Thanks @Quantum Torus@Ravgnome@babysteps who filled in for me on Friday, all those who offered (thought there may have been a few threads running at once) you wonderful colleagues who sent me well wishes and all the other AM Loungers - phew!
The Australian share market closed flat, with banking stocks clawing back from a weak start after heavy overnight losses on Wall Street.
The benchmark S&P/ASX200 index was down 2.9 points, or 0.05 per cent, at 5939.5 points on Friday while the broader All Ordinaries lost 0.12 per cent.
China's economy grew 6.5 per cent in the third quarter, a tick short of forecasts and the slowest pace since the global financial crisis.
But Pepperstone head of research Chris Weston said positive commentary from various high-ranking officials in Beijing helped kickstart the local market.
"The pace of growth (in China) is still fairly good," he said.
"Money creation and supply has ticked up a little bit and what we need is a circuit breaker and it does seem we're getting more supportive rhetoric that they are going to defend asset prices."
The financial sector closed higher for the fourth straight session.
National Australia Bank was the only of the major lenders to finish lower after its chief executive Andrew Thorburn appeared at the House economics committee.
It was down 0.3 per cent to $25.67, while Commonwealth Bank had the strongest gains of the big four, up one per cent to $67.92.
The heavyweight materials sector - which has proved a consistent drag for almost two weeks - was lower following an overnight dip for several industrial metals.
Sector giants BHP and Rio Tinto were down 0.3 and 1.7 per cent respectively, and Fortescue Metals and South32 were both more than two per cent lower.
Gold stocks, however, gained on the back of a jump in the safe-haven precious metal, with St Barbara, Northern Star, Regis Resources and Saracen Mineral all closing between 4.3 and 5.3 per cent higher.
Buy-now pay-later fintech Afterpay continued its choppy week, reacting to concerns of an inquiry and negative global sentiment.
It was down 3.5 per cent to $12.50, dragging the infotech sector down 1.1 per cent.
The Australian dollar was cautious after Beijing offset a mixed bag of Chinese data by pledging more support for the economy, though risk sentiment remained all-too fragile after a rough week.
The Aussie was buying 71.09 US cents at 1630 AEDT, from 71.24 US cents on Thursday.
ON THE ASX:
* The S&P/ASX200 was down 2.9 points, or 0.05 per cent, at 5939.5 points
* The All Ordinaries was down 7.4 points, or 0.12 per cent, at 6042.7
* In futures trading the SPI200 futures index was unchanged at 5922.0 points at 1630 AEDT.
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 71.09 US cents, from 71.24 US cents on Thursday
* 79.95 Japanese yen, from 80.15
* 62.04 euro cents, from 61.99
* 54.59 British pence, from 54.44
* 108.33 NZ cents, from 108.76
GOLD:
The spot price of gold in Sydney at 1630 AEDT was $US1227.35 per fine ounce, from $US1222.34 on Thursday.
The U.S. benchmark S&P 500 stock index edged lower on Friday as strong earnings from Procter & Gamble Co (PG.N) were offset by ongoing concerns about rising interest rates and tensions over trade policy denting economic growth.
Shares of Procter & Gamble jumped 8.8 percent after the consumer goods company reported a surprise rise in first-quarter sales. The climb in Procter & Gamble shares lifted the Dow and helped advance the S&P 500 consumer staples index .SPLRCS 2.3 percent.
Chinese authorities are trying to navigate through numerous challenges, as the trade war fears have sparked a blistering selloff in domestic stock markets and a steep decline in the value of the yuan versus the dollar, heightening worries about the growth outlook.
The economy grew 6.5 percent in the third quarter from a year earlier, below an expected 6.6 percent rate, and slower than 6.7 percent in the second quarter, the National Bureau of Statistics said on Friday.
It marked the weakest year-on-year quarterly gross domestic product growth since the first quarter of 2009 at the height of the global financial crisis.
“The trend of slowdown is strengthening despite Chinese authorities’ pledge to encourage domestic investment to support the economy. Domestic demand turned out weaker than unexpectedly solid exports,” said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo.
After another big decline in Chinese stocks on Thursday, policymakers launched a coordinated attempt to soothe markets, with central bank governor Yi Gang saying equity valuations are not in line with economic fundamentals.
Beijing has already been increasing policy support in the last few months to prop up growth.
Yi and senior regulators pledged targeted measures to help ease firms’ financing problems and encourage commercial banks to boost lending to private firms. China’s Vice Premier Liu He, who oversees the economy and financial sector, also chimed in to bolster sentiment.
The Shanghai Composite index .SSEC, which slumped more than 1 percent in early Friday deals, rallied strongly in afternoon trading to finish up 2.6 percent.
Third quarter growth was hurt by the weakest factory output since February 2016 in September as automobile makers cut production by over 10 percent amid a sales slowdown.
“Weakness is largely coming from the secondary industry- most notably manufacturing. We may review our Q4 forecasts,” said Betty Wang, senior China economist at ANZ in Hong Kong.
On a quarterly basis, growth cooled to 1.6 percent from a revised 1.7 percent in the second quarter, meeting expectations.
Importantly, second quarter sequential growth was revised down from the previously reported 1.8 percent, suggesting the economy carried over less momentum into the second half than many analysts had expected.
Before the data release, economists had expected China’s full-year growth to come in at 6.6 percent this year - comfortably meeting the government’s 6.5 percent target - and 6.3 percent next year.
But now some say growth could slow even more dramatically next year.
“Looking ahead, the economic outlook is not optimistic with exports facing further headwinds as U.S. tariffs kick in and demand from emerging countries ebbs. GDP growth is likely to slow to 6.0-6.2 percent next year,” said Nie Wen, an analyst at Hwabao Trust Shanghai.
China’s once high-flying automakers are now feeling the brunt of weaker consumer spending. Car sales fell the most in nearly seven years in September, data showed last week, with GM (GM.N) and Volkswagen (VOWG_p.DE) reporting double-digit declines.
Beijing and Washington have slapped tit-for-tat tariffs on each other’s goods in recent months, sparked by U.S. President Donald Trump’s demands for sweeping changes to China’s intellectual property, industrial subsidy and trade policies.
Plans for bilateral trade talks to resolve the dispute have stalled, triggering a domestic equities rout and putting pressure on China’s already softening economy and weakening currency.
China’s exports unexpectedly kicked accelerated in September, largely as firms front-loaded shipments to dodge stiffer U.S. duties, though analysts see pressure building in coming months.
“We expect an adverse impact from the trade tension will appear more clearly in data after the start of new year,” SMBC Nikko Securities’ Hirayama said.
Separate data on Friday showed China’s factory output growth weakened to 5.8 percent in September from a year earlier, while fixed-asset investment expanded at a slightly faster-than-expected 5.4 percent in the first nine months of the year.
Infrastructure investment rose 3.3 percent year-on-year for Jan-Sept, slower than 4.2 percent growth in the first eight months of the year.
Retail sales rose 9.2 percent in September from a year earlier, bouncing after several months of lackluster growth.
Faced with rising headwinds to the economy, policymakers are shifting their priorities to reducing risks to growth by gradually easing monetary and fiscal policy.
An official with China’s top economic planning agency said in July that China’s economy needs to maintain around 6.5 percent growth in order to ensure enough jobs are created, an indication that Beijing may not be comfortable with growth much below current levels.
Last week the People’s Bank of China (PBOC) announced the fourth reserve requirement ratio (RRR) cut this year, stepping up moves to lower financing costs.
And more support steps look likely, analysts say, as China starts to bear the full brunt of the trade dispute with the United States.
“China is pulling on all the levers to support domestic demand in the face of this trade pressure. There’s already a big acceleration in lending underway and now the PBOC is announcing new steps,” said Ray Attrill, head of currency strategy at NAB in Sydney.
“In the end, China will do what it takes to safeguard their economy and show the U.S.: ‘Hey, we don’t need you." (lol - my comment)
The Australian share market is tipped to open lower again this week, with the shock result in the Wentworth by-election contributing to the result.
A soft lead-in from Wall Street also means the market will open 10 or 15 points lower, AMP Capital chief economist Shane Oliver says.
"Of course the loss of the Wentworth seat adds a bit more uncertainty to the market," Dr Oliver told AAP on Sunday.
"The market doesn't like political uncertainty. Both the Australian dollar and the share market fell 1.5 per cent as the leadership challenge intensified in August," he said.
A federal minority government would also be of some concern to parts of the market, the economist said.
"History has told us those risks around the election are negative to the share market, residential market and the Australian dollar," he said.
Overall, Dr Oliver said not much was happening locally this week except for the by-election fallout and a report on skilled vacancies due on Wednesday, which would not have much impact.
The focus would be global markets, particularly in the United States and in Europe, with company earnings due out later in the week.
"I suspect US earnings will remain a focus but obviously high interest rates and the US-China trade conflict will also be watched closely," Dr Oliver said.
The Australian dollar would also come under pressure because of the political uncertainty and he expected it to drop below 70 US cents by the end of the year.
Source: Netwealth Morning Business Roundup
Let's kick start the week with a Spanish Omelette and for those who need it - lots of Coffee.
In consideration of others, PLEASE include the STOCK CODE in all your posts.
Happy trading, play nicely and make informed decisions.
