.9 points at 1630 AEST on Tuesday.
* The All Ordinaries was down 54.1 points, or 0.85 per cent, to 6,327.2.
* At 1630 AEST, the SPI200 futures index was down 71 points, or 1.13 per cent, at 6,226.0.
CURRENCY SNAPSHOT AT 1630 AEST:
One Australian dollar buys:
* 69.76 US cents, from 69.94 US cents on Friday
* 76.53 Japanese yen, from 76.79 yen
* 62.10 euro cents, from 62.34 euro cents
* 53.60 British pence, from 53.80 pence
* 106.00 NZ cents, from 106.12 cents
Global Markets Report
U.S. and European stocks regained ground on Tuesday after President Donald Trump downplayed the U.S.-China trade war as “a little squabble” a day after a spike in tensions between the world’s two largest economies rattled financial markets.
Fears that the United States and China were spiraling into a fiercer, more protracted trade dispute that could derail the global economy have shaken investors in the past week. On Monday, MSCI’s gauge of stocks across the globe posted its biggest one-day decline in over five months and touched a two-month low. The MSCI index gained 0.49% on Tuesday.
Trump insisted trade talks with China had not collapsed, while China’s Foreign Ministry spokesman said the two sides had agreed to continue pursuing relevant discussions. This followed Washington’s decision last week to hike its levies on $200 billion of Chinese imports to 25% from 10%. On Wall Street, technology stocks led the rebound but major indexes finished below their session highs. The Dow Jones Industrial Average rose 207.06 points, or 0.82%, to 25,532.05, the S&P 500 gained 22.54 points, or 0.80%, to 2,834.41 and the Nasdaq Composite added 87.47 points, or 1.14%, to 7,734.49.
“It’s a nice bounce-back certainly after yesterday for sure,” said Gary Bradshaw, portfolio manager of Hodges Capital Management in Dallas. “It seems like President Trump has been more jovial and more upbeat in making comments that hopefully will get this trade situation squared away. I think that’s got investors buying the dip.”
The pan-European STOXX 600 index rose 1.01%.
The U.S. benchmark S&P 500 recorded its biggest one-day loss since Jan 3 on Monday, after China struck back in the trade dispute by saying it would impose higher tariffs on a range of U.S. goods. “It’s likely that it will take markets a day or two to adjust to this increased rhetoric around trade, because markets up until a week ago thought that trade had been put to bed,” said Carol Schleif, deputy chief investment officer with Abbot Downing in Minneapolis. In another sign trade tensions are hurting the economic outlook, Germany’s ZEW institute said investors’ mood had deteriorated unexpectedly in May.
In currencies, the dollar index, which measures the greenback against a basket of currencies, rose 0.2%, with the euro down 0.15% to $1.1206. The euro slid after Italy’s deputy prime minister said the country was ready to break European Union budget rules if necessary to spur employment. Italian government bond yields rose sharply.
Benchmark U.S. 10-year Treasury notes last fell 3/32 in price to yield 2.4139%, from 2.405% late on Monday.
Oil prices climbed after top exporter Saudi Arabia said explosives-laden drones launched by a Yemeni armed movement aligned to Iran had attacked facilities belonging to state oil company Aramco. U.S. crude settled up 1.2% at $61.78 a barrel, while Brent settled at $71.24, up 1.4%.
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