Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Global Market Report - 17 July

Lex Hall  |  17 Jul 2020Text size  Decrease  Increase  |  
Email to Friend


Shares are tipped to rise early in trade on the Australian market, despite US markets closing lower on rising unemployment figures.

The Australian SPI 200 futures contract was up by 14.0 points, or 0.23 per cent, to 5,990.0 points at 8am Sydney time on Friday.

In the US, 1.3 million workers filed for unemployment benefits last week, largely due to coronavirus restrictions and impact. This was a weaker improvement than economists expected.

There were 32 million Americans on unemployment benefits.

Other reports were more encouraging, with sales at stores and online last month growing more strongly than economists expected, particularly for clothing.

But the relentless rise of coronavirus counts across much of the United States has been pulling markets lower, threatening to undo all the improvements.

Technology stocks slumped, while banks continued to ride the momentum of good earnings reports earlier this week.

Investing Compass
Listen to Morningstar Australia's Investing Compass podcast
Take a deep dive into investing concepts, with practical explanations to help you invest confidently.
Investing Compass

The Dow Jones Industrial Average fell 0.5 per cent to end at 26,734.71 points, while the S&P 500 lost 0.34 per cent to 3,215.57. The Nasdaq Composite dropped 0.73 per cent, to 10,473.83.

In Australia on Friday, investors will be watching daily coronavirus case numbers in NSW and Victoria and hoping no more restrictions are ordered.

NSW health authorities are continuing efforts to trace people infected from an outbreak in Sydney's south-west. There have been at least 40 cases linked to the outbreak, which began at a hotel.

Melbourne residents are in a six-week lockdown, but could face more severe limits if case numbers do not fall. Victoria recorded 317 covid-19 cases on Thursday, Australia's biggest daily increase in coronavirus cases.

In better news for the nation, the Northern Territory will re-open its borders to some parts of Australia for the first time since the coronavirus forced their closure nearly four months ago.

The Australian dollar was trading at 69.69 US cents at 8am, down from 69.92 US cents at Thursday's close.


Chinese shares slumped by the most in more than five months on Thursday as a bull run that had pushed the country’s benchmark indexes to multi-year highs reversed sharply amid renewed Sino-US tensions.

At the close, the Shanghai Composite index was down 4.5 per cent at 3,210.10, and the blue-chip CSI300 index plunged 4.81 per cent, the sharpest one-day percentage fall for both indexes since 2 February.

Hong Kong shares fell the most in more than a month, weighed down by concerns about policy tightening after China posted a better-than-expected economic rebound in the second quarter and as Sino-US relations deteriorated.

At the close of trade, the Hang Seng index was down 510.89 points or 2 per cent at 24,970.69.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.76 per cent, while Japan’s Nikkei index closed down 0.76 per cent.


European shares ended off session lows on Thursday ahead of a keenly awaited meeting to organise a European recovery fund, after weak earnings and a growing number of covid-19 cases had earlier pushed stocks down from one-month highs.

European Central Bank chief Christine Lagarde kept policy steady, as expected, and said the bank expected a pending European Union stimulus scheme to favour grants over loans, as hoped by investors. The bank expects to fully use its huge pandemic stimulus package to help the euro zone stay afloat, she added.

Leaders of the 27 EU states are due to meet on Friday to try to hammer out their differences over how the 750 billion euro ($1.2 billion) recovery fund will operate.

The pan-European STOXX 600 closed down 0.7 per cent after falling as much as 1 per cent during the session. Germany's DAX and France's CAC 40 both cut session losses to end about 0.4 per cent lower.

Italy's FTSE MIB turned positive, boosted by gains in Telecom Italia and Intesa Sanpaolo Intesa is very confident of a positive outcome to its bid for smaller rival UBI Banca, a company executive said.

Meanwhile, as the number of covid-19 cases continued to rise in the US, worries over the economic damage from another round of containment measures persisted.

Unexpected weakness in domestic consumption in China, Europe’s major trading partner, and heightened tensions between Washington and Beijing also weighed.

European luxury goods group Richemont fell 4.6 per cent as its quarterly sales almost halved, and it gave no details on current trading or the outlook.

Shares in peers LVMH and Kering, which also rely on China for a large portion of their revenue, fell 1 per cent and 1.3 per cent respectively.

At the bottom of STOXX 600 were shares of Swedish Orphan Biovitrum after the rare diseases specialist’s second quarter results missed expectations, while Sandvik, the world’s biggest maker of metal-cutting tools, slumped after flagging a slow recovery in demand.

In contrast, German lab equipment maker Sartorius jumped 6.3 per cent after raising its full-year forecast.

North America

The S&P 500 dropped on Thursday, pulled lower by Microsoft Corp and Apple Inc, as elevated levels of unemployment claims heightened concerns about the economic toll from rising coronavirus cases.

US retail sales increased more than expected in June, but a resurgence in new covid-19 cases is undercutting the budding recovery, keeping 32 million Americans on unemployment benefits.

A jump in cases of the virus has forced California and other states to shut down again, sparking fears of more business damage and slowing the pace of a Wall Street rally. The S&P 500 is about 5 per cent below its February record high.

The S&P real estate and technology indexes each lost more than 1 per cent, more than any others.

Apple declined 1.2 per cent and Microsoft lost 2 per cent, each weighing more than any other company on the S&P 500.

The S&P 500 has exceeded the Nasdaq by nearly 3 percentage points over the past week, its greatest five-day outperformance over the Nasdaq since late March, reflecting a shift away from Amazon.com, Microsoft and other major technology companies that have led Wall Street’s gains in recent months.

Twitter Inc fell 1.1 per cent after hackers accessed its internal systems to hijack some of the platform’s top voices, including US presidential candidate Joe Biden, reality TV star Kim Kardashian West, former US President Barack Obama and billionaire Elon Musk and used them to solicit digital currency.

In extended trade, Netflix tumbled 10 per cent after the streaming video service’s quarterly report.

The Dow Jones Industrial Average fell 0.5 per cent to end at 26,734.71 points, while the S&P 500 lost 0.34 per cent to 3,215.57.

The Nasdaq Composite dropped 0.73 per cent, to 10,473.83.

Rounding up earnings reports of big banks, Bank of America Corp fell 2.7 per cent after its second-quarter profit more than halved, while Morgan Stanley rose 2.5 per cent after posting a record quarterly profit.

American Airlines tumbled 7.4 per cent after it sent 25,000 notices of potential furloughs to frontline workers and warned that demand for air travel is slowing again.

Tesla Inc declined nearly 3 per cent after its vehicle registrations nearly halved in the US state of California during the second quarter, according to data from a marketing research firm.

is senior editor for Morningstar Australia

AAP logo

© 2022 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend