Day Trading Pre-market Open - 17 Jan 2019

Good morning. Thanks @ttward @Ravgnome & AM loungers. Hope @Cleo's move has gone off without much trouble, don't know about you folks but moving houses has always been a rather stressful event, doesn't matter how many times you do it.

Again the UK grabbing the early morning headlines, this time Theresa May her government surviving the no confidence vote, 325 to 306. Also we have now reached day 26 of the government shutdown in the US.

Australian shares have largely avoided fresh Brexit vote drama to close the day higher, though mining shares weighed on the local market.

The benchmark S&P/ASX200 index was up 20.6 points, or 0.35 per cent, to 5,835.2 at 1615 AEDT on Wednesday, with the gains for the financial sector offset by falls in the large mining stocks.

The broader All Ordinaries was 21.9 points, or 0.37 per cent, higher at 5,893.7.

Wall Street closed higher after Chinese authorities indicated they will launch an economic stimulus package to help it through its current rough patch, but those gains were handed back after British MPs rejected Theresa May's Brexit deal by 432 votes to 202, adding more uncertainty about the UK's exit from the European Union.

CMC chief market strategist Michael McCarthy said the turmoil had no real influence here in Australia.

"I think the markets were very well aware of it, and anyone looking for a poor result on the vote would have been handed a loss," he said.

"If there is a fractious break up in the future we could see it hurt global growth but for now there was little impact."

The Australian market's best performers on Wednesday were the info techs, followed by telcos and consumer staples, while the big miners weighed on the market.

Mr McCarthy said resources stocks appeared to have already squeezed the juice out of yesterday's positive Chinese stimulus news.

"(Miners) had a good run yesterday here because we had time to react to the positive Chinese data," he said.

"Elsewhere you saw (stocks) rise overnight but that positive impulse we already absorbed yesterday and obviously hasn't carried through."

BHP shares were down 0.39 per cent to $32.93, and Rio Tinto dropped 0.45 per cent to $79.64.

South32 was 2.06 per cent lower at $3.33, Fortescue Metals also slipped 1.76 per cent to $4.47 and Bluescope Steel was 0.75 per cent lower at $11.88.

Gold miners Newcrest, Northern Star and Evolution each suffered percentage-plus losses on subdued precious metal prices.

Language tech company Appen Limited jumped 4.42 per cent to $14.88, with Wisetech Global climbing by 3.46 per cent to $19.74 to continue the tech sector's strong start to 2019.

Afterpay Touch rose 2.58 per cent to $13.92, while Altium was up 1.07 per cent to $23.66.

For the financials, Insurer QBE rose 1.78 per cent to $10.84, IAG was up 0.98 per cent to $7.18, Medibank Private was 2.32 per cent higher to $2.65, and Suncorp was up 2.2 per cent to $12.55.

The big banks edged higher, with Macquarie Group up 0.89 per cent to $116.00, outpacing NAB, Westpac, ANZ and Commonwealth Bank.

Most listed retailers had a positive day, with a 2.17 per cent rise to $6.59 for Lovisa Holdings, while Rebel Sport owner Super Retail Group was up 2.0 per cent to $6.63, Smiggle parent Premier Investments climbed 2.56 per cent to $14.40, and Wesfarmers was up 0.65 per cent to $32.29.

Nick Scali dropped 0.6 per cent after spending most of the day out in front, while Athlete's Foot owner Accent Group closed 0.6 per cent lower.

A2 Milk lifted consumer staples, rising 1.87 per cent to $11.42, alongside supermarket Coles, which gained 1.02 per cent to $11.88.

Healthcare stocks were up on a 2.35 per cent rise for Sonic Health to $22.25, as well as a 1.13 per cent gain for ResMed to $16.05.

Sector benchmark CSL dragged with a 0.31 per cent loss to $197.29.

Caltex shares boosted the energy sector, up 0.69 per cent to $26.45, with Santos gaining 1.36 per cent to $5.98.

Oil Search fell 0.26 per cent to $7.60.

The Aussie dollar is trading at 71.98 US cents, down from 72.14 US cents on Tuesday.

ON THE ASX:

* The benchmark S&P/ASX200 index was up 20.6 points, or 0.35 per cent, to 5,835.2.

* The All Ordinaries was up 21.9 points, or 0.37 per cent, at 5,893.7.

* At 1630 AEDT, the SPI200 futures index was up 23 points, or 0.4 per cent, at 5,777.0

CURRENCY SNAPSHOT AT 1615 AEDT:

One Australian dollar buys:

* 71.98 US cents, from 72.14 on Tuesday

* 78.09 Japanese yen, from 78.42

* 63.09 euro cents, from 62.85

* 55.98 British pence, from 55.90

* 105.59 NZ cents, from 105.47

GOLD:

The spot price of gold in Sydney at 1630 AEDT was $US1,289.88 per fine ounce, from $US1,290.52 on Tuesday.

European shares closed the day in positive territory on Wednesday as British Prime Minister Theresa May’s resounding defeat in a parliamentary vote on her Brexit deal gave a boost to continental banks.

Analysts and investors interpreted the outcome as a positive for the market, making a “softer, later” Brexit more likely despite the uncertainty ahead of a no confidence vote in May’s government later on Wednesday.

The Euro Stoxx finished the session up 0.5 percent, with most indexes on the continent in the black while London’s FTSE lagged, down 0.5 percent, as a firming pound weighed on multinational exporters which make the lion’s share of their earnings in foreign currencies.

The FTSE 250 a benchmark for domestically exposed UK firms, rose 0.3 percent with homebuilders and local retailers making big ga8ins.

Euro zone banks shares .SX7E were the biggest boost to European indexes, rising 2.4 percent to their highest in over a month as investors bet that a disruptive no-deal Brexit was less likely after the parliamentary vote.

The rally in Italian banks, led by Unicredit (CRDI.MI) up over 10 percent, helped Milan's FTSE MIB outperform peers with a 1.6 percent rise.

Some analysts cautioned however that the new found optimism might be short-lived. “Unfortunately, everything remains possible: new elections, an extension of the deadline for Article 50, or even a second referendum,” said Stefan Kreuzkamp, chief investment officer at DWS. Read more

Wall Street’s main indexes hit a one-month high on Wednesday, boosted by upbeat earnings from Bank of America and Goldman Sachs, with a multi-billion dollar deal in the fintech sector also helping a risk-on trade.

Goldman Sachs Group Inc (GS.N) surged 8.29 percent and was on pace for its best day in seven years after topping quarterly revenue estimates. Bank of America Corp (BAC.N) rose 7.63 percent after reporting a better-than-expected quarterly profit on growth in its loan book.

Their results drove a 2.39 percent gain in the financial sector .SPSY, with the S&P banking subsector .SPXBK jumping 3.07 percent.

Adding to the positive mood was a $22 billion buyout offer by financial technology provider Fiserv Inc (FISV.O) for First Data Corp (FDC.N), the largest deal in the financial technology sector.First Data soared 20.67 percent, while Fiserv’s shares fell 4.21 percent.

A strong start to the U.S. earnings season, trade optimism and hopes of a slower pace in interest rate hikes have helped S&P 500 recoup some of its losses from a recent rout. The index is now about 12 percent away from its Sept. 20 record close. Read more

A measure of Australian consumer confidence took a spill in January as respondents turned gloomy on the economy and their own finances at the start of the new year. 
Read more

Prime Minister Scott Morrison insists Australia's trade relationships with Britain and the European Union are in safe hands after Brexit plans plunged into chaos in the UK parliament. British MPs voted 432-202 on Wednesday morning Australian time against Prime Minister Theresa May's deal for the UK to leave the EU, delivering her government a devastating blow. 
Read more

Australia will see the world's biggest house price declines this year, according to one of the world's major credit ratings agencies, which declared homeowners would have to wait until 2020 to see any recovery. 
Read more

Among the doom and gloom surrounding many global markets, Australia has been a relative beacon of stability in recent years. However, this has started to shift in the last year as a housing slump threatens to take its toll. Some positive news arrived this week in the form of a drop in petrol prices, which should stay low enough to help boost the average disposable income of Australian households. 
Read more

The commercial property sector has kicked off 2019 with $1.6 billion in major asset deals underway. Sydney's tallest office tower - Martin Place's MLC Centre - could soon have a new part-owner after major property investor GPT Group said it will sell its half stake in the landmark building, with expectations the deal will top $800 million. 
Read more

Despite having successfully fended off calls to taper its cash rates up until now, the Reserve Bank of Australia (RBA) is facing pressure to bring them down as yet another bank increases its interest rates. RBA Governor Philip Lowe originally said that Australia's economy was able to cope without rate changes, even as the Royal Commission inquiry threatened to unravel all the progress that the banks had made in the last few years 

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The Federal Reserve is likely to hold its interest rate hikes on pause for the start of 2019 in order to stabilize markets, given economic growth is set to slow and financial conditions having tightened, Guggenheim Partners Global Chief Investment Officer Scott Minerd said on Wednesday.

Read more

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With the markets up quite nicely again this morning, we can afford some nice breakfast.