Good Morning Fellow Traders,
Australian shares fell back in afternoon trade to close lower on Friday despite the impetus of some strong company profit figures and overnight gains on Wall Street.
The benchmark S&P/ASX200 index ended Friday down 0.08 per cent at 5,904.0 points, with healthcare and industrial stocks making the strongest gains.
The index gained 1.1 per cent over the week.
Bell Direct equities strategist Julia Lee said Friday's performance was disappointing given the strong Wall Street leads.
Ms Lee said reporting season, now ending its second week, had been lacklustre so far.
"January's confession season was so mild that I was expecting to see a more positive environment in terms of upgrades," she said.
Healthcare sector gains were led by Healthscope, up 6.5 per cent to $1.895 a day after the company posted a 12.6 per cent dip in half-year profit.
Primary Health Care gained 3.4 per cent to $3.65 as it put an end to three years of waning profits by lifting first-half profit 4.7 per cent.
Plasma products maker CSL gained 1.3 per cent to $153.39 and Resmed gained 0.8 per cent to $11.80.
Health insurer Medibank Private closed 3.6 per cent higher at $3.15, after it lifted half-year profit almost six per cent to $245.6 million.
A fall in gold mining stocks weighed on the materials sector, with Newcrest Mining down 3.2 per cent and Evolution recovering late, to be only 1.4 per cent lower at the close, while diversified miner South32 suffered a 5.1 per cent fall.
Rio Tinto and BHP Billiton recovered from morning losses to close 0.5 per cent and 0.4 per cent higher.
Energy stocks were in retreat, led by a 4.5 per cent slump for Whitehaven, despite the coal miner more than doubling half year profit.
Santos and Oil Search were also also lower, 0.8 per cent and 1.2 per cent each.
In other half-year results, Village Roadshow shares were 5.5 per cent higher at $3.26 after logging a first half profit on the exit of its Singapore cinema business, while wealth manager IOOF reported a 39 per cent fall in half-year profit, its shares down 2.2 per cent at $10.27.
The banking sector was down, with only Commonwealth Bank gaining a slim 16 cents to $74.02 while NAB, Westpac and ANZ were down by 0.3 to 0.8 per cent.
The Australian dollar gained solidly during the session as pressure built on the US dollar which has continues to lose ground against the Japanese Yen.
The local currency was trading at 79.72 US cents at 1700 AEDT, from 79.37 on Thursday.
ON THE ASX:
* The benchmark S&P/ASX200 index ended down five points, or 0.08 per cent, at 5,904.0
* The broader All Ordinaries index was down 3.9 points, or 0.06 per cent, at 6,004.8 points
* The SPI200 futures contract was down five points, or 0.09 per cent, at 5,857.0 points.
* National turnover was 2.6 billion securities traded worth $5.6 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 79.72 US cents, from 79.37 on Thursday
* 84.34 Japanese yen, from 84.55 yen
* 63.52 euro cents, from 63.67 euro cents
* 56.40 British pence, from 56.64 pence
* 107.39 NZ cents, from 107.57 cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,358.19 per fine ounce, from $US1,354.41 per fine ounce on Thursday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 2.0186pct, from 2.0035pct
* CGS 4.75pct April 2027, 2.8696pct, from 2.8669pct
Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.08 (implying a yield of 2.92 pct), from 97.085 (2.915pct) on Thursday
* March 2018 3-year bond futures contract at 97.835 (2.165pct), from 97.840 (2.160pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)
The fallout on Wall Street from allegations that several Russians meddled in the 2016 US election is pointing to a flat start to the new trading week in Australia.
The US share market enjoyed decent gains on Friday but nearly all were lost after a grand jury indicted 13 Russian nationals and three Russian entities, accused of interfering in an effort to support Donald Trump.
The Dow Jones Industrial Average closed up just 0.08 per cent, while the S&P 500 gained 0.04 per cent.
Combined with some falls in commodity prices, AMP Capital's chief economist Shane Oliver is predicting little movement on the Australian market on Monday.
"My suspicion is we will probably open the market flat to down slightly, maybe five or 10 points," he said.
The benchmark S&P/ASX200 index ended Friday down 0.08 per cent at 5,904.0 points, with healthcare and industrial stocks making the strongest gains.
The index was up 1.1 per cent over the week.
Monday is expected to be a relatively quiet day of trading, with no major economic data and a small handful of profit results.
Dr Oliver says it won't start to hot up until Tuesday, when the Reserve Bank releases the minutes of its most recent
monetary policymeeting.
It's tipped to repeat the message that, with wages likely to grow only gradually, there's no urgency to raise interest rates.
The Australian Bureau of Statistics on Wednesday publishes the wage price index for the December quarter, which Dr Oliver believes will be the highlight of the week.
"That's the big issue in Australia - when are wages going to pick up?" he said.
Some experts are pointing to an increase of 0.5 per cent, keeping annual growth at about two per cent.
"But there is a little bit of a risk that we might even get a fallback in wages growth, below the two per cent bumper," Dr Oliver said.
Reporting season continues, with BHP, Wesfarmers, Fairfax, Crown and Qantas among the big names to publish their results.
The S&P 500 rose marginally on Friday to mark its biggest weekly increase in five years, although earlier gains evaporated after the indictment of Russians for meddling in the 2016 presidential election sent investors into defensive mode before a long weekend.
A market correction sparked by inflation concerns earlier in February raised fears that a nine-year bull market had ended, but data on consumer prices and retail sales this week left investors less worried, returning the stock market to its upward trajectory.
The office of U.S. Special Counsel Robert Mueller charged 13 Russian nationals and three Russian companies accused of interfering with U.S. elections in an effort to support then-candidate Donald Trump.
The S&P 500 had been up over half a percent but lost nearly all of that after the announcement of the indictments.
“The market was looking for an excuse to roll over and Russia headlines would do it. You’ve had such a rally for the week, and people have been looking for an excuse to take profits heading into the weekend,” said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas.
Investors snapped up shares of Johnson & Johnson (
JNJ.N), Abbvie (
ABBV.N) and Pfizer (
PFE.N), all up more than 1.4 percent and supporting the S&P 500 more than any other stocks.
A strong fourth-quarter reporting season and deep corporate tax cuts introduced this year have led analysts to increase their estimates for 2018 S&P 500 earnings growth to 19 percent from 12 percent in early January.
“The fundamental story has not changed,” said Ben Phillips, Chief Investment Officer of EventShares. “We really have not seen the tax reform start flowing through yet into company earnings. We think it’s going to cause a second wave of earnings optimism.”
The Dow Jones Industrial Average
.DJI rose 0.08 percent to end at 25,219.38 points, while the S&P 500
.SPX gained 0.04 percent to 2,732.22.
The Nasdaq Composite
.IXIC dropped 0.23 percent to 7,239.47.
The Dow rose 4.25 percent for the week, its strongest weekly gain since November 2016.
The Nasdaq rose 5.31 percent for the week, its best week since December 2011.
The S&P 500’s 4.3 percent gain for the week was its biggest weekly advance since January 2013. But it remains down nearly 5 percent from its record high on Jan. 26.
U.S. stock markets will remain closed on Monday for the Presidents Day holiday. They are unlikely to return to the unusually calm conditions seen last year, even though equities have already recovered more than half the ground lost in the recent sell-off and traders have rapidly dialed down fear.
Advancing issues outnumbered declining ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored advancers.
Volume on U.S. exchanges was 7.1 billion shares, below the 8.5 billion average for the full session over the last 20 trading days.
Source: Netwealth Morning Business Roundup
Brekkie this fine Monday morning is an Egg and Spinach Roulade and your choice of Smoothie.
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