Global Market Report - May 8, 2018
The local share market is expected to open higher after solid gains on Wall Street, particularly Apple, which posted its sixth day of gains, prompting Warren Buffett to say "I'd love to own 100 per cent of it".
Australia
The local share market is expected to open higher after solid gains on Wall Street.
At 7am (AEST), the Australian share price futures index was up 20 points, or 0.33 per cent, at 6084 points.
The S&P 500 index in the US was up 0.35 per cent as energy stocks were boosted by US crude oil prices hitting $US70 per barrel for the first time since late 2014, while technology shares were lifted by Apple’s sixth day of gains.
The Australian share market yesterday closed higher, as booming oil prices led the gains, particularly among mining and energy stocks.
The benchmark S&P/ASX200 closed up 21.6 points, or 0.36 per cent, at 6084.5 points, while the broader All Ordinaries index was up 20.2 points, or 0.33 per cent, at 6175.6 points.
Out today: the Australian federal budget; the ABS retail spending figures for March, and the weekly ANZ-Roy Morgan Consumer Confidence survey.
Asia
Most Asia markets firmed on Monday after a tame reading on US wages lessened the risk of faster rate hikes by the Federal Reserve, although Sino-US trade tensions and a looming deadline for an Iranian nuclear deal lurked in the background.
MSCI's broadest index of Asia-Pacific shares outside Japan put on 0.2 per cent, while Chinese blue chips rose 1.2 per cent.
Out this the week: key readings on the health of the Chinese economy, as well as the latest data on US consumer price inflation.
Europe
The surge in crude oil prices has lifted energy stocks in Europe.
European shares are also getting support from strong company earnings results and gains in Nestle after the Swiss company agreed to pay $US7.15bn to Starbucks in a global coffee alliance.
Germany’s DAX 30 index was up 1 per cent, France CAC 40 gain 0.28 per cent, and the London Stock Exchange was closed for a bank holiday.
The euro broke below $1.19 for the first time this year on weaker-than-expected German industrial orders and declining eurozone investor sentiment.
Investors increased bets that rising US interest rates would continue to boost the dollar, while traders unwound their bearish positions on the greenback.
An index that tracks the US dollar against a basket of leading currencies climbed to 92.974, its highest since December.
North America
Wall Street climbed on Monday, boosted by Apple's sixth straight day of gains and by a surge in oil prices to their highest since 2014.
The S&P energy index ended 0.18 per cent higher, although it surrendered earlier stronger gains after US President Donald Trump tweeted that on Tuesday he would announce his decision on whether to withdraw from the Iran nuclear deal.
Trump has threatened to withdraw from the agreement, which provided Iran with relief from sanctions in exchange for limiting its uranium enrichment capacity, unless European signatories to the accord fix what he has called its shortcomings.
Energy stocks rallied earlier in the session due to troubles for Venezuelan oil company PDVSA and by the looming decision on whether the US will re-impose sanctions on Iran.
Apple added 0.72 per cent, extending gains since it reported results last week and after Berkshire Hathaway on Friday disclosed it had boosted its stake in the iPhone maker. Warren Buffett told CNBC on Monday, "I'd love to own 100 per cent of it."
Worries over inflation and interest rates, along with tariff and geopolitical tensions, have overshadowed a solid earnings season, which is on track to record its best quarter in seven years.
The Dow rose 94.81 points, or 0.39 per cent, to end at 24,357.32, while the S&P 500 gained 9.21 points, or 0.35 per cent, to 2672.63. Earlier, the S&P 500 was up as much as 0.75 per cent.
The Nasdaq Composite added 55.6 points, or 0.77 per cent, to 7265.21.
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Lex Hall is a Morningstar content editor, based in Sydney.
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