Good Morning Fellow Traders,
Thanks @Quantum Torus, @Ravgnome and AM Loungers. Bitcoin back in the green as I type this morning.
The Australian share market has closed flat on Thursday, despite gains for local energy and gold stocks and a positive overnight lead from Wall Street.
The benchmark S&P/ASX200 index closed down 3.1 points, or 0.05 per cent, at 6,244.5 points, while the broader All Ordinaries fell 4.1 points, or 0.06 per cent, to 6,337.6 points.
Australian Stock Report's head of research Chris Conway said investors were waiting for the local
earnings reporting season, which kicks off next week.
"Everyone's really keeping their powder dry ahead of reporting season and that's also reflected in the fact that the market itself has been stuck in a range between 6,200 and 6,300 (points) for the last month," Mr Conway said.
Financial stocks slipped, weighed down by Macquarie Group slumping as much as 4.7 per cent during the session before closing at $121.70, down 2.6 per cent.
Shemara Wikramanayake was announced as the successor to Macquarie CEO Nicholas Moore.
Ms Wikramanayake is "supremely talented", Mr Conway said, but change in leadership will often make investors cautious.
"She's as good a succession plan as you could possibly hope for, but ultimately shareholders don't like change," he said.
In other company news, the listed media sector got a shake up with news Nine Entertainment will acquire Fairfax Media in a $2.2 billion cash-and-shares deal.
Nine ended Thursday down 26 cents, or 10.3 per cent at $2.26 while Fairfax shares jumped 6.5 cents, or 8.4 per cent, to 83.5 cents.
National Australia Bank closed flat at $28.13 as it announced it would be refunding about $67 million to superannuation customers.
Westpac dropped 0.4 per cent to $29.15, Commonwealth Bank rose 0.1 per cent to $74.83, and ANZ slipped 0.4 per cent to $29.01.
Australia's largest listed gold miner, Newcrest Mining, reported a 15 per cent bounce in fourth-quarter gold output, meeting annual targets despite gold prices losing nearly six per cent so far this year.
Gold stocks all gained ground with Newcrest up 4.6 per cent to $20.92, Northern Star adding 4.3 per cent to $7.36 and Evolution Mining up 2.4 per cent to $3.04.
Oil stocks gained, helped by Brent crude oil prices rising to over $US74.64 a barrel.
The US dollar gained as trade war worries eased.
The Australian dollar was trading at 74.28 US cents at 1700 AEST on Thursday, up from 74.05 US cents on Wednesday.
ON THE ASX
* The benchmark S&P/ASX200 index closed down 3.1 points, or 0.05 per cent, at 6,244.5 points.
* The broader All Ordinaries fell 4.1 points, or 0.06 per cent, at 6,337.6 points.
* The SPI200 futures contract was up six points, or 0.01 per cent, at 6,197 points.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.28 US cents, from 74.05 US cents on Tuesday
* 82.21 Japanese yen, from 82.31
* 63.37 euro cents, from 63.31
* 56.31 British pence, from 56.22
* 108.73 NZ cents, from 108.79
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,229.67 per fine ounce, up from $US1,227.53 per fine ounce on Tuesday.
A plunge in Facebook Inc shares rattled Amazon.com Inc investors on Thursday, and traders in the options market were defensive as the social network’s fellow FAANG company gets set to report quarterly results later in the day.
Facebook on Wednesday warned about a margin hit as revenue growth slows and user privacy costs climb, and its 20 percent share drop heightened focus on the online retailer, already a closely watched stock.
Amazon was the second-biggest decliner in the so-called FAANG group of high-flying tech companies, but Facebook’s second-quarter earnings also cast a pall on shares of Apple Inc, Netflix Inc and Google parent Alphabet Inc.
The Nasdaq was down about 1 percent, even while the Dow Jones Industrial Average traded up 0.5 percent.
Amazon shares fell nearly 3 percent to $1,811.66, while shares of Netflix, Alphabet and Apple were roughly flat.
“Those investors who were tempted to hold Amazon through earnings saw Facebook and decided to sell,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.
“This is a move to take some risk off the table,” Ablin said.
As Amazon expands into grocery retail through its acquisition of Whole Foods Market last year, and as more businesses move their IT departments onto the cloud, its stock price has been red hot. It was recently trading at 110 times expected earnings, compared to more-profitable but slower growing Apple’s valuation of 15 times earnings.
Amazon’s stock market value has surged more than 50 percent in 2018 and briefly reached a record $900 billion on July 18 before easing to $880 billion on Thursday.
Analysts on average expect Amazon’s revenue to rise 41 percent in the June quarter to $53.41 billion and increase a total of 33 percent in 2018, according to Thomson Reuters data. Analysts expect Amazon to report $2.50 in non-GAAP earnings per share in the June quarter.
Weekly options on Amazon implied a 5.7 percent swing in either direction by Friday, up about 1 percentage point from what they implied on Wednesday just before Facebook posted results, according to data from options analytics firm Trade Alert.
“That is opposite to what normally happens,” said Fred Ruffy, analyst at New York-based Trade Alert. “Volatility perceptions have increased after Facebook.”
All things being equal, the value of options decline over time, meaning that as the days pass there is a tendency for the move implied by the options price to shrink.
The implied move for Amazon is now bigger than its 4 percent average move the day after results over the last eight quarters.
A strong demand for defensive options was evident in the sharp rise in the price of puts.
The cost of a put contract that would protect against a drop in Amazon shares below $1,830 by the end of trading on Friday jumped about 80 percent to $50.72, according to Thomson Reuters data.
“Since Amazon hit $1,000 a share, we’ve taken some money off the table, but we’re not selling today,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “Of all the tech companies, Amazon to me is the most vital. It’s the one with the brightest future.”
Source: Netwealth Morning Business Roundup
Finish off the week with a Breakfast Burrito and a Coffee. Unfortunately I have had my lunch date cancelled so that probably means that the stocks that were going to run will now stall. Sorry about that folks.
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Happy trading, play nicely and make informed decisions.
