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Market Opener – 18 Jul 2019

 
Local Markets Commentary
The Australian market opens today’s trade following negative overnight international equities trade sentiment, ahead of some key regional and domestic data releases. 

Locally today, the Australia Bureau of Statistics (ABS) releases June employment statistics 11.30am AEST.

In addition, NAB releases its June quarter version of its monthly business survey series.

Regionally, Japan is scheduled to release June trade figures 9.50am AEST.

In overnight commodities trade, oil fell further.

US gold futures (August) swung higher. 

Iron ore (China port, 62% Fe) inched another US5c/t lower, remaining above $US121.10/t.

LME copper settled slightly higher. Nickel continued to rally. 

The $A was contained within a narrow range after trading at US70.10c early yesterday evening.

Overseas Market Commentary
Sentiment weakened in early trade across major European and US equities markets overnight, amid further key data releases and earnings reports from high-profile stocks.

In overnight US data releases, the Federal Reserve’s periodic district-by-district ‘beige book’ economic roundup included claims trade relationship uncertainties were pushing concerns higher, higher import taxes had impacted manufacturing, technology and transport companies, manufacturing and technology in particular in the Boston area, and that petroleum exploration companies were cutting back on spending.

Overall, the Fed concluded most economic growth was continuing at a modest pace, however.

June building approvals dropped 6.1% for the month, following a 0.7% May rise.

Housing starts fell by 0.9% after declining 0.4% in May.

Weekly mortgage applications fell 1.1%, with 30-year mortgage rates rising to 4.12% from 4.04%, and after dropping 2.4% the previous week. 

Earlier, the euro zone’s final June CPI reading of 0.2% growth followed a 0.1% rise in May. Year-on-year, June CPI rose 1.3%.

In the UK, June CPI was reported flat following 0.3% May growth. Year-on-year, CPI rose 2%.

Tonight in the US, the Philadelphia Fed’s manufacturing index, the Conference Board’s June leading index and weekly new unemployment claims are due.

Elsewhere, UK June retail sales are keenly anticipated, and G7 finance ministers and central bankers continue talks in France.

Companies scheduled to report earnings include: American Express, E*Trade, Honeywell, Microsoft, Morgan Stanley, Novartis, PayPal, SAP, Sports Direct (full year), Taiwan Semiconductor, Travelers and United Health.

In overnight corporate news, rail freight specialist CSX reduced its full-year revenue expectations after undershooting quarterly profit expectations, attributing a fall in road and rail freight volumes to trade relationship issues. The stock was pushed ~10% lower, with other freight companies also suffering.

Netflix reported post-US trade, and a slide in new subscriber numbers has pushed after-trade prices 10% lower.

Earlier, Bank of America was rewarded with an ~1% rise after exceeding quarterly profits, in part attributed to interest income.
 
Posted on 18/07/2019 8:00:00 AM

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