Thanks Oscar and morning crew. Half-time round-up: Shares...

Thanks Oscar and morning crew.


Half-time round-up:

Shares retreated ahead of this afternoon's Reserve Bank rate announcement before paring gains as positive US equity futures partly offset a downswing in crude oil and a poorly-received earnings update from Seven West.

At 1pm EST the ASX 200 was 18 points or 0.3% lower at 5569 with the energy sector (-2.5%) leading the way down after crude dipped briefly below US$40 a barrel overnight. Also weak was the consumer discretionary sector, off 1.1% as a profit downgrade from SWM weighed on NEC and other media stocks. Telecoms +0.5% was the best of the sectors, ahead of utilities +0.3% and consumer staples +0.3%.

The market has rallied strongly since late June amid expectations that central banks around the world will counter any fallout from Britain's exit from the European Union. Japanese Prime Minister Shinzo Abe was due to announce fresh fiscal stimulus plans this afternoon. Also due this afternoon: an RBA policy update at 2.30pm EST.

“The RBA’s decision remains a very close call,” Richard Grace, chief currency strategist at CBA in Sydney, told Bloomberg. It’s “entirely driven by the inflation outlook. It is not because the Australian economy desperately needs additional stimulus to support demand.”
  
China's Shanghai Composite was up 0.14% and Japan's Nikkei off 0.69%. Trade on Hong Kong's Hang Seng was delayed by a typhoon warning. Dow futures were recently ahead 35 points or 0.19%.

Crude oil futures rebounded 13 cents or 0.32% this morning to US$40.19 a barrel. Gold futures were $4.30 or 0.32% in the red at US$1,355.30 an ounce. The dollar was buying 75.38 US cents.


Little evidence of excitement at the prospect of a rate cut this arvo. Already factored in or not really expected? Either way, the market has room to move, whatever the outcome. I could use a cut to help me with NEC. Though it would be worth buying in the mid 90s, given it has already dropped a lot in anticipation of a weak result. Now getting punished harder than SWM. That's like kicking the dog when your partner made you mad. Ah well, no one said the market was logical - a few months ago the index danced to the decline in crude oil, now the energy sector is barely listening. Go figure. Also took TAS, AVQ and CM8.