Day Trading Pre Open - 11 January 2018

Good Morning Fellow Traders,

The share market has lost ground as investors pulled back following five straight sessions of gains.

The benchmark S&P/ASX200 index fell 0.6 per cent to 6,096.7 points, with falls recorded in all sectors of the market.

CMC Markets chief analyst Ric Spooner said local investors looked to pre-empt a correction, as a sixth consecutive session of gains on the US market heightened fears of a looming pullback.
"There were possible signs in the wind last night as the US rally became more concentrated, with only four of the sectors higher, followed by a retreat at the close - both signs that the profit takers might be starting to get a little trigger happy," Mr Spooner said.

The weakest performers on the local market were materials, industrial and telco stocks.

Mineral sands specialist Iluka Resources led the materials sector's decline, down 3.4 per cent to $10.01, while BHP Billiton shed 0.3 per cent and Rio Tinto dropped 0.8 per cent.

A weaker gold price contributed to a 2.3 per cent fall for Newcrest Mining to $22.65, while fellow gold miner Evolution was two per cent weaker at $2.49.

Despite stronger global oil prices, energy stocks were mixed.
Origin Energy fell 2.4 per cent to $9.53, Oil Search dropped 1.1 per cent to $7.97 and Woodside Petroleum shed 0.5 per cent to $34.47, while Santos gained 0.2 per cent to $5.60, and Beach Energy jumped 4.3 per cent to $1.35 following a positive monthly drilling report.

Westpac was the only major lender to gain ground, adding 0.2 per cent, while its three major rivals fell by between 0.4 per cent and 0.7 per cent.

Domino's Pizza dropped 1.9 per cent to $45.64, as Deutsche Bank downgraded its rating on the stock to sell in the wake of harder than expected wage negotiations.

The Australian dollar conceded some ground against a greenback inspired by a spike in US bond yields.

ON THE ASX:
* The benchmark S&P/ASX200 index was down 39.1 points, or 0.64 per cent, at 6,096.7 points.
* The broader All Ordinaries index was down 35.6 points, or 0.57 per cent, at 6,205.9 points.
* The SPI200 futures contract was down 42 points, or 0.69 per cent, at 6,046 points
* National turnover was 4.8 billion securities traded worth $5.8 billion.

CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 78.14 US cents, from 78.54 US on Tuesday
* 87.80 Japanese yen, from 88.50 yen
* 65.51 euro cents, from 65.64 euro cents
* 57.80 British pence, from 57.86 pence
* 109.10 NZ cents, from 109.31 NZ cents

GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,309.78 per fine ounce, from $US1,319.20 per fine ounce on Tuesday.

BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 2.0114pct, from 2.0017pct on Tuesday
* CGS 4.75pct April 2027, 2.6683pct, from 2.6214pct

Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.28 (implying a yield of 2.72pct), from 97.325 (2.675pct) on Tuesday
* March 2018 3-year bond futures contract at 97.85 (2.15pct), from 97.865 (2.135pct)

(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)

Wall Street’s major indexes pared earlier losses on Wednesday as higher U.S. government bond yields drove gains for banks and other financial stocks.

Markets had initially fallen on a Bloomberg report that China, the world’s biggest holder of U.S. Treasuries, was considering slowing purchases.

The S&P financial index .SPSY rose more than 1 percent, helped by gains in Wells Fargo (WFC.N) and JPMorgan (JPM.N) ahead of results on Friday.

The China report weakened the dollar, which slipped 0.25 percent, while gold jumped to its highest in four months.
At 12:31 p.m. ET (1731 GMT), the Dow Jones Industrial Average .DJI was down 13.51 points, or 0.05 percent, at 25,372.29 and the S&P 500 .SPX was down 3.93 points, or 0.14 percent, at 2,747.36.

The Nasdaq Composite .IXIC was down 22.42 points, or 0.31 percent, at 7,141.15.

“We’ve had a tremendous run, mostly unabated since Trump’s election in 2016 and with no volatility. If we do see a pullback, that’s going to be a buying opportunity,” said Michael Scanlon, managing director of Manulife Asset Management.

The S&P and the Nasdaq have closed at record highs every single day in 2018, buoyed by optimism over global growth and expectations of a strong quarterly earnings.
Earnings for S&P 500 companies are expected to increase by 11.8 percent, with biggest contribution from the energy sector, according to Thomson Reuters I/B/E/S.

“It will be the first time that Corporate America has the ability to talk about guidance that incorporates lower tax rates. It’s going to be confusing and noisy but will be fascinating,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.

Berkshire Hathaway (BRKb.N) rose 1 percent after the conglomerate promoted two of its top executives, cementing their status as the most likely successors to Warren Buffett.

Eight of the 11 major S&P sectors were lower, led by a 1.75 percent fall in interest-rate sensitive real estate and 1.24 percent drop in utilities .SPLRCU.

The Dow Jones Transport index .DJT, often looked at as a gauge of the economy’s health, rose 0.45 percent after United Continental (UAL.N) reported higher traffic for December, boosting other airline stocks.

Declining issues outnumbered advancers on the NYSE by 1,786 to 1,077. On the Nasdaq, 1,624 issues fell and 1,264 advanced.

Source: Netwealth Morning Business Roundup

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