Good morning. Thank you to @ttward & @Ravgnome and the AM loungers.
That annoying uncle that you forgot you had is back, and it's time to talk about... Brexit. The rest of the world collectively goes "huh?" as we try to wrap our heads around exactly what it all means again, and wonder why we can't have international crises limited to one at a time. You can read more about the potentials options here, but go down that rabbit hole at your own risk, you may not return.
Looking ahead at Brexit and how it may unfold:
- Monday - Day four of MPs' Brexit debate, with the PM set to make a statement to the Commons setting out reassurances from the EU over the Irish backstop
- Tuesday - Day five of debate followed by "meaningful vote" on the PM's deal. MPs will also get to vote on amendments that could reshape the deal. If the deal is rejected Theresa May will get three working days to come up with a "plan B"(3 days to build a plan B, yeah I'm sure that'll work out fine).
- Wednesday - Mrs May is likely to head to Brussels to try to get further concessions from the EU
- Monday 21 January - Expected Commons vote on "Plan B"
The UK will leave the EU on Friday, 29 March, unless MPs vote to delay or cancel Brexit.
Disappointing Chinese trade data has given Australia's mining and energy sectors a whack and kept the broader market flat after what promised to be a positive start to the week.
The benchmark S&P/ASX200 index closed 1.2 points, or 0.02 per cent, lower at 5,773.4 at 1630 AEDT on Monday as early gains on US-China trade hopes evaporated.
The broader All Ordinaries was down 1.6 points, or 0.03 per cent, at 5,833.2.
The energy sector proved the biggest drag thanks to subdued oil prices, while the big miners also turned negative late in the day on news China's trade surplus had dropped 16.2 per cent from the year before, marking the country's lowest surplus since 2013.
Bell Direct equities analyst Julia Lee said the data's impact on local mining and energy shares was to be expected, given Australia's dependence on China for growth.
"The important thing we were watching for was those China numbers coming in, and unfortunately they were quite disappointing," she said.
"Perceptions of slowing global growth have been having an impact on the economy and market, and I'd say the larger question for investors in 2019 is whether it will keep rolling over and how serious it is going to be."
The big miners finished the day in the red, with BHP dropping 0.24 per cent to $32.71 and Rio Tinto down 0.31 per cent to $79.40. South32 was flat at $3.40, while Bluescope Steel plunged 5.17 per cent to $11.55 and Fortescue Metals dipped 1.31 per cent to $4.52.
Gold miners Newcrest retreated after earlier gains, down 0.17 per cent to $23.75, with Northern Star and Evolution eking out rises of 0.43 and 0.53 per cent respectively.
The energy sector stayed down after oil prices fell two per cent in offshore trade on Friday, ending a nine-day rally. Shares in Santos fell 0.17 per cent to $5.83, Woodside Petroleum dropped 0.54 per cent to $33.08, and Oil Search shed 0.79 per cent to $7.55. Origin Energy was down 1.14 per cent to $6.91, Beach Energy was flat at $1.565, and Soul Pattinson dropped 0.42 per cent to $26.05. Caltex shares were 0.38 per cent lower at $26.51, with coal miners Yancoal and Whitehaven dropping 5.44 and 3.59 per cent respectively.
Wesfarmers shares also pulled the bourse lower, with the retail giant dropping 2.16 per cent, or 69 cents, to $31.26 after announcing a disappointing Christmas period for Kmart. Coles supermarket rose 3.12 per cent to $11.89, regaining ground after two sessions in the red, with Costa Group Holdings also rebounding 4.35 per cent to $4.85 after suffering a near 40 per cent loss on Friday on weaker demand for fruit and veg. Dongfang Modern Ag climbed 2.0 per cent to $1.02 on a record harvest.
Seven West Media rose 4.72 per cent to 55.5 cents and Nine Entertainment shares jumped 4.59 per cent to $1.48 in a solid session for telcos.
Property advertiser REA Group rose 2.13 per cent to $73.73 and Hutchison climbed 9.09 per cent to 12 cents.
ANZ was the best performer of the big banks, up 0.53 per cent to $25.37, followed by Westpac and NAB.
The Aussie dollar has eased to 71.85 US cents, after topping out at a three-week peak of 72.35 US cents on Friday.
ON THE ASX:
* The benchmark S&P/ASX200 index was down 1.3 points, or 0.02 per cent, to 5,773.4
* The All Ordinaries was down 1.6 points, or 0.03 per cent, to 5,833.2
* At 1630 AEDT, the SPI200 futures index was down 12 points, or 0.21 per cent, at 5,716.0
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 71.86 US cents, from 72.16 on Friday
* 77.69 Japanese yen, from 78.17
* 62.61 euro cents, from 62.60
* 55.95 British pence, from 56.53
* 105.59 NZ cents, from 105.77
GOLD:
The spot price of gold in Sydney at 1630 AEDT was $US1,291.04 per fine ounce, from $US1292.62 on Thursday.
China’s export and import figures were much worse than expected in December, underscoring the rapid weakening of the Chinese economy.
Monday’s figures suggest the negative impact of the trade war may be greater than Chinese authorities previously estimated, and point to the need for a more rapid and larger economic stimulus to stabilise growth.
Total exports fell to US$221.25 billion in December, down 1.4 per cent from November, and 4.4 per cent from the same month in 2017, according to data from China’s General Administration of Customs.
The December figures give the first indication of the full impact of the US-China trade war.
Exports in previous months were supported by “front loading” of orders by Chinese producers to beat the planned rise in US tariffs to 25 per cent, scheduled to go into effect on January 1 before Chinese President Xi Jinping and his US counterpart Donald Trump agreed to a 90-day tariff ceasefire in their meeting on December 1.
Total imports fell to US$164.19 billion, a fall of 10 per cent from last month and down 7.6 per cent a year earlier.
Although, if there is a flipside to the data, it adds further impetus the strike out a deal:
The numbers show how the world’s biggest trading nation is being hit by a confluence of slowing global growth and by uncertainty linked to the trade war -- factors that are expected to linger in the near term, at least.“The bad trade data will quite likely increase the pressure on China to achieve a deal, or at least a suspension of the U.S. tariff hikes,” said Louis Kuijs, chief Asia economist at Oxford Economics in Hong Kong. “At the same time, the U.S. side also seems to be under more pressure to de-escalate tension in terms of news on the economy and financial markets than a few months ago.”
Conservative Australian shoppers started to wind down their use of cash and credit in the run-up to the key Christmas shopping period, new figures show amid suggestions this year could see record numbers give up their credit cards for good. Figures from the Reserve Bank released on Monday showed the number of withdrawals out of the nation's network of ATMs at their lowest level for a November since 2001. Read more
Afterpay has fired back at its competitors amid an escalating dispute with the big banks over looming regulations on the "buy now, pay later" industry. The sector has boomed on the back of falling credit card use, banks tightening up their lending in the wake of the royal commission and the proliferation of "buy now, pay later" platforms across thousands of retail stores, including David Jones, Officeworks and Country Road.
Read more
China’s surprisingly weak trade data brought a four-day rally in European shares to a halt on Monday, with luxury goods and technology stocks leading the drop as investors fretted about slowing global growth and weaker-than-expected earnings.
The pan-European STOXX 600 ended down 0.5 percent, reversing some of last week’s gains that saw the index hit a one-month high. The market notched up four straight days of gains, its longest winning streak since November.
Germany's DAX and France's CAC 40 fell 0.3 and 0.4 percent respectively. Ahead of Tuesday's crunch UK parliamentary vote on Brexit, London's FTSE 100 declined 0.9 percent.
Luxury goods firms, which rely on appetite for handbags and jewelry from China’s burgeoning middle class, bore the brunt of the selling.
Technology shares pulled Wall Street lower on Monday, after an unexpected drop in China’s exports in December reignited worries of a slowdown in global economic growth.
At 12:51 p.m. ET, the Dow Jones Industrial Average .DJI was down 73.01 points, or 0.30 percent, at 23,922.94, the S&P 500 .SPX was down 11.65 points, or 0.45 percent, at 2,584.61 and the Nasdaq Composite .IXIC was down 45.61 points, or 0.65 percent, at 6,925.87.
Adding to the downbeat mood was a partial government shutdown, which entered its 24th day, making it the longest shuttering of federal agencies in U.S. history.
Analysts expect S&P 500 companies to post a 14.3 percent growth in fourth-quarter earnings, much lower than the 25 percent growth rate registered in the first three quarters of 2018, according to IBES data from Refinitiv.
Out of respect for your fellow posters, please add the stock code to your posts (or OT for non -stock related content).
Come and grab a scone before they close the border.
Day Trading Pre-market Open - 15 Jan 2019
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