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Market Opener – 30 Jul 2019

 
Local Markets Commentary
The Australian market opens today’s trade ahead of an early-afternoon Bank of Japan post-policy meeting statement, the commencement of face-to-face high-level official China-US trade talks in Shanghai later today, and earnings from Apple and Facebook in the US tonight.

Locally today, a weekly consumer sentiment reading is due pre-trade.

The Australian Bureau of Statistics (ABS) publishes June building approvals 11.30am AEST. 

In addition, another mass of June quarter corporate reports is anticipated ahead of end-of-month.

Regionally, the Bank of Japan’s (BoJ) post-policy meeting statement is expected 1pm AEST, following this morning’s (9.50am AEST) June industrial production figures.

A BoJ quarterly outlook report is also due for release this afternoon.

In overnight commodities trade, WTI crude rallied some while Brent settled with a relatively meagre gain.

US gold futures (August) closed slightly higher. 

Iron ore (Nymex CFR China, 62% Fe) slipped US9c/t, remaining slightly above $US120.00/t.

LME copper joined nickel in rally mode, but pace appeared constrained. Aluminium swung to settle a modestly higher.

The $A remained within a narrow range after trading at ~US69.05c early yesterday evening.

Overseas Market Commentary
Choppy trade featured across several major European and US equities markets overnight, although the NASDAQ and FTSE100 each settled into a trend, one negative and the latter positive. 

Among currencies, the British pound slid against the $US and euro, supporting FTSE trade and pushing 10-year government bonds to their lowest in ~three years. 

This appeared mostly in response to tough UK leadership talk regarding plans to separate from the European Union (EU) within the current timetable.

Separately, the $US was traded against ongoing interest rate speculation ahead of this week’s US Federal Reserve policy meeting.

Select trade information was again on tap, ahead of US-China high-level in-person talks scheduled to commence later today in Shanghai. 

As foreshadowed by Chinese data released over the weekend, US Department of Agriculture data revealed the US had shipped 600,000t of soybean, across nine loads, to China last week, representing the greatest weekly pace of such shipments since mid-February, even though the cargoes were ordered at least two months ago. In addition, one load of corn was also exported from the US to China last week.

Also late weekend, a Chinese media report claimed the National Development & Reform Commission and Ministry of Commerce had confirmed China had contacted US producers and/or suppliers regarding the supply of several agricultural products since 19 July, and that some orders had subsequently been placed.

Last week’s US data showed included China’s cancellation of orders for 148,000t of soybean.

Among scant data releases, a Texas region manufacturing index improved, albeit it to -6.3, against -12.1 last month.

Earlier in the UK, June mortgage lending was calculated at £3.73B, against £3.10B in May. Net overall lending to individuals rose by £1B for the month, to £4.8B.

Tonight in the US, the Federal Reserve commences a two-day policy meeting, amid further public criticism from the US president and pressure to cut rates, this time by more than 0.25%. Meeting outcomes will be known early Thursday (AEST).

Among data releases, (US) June personal income and spending plus pending home sales are due, together with a Conference Board consumer sentiment reading and May house price index.

Elsewhere, a preliminary July CPI reading is due for Germany.

Companies scheduled to report earnings later today and tonight include: Advanced Micro Devices, Apple, Bayer, BP, ConocoPhillips, Eli Lily, Facebook, General Electric, Gilead Sciences, Hino Motors, Hyundai Steel, L’Oréal, Mastercard, Merck, Mitsubishi Chemical, Mondelez International (brands include Cadbury, Nabisco, Oreo, Philadelphia, Ritz, Toblerone, Trident), Nintendo, Pfizer, Procter & Gamble, Reckitt Benckiser, Samsung Electronics and Sony.

In overnight corporate news, Pfizer revealed a plan to spin off an off-patent drugs division and to merge this with Mylan, to create a company that will own products such as Epi-pen, Lipitor and Viagra. 

Pfizer and Mylan also reported quarterly earnings, with Pfizer revealing less-than-optimal revenue.

Beyond Meat pleased with quarterly progress, but was ultimately pummelled due to another capital raising.
 
Posted on 30/07/2019 8:00:00 AM

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