Day Trading Pre Open - 2 February 2018

Good Morning Fellow Traders,

The share market posted its best daily gain in four months as investors anticipated strong half year earnings results for Australian companies.

The benchmark S&P/ASX200 index was up 52.4 points, or 0.87 per cent, at 6,090.1 points at 1630 AEDT, with all sectors higher, with the exception of telcos.

Charles Schwab Australia market analyst Ben Le Brun said it was a strong session, led by the engine room of energy, materials and financial stocks.
"We didn't get a rip-roaring lead from Wall Street, so we're running off our own steam to a large degree, and setting ourselves up beautifully for the earnings season here," he said.
"That's where the focus is going to be switching to, the domestic factors such as earnings, and hopefully coinciding with some nice reports out of the US as well."

Among the big names issuing earnings reports next week are Commonwealth Bank, Rio Tinto and AGL Energy.
Mr Le Brun said the so-called 'confession season' in January, in which companies indicate major variations to their expected earnings, had been relatively uneventful this year.
"It's been eerily quiet, so I think it sets us up pretty well," he said.

Commonwealth Bank rose 1.5 per cent at $80.01, as the Australia Prudential Regulation Authority (APRA) gave an update on its inquiry into the bank, saying it will pay particular attention to issues including how the lender treats risk and pays its executives.
Westpac also gained 1.5 per cent, to $31.42, ANZ put on 1.1 per cent to $28.90 and National Australia Bank was 0.6 per cent higher at $29.30.

A rebound in oil prices boosted energy stocks, with Woodside Petroleum improving 1.3 per cent to $33.55, Santos adding one per cent to $5.15 and Oil Search was 1.1 per cent to $7.65.

BHP Billiton gained 1.5 per cent to $30.66, Rio Tinto added 1.1 per cent to $77.70, while Fortescue Metals dropped 0.2 per cent to $4.95.

Vacuum cleaner retailer Godfreys plunged 16.9 per cent to 32 cents - an all-time low - after it reported weak sales during the Christmas period and a sharp drop in underlying earnings.

The Australian dollar is weaker but remains above 80 US cents.

Mr Le Brun said the local currency was impacted by a sharper than expected fall in building approvals for new homes in December, but was also supported by stronger-than-expected manufacturing data out of China from a private survey that focuses on smaller businesses.

ON THE ASX:
* The benchmark S&P/ASX200 index was up 52.4 points, or 0.87 per cent, at 6,090.1 points.
* The broader All Ordinaries index was up 52.3 points, or 0.85 per cent, at 6,198.8 points.
* The SPI200 futures contract was up 55 points, or 0.9 per cent, at 6,036 points.
* National turnover was 3.7 billion securities traded worth $7 billion.

CURRENCY SNAPSHOT AT 1700 AEDT
One Australian dollar buys:
* 80.43 US cents, from 80.90 US cents on Wednesday
* 87.95 Japanese yen, from 87.92 yen
* 64.76 euro cents, from 65.02 euro cents
* 56.68 British pence, from 56.99 pence
* 109.13 NZ cents, from 109.45 NZ cents

GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,344.04 per fine ounce, from $US1,343.51 per fine ounce on Wednesday.

BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 1.9958pct, from 2.0249pct on Wednesday.
* CGS 4.75pct April 2027, 2.7607pct, from 2.7689pct
Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.195 (implying a yield of 2.805pct), from 97.185 (2.815pct), on Wednesday
* March 2018 3-year bond futures contract at 97.835 (2.165pct), from 97.805 (2.195pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)

Wall Street rose in early afternoon trading on Thursday, reversing from earlier losses, as strong reports from Facebook and Microsoft led the technology sector higher and hawkish comments from the Federal Reserves lifted bank stocks.

Facebook (FB.O) rose 4.3 percent after the company said it expects ad sales to rise despite a dip in usage on the social media network.
Microsoft (MSFT.O) was up 0.88 percent, reversing from a decline in premarket trading, after beating Wall Street’s profit forecast on growth in its cloud computing business.

The technology sector .SPLRCT was up 0.53 percent. Its gainers included Apple (AAPL.O), which is to report earnings after the bell, along with Alphabet (GOOGL.O) and Amazon (AMZN.O).

Strong reports from S&P 500 companies so far have pushed up analysts’ fourth-quarter profit growth estimate to 13.7 percent, from 12 percent at the start of the month, according to Thomson Reuters data.

At 12:32 p.m. ET (1732 GMT), the Dow Jones Industrial Average .DJI was up 141.57 points, or 0.54 percent, at 26,290.96, the S&P 500 .SPX was up 9.92 points, or 0.35 percent, at 2,833.73 and the Nasdaq Composite .IXIC was up 18.31 points, or 0.25 percent, at 7,429.79.

The market opened lower, a day after the Federal Reserve kept interest rates unchanged, but raised its inflation outlook for the year and flagged “further gradual” rate hikes. Currently the market has priced in three rate hikes for 2018.

“There are concerns that rates are moving up and inflation is firming,” said Jeff Zipper, managing director for investments at Private Client Reserve at U.S. Bank.
“If inflation moves higher then the chances of a fourth rate hike go up. The market is a lot more jittery and is dissecting every piece of economic data more closely.”

Economic data also painted a mixed picture. An unexpected drop in weekly jobless claims pointed to a tight labor market. But while fourth-quarter nonfarm productivity fell for the first time in seven quarters, unit labor costs rose, which could signal faster inflation. Another report showed U.S. factory activity slowed in January as new orders fell.

The economic data-heavy week will culminate in the nonfarm payrolls data on Friday.
Banks, which tend to benefit from higher interest rates gained, leading the financial sector .SPSY up 0.66 percent.
Other notable stock movers included eBay (EBAY.O), which jumped 14.1 percent after reporting a strong holiday quarter and saying it would eventually move away from PayPal (PYPL.O) as its main payments partner. PayPal fell 6.2 percent.

UPS (UPS.N) dropped 5.8 percent after the world’s largest package delivery company reported a fourth-quarter net profit that was hurt by additional costs.

Advancing issues outnumbered decliners on the NYSE by 1,503 to 1,372. On the Nasdaq, 1,511 issues rose and 1,343 fell.
The S&P 500 index showed 25 new 52-week highs and seven new lows, while the Nasdaq recorded 60 new highs and 55 new lows.

Source: Netwealth Morning Business Roundup

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Happy trading, play nicely and make informed decisions.