Day Trading Pre Open - 31 January

Good Morning Fellow Traders,

As we farewell January, I hope you all managed more gains than losses.

The share market has posted its largest daily fall since mid-November, with the mining, energy and healthcare sectors the worst performers.

The benchmark S&P/ASX200 index dropped 52.6 points, or 0.87 per cent, to 6,022.8 points.

Phillip Capital senior client adviser Michael Heffernan said Wall Street was the main influence, as there was no major local news to drive down shares.

The Dow Jones Industrial Average dropped as Apple was hit by reports of waning demand for the iPhone X, and defensive sectors weakened as US 10-year treasury yields hit their highest since 2014.

"It's like Pavlov's dog here," Mr Heffernan said.
"If the American market has a fall of about over half a per cent, it's certain that our futures market at the beginning of the day will show that we're going to be down by a certain amount, and then we exaggerate what the US has done.
"And that's exactly what we've done today without any major local impetus."

Mr Heffernan said a drop in oil prices put pressure on energy stocks, with Woodside Petroleum falling 2.2 per cent to $33.37, Santos losing 1.7 per cent to $5.16, and Oil Search 1.3 per cent weaker at $7.71.

Stocks with strong US exposure, such as blood and vaccines group CSL and investment bank Macquarie Group, retreated as the US dollar rose.
CSL dropped 1.6 per cent to $147.50 and Macquarie dropped 1.6 per cent to $103.48.

BHP Billiton lost 1.3 per cent to $30.34, Rio Tinto backtracked 0.7 per cent to $78.56, and Fortescue Metals fell 0.4 per cent to $5.07 despite reporting record low iron ore production costs for the three months to December.

All four major banks also lost ground, with National Australia Bank the worst performer, retreating 0.6 per cent to $29.07.

Village Roadshow plunged 10.7 per cent to $3.67 after the theme parks and film distribution company warned that its half year results will be substantially weaker than a year ago.

The Australian dollar retreated from its highest level in more than two years, which it hit on Friday night, as the US dollar stabilised.

ON THE ASX:
* The benchmark S&P/ASX200 index was down 52.6 points, or 0.87 per cent, at 6,022.8 points.
* The broader All Ordinaries index was down 52.3 points, or 0.85 per cent, at 6,135.3 points
* The SPI200 futures contract was down 50 points, or 0.83 per cent, at 5,960 points
* National turnover was 3.8 billion securities traded worth $5.3 billion.

CURRENCY SNAPSHOT AT 1700 AEDT
One Australian dollar buys:
* 80.66 US cents, from 80.89 US cents on Monday
* 87.67 Japanese yen, from 88.01 yen
* 65.23 euro cents, from 65.16 euro cents
* 57.46 British pence, from 57.24 pence
* 110.20 NZ cents, from 110.33 NZ cents

GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,335.14 per fine ounce, from $US1,348.50 per fine ounce on Monday.

BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 2.0848pct, from 2.0774pct on Monday
* CGS 4.75pct April 2027, 2.8188pct, from 2.8089pct.
Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.135 (implying a yield of 2.865pct), from 97.145 (2.855pct), on Monday
* March 2018 3-year bond futures contract at 97.73 (2.27pct), unchanged.
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)

Rising bond yields and a sell-off in healthcare shares sent the U.S. stock market sliding on Tuesday, with the Dow Jones Industrial Average’s 352-point tumble its steepest in eight months.

Shares of healthcare-related companies sank after Amazon.com (AMZN.O), Berkshire Hathaway (BRKa.N) and JPMorgan (JPM.N) said they plan to form a venture aimed at lowering healthcare costs for their U.S. employees. [nL4N1PP4KO]
The S&P health sector .SPXHC tumbled 1.8 percent, the most among the 11 major sectors. Health insurer UnitedHealth’s (UNH.N) 3.2 percent drop was the most on the Dow, while Express Scripts’ (ESRX.O) 6.2 percent decline weighed the most on the Nasdaq and S&P.

U.S. Treasury long-dated yields rose in choppy trading ahead of a slew of events this week such as a Federal Reserve monetary policy decision which could help shed more light on the outlook for interest rates this year. [US/]
The Fed’s ongoing two-day meeting will be watched for comments that could raise the likelihood of rates being hiked four times this year, instead of three, especially as inflation readings have firmed in recent readings.

“Investors are getting a bit worried about inflation which has led some people to believe that the Fed might be more aggressive when it comes to raising rates,” said Robert Pavlik, chief investment strategist at SlateStone Wealth.

At 12:33 p.m. ET (1733 GMT), the Dow Jones Industrial Average .DJI was down 333.27 points, or 1.26 percent, at 26,106.21. The index fell as much as 352 points, its steepest intraday point drop since May 17.
The S&P 500 .SPX was down 27.82 points, or 0.97 percent, at 2,825.71 and the Nasdaq Composite .IXIC was down 60.17 points, or 0.81 percent, at 7,406.33.

The CBOE Volatility Index .VIX, the most widely followed gauge for investors’ “fears”, rose to as much as 15.42, its highest level since August.

“I think despite this selloff, all indications point to a firming economy and I do expect to see some bargain hunters step in soon,” Pavlik said.

President Donald Trump’s first State of the Union address later on Tuesday will be monitored for his comments on a $1.7 trillion infrastructure spending plan and on trade.

Among earnings, Pfizer (PFE.N) shares fell 3.3 percent. They had risen about 2 percent premarket, aiming for their 2002 highs, after the company’s strong results and forecast.

Harley-Davidson (HOG.N) dropped 8.1 percent after the motorcycle maker forecast a drop in shipments this year.
Apple (AAPL.O) was down another 1.1 percent on fears that the company will cut production of the iPhone X.

Declining issues outnumbered advancers on the NYSE by 2,388 to 539. On the Nasdaq, 2,201 issues fell and 691 advanced.
The S&P 500 index showed 14 new 52-week highs and four new lows, while the Nasdaq recorded 35 new highs and 37 new lows.

Source: Netwealth Morning Business Roundup

Finish the month with Eggs aboard a Kale and Feta Toast base with a rich Dragonfruit Smoothie.





Happy trading, play nicely and make informed decisions.