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Global Market Report - 22 August

Glenn Freeman  |  22 Aug 2018Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open lower, as political turmoil following yesterday's unsuccessful spill motion against Prime Minister Malcolm Turnbull took a heavy toll on local markets.

Australia's share market yesterday fell 60.6 points, 1 per cent - the biggest one-day fall in around five months.

The Australian dollar also fell yesterday, hitting a low of $73.33 before rebounding slightly to close at 73.66 US cents.

US stocks rose on earnings reports in the consumer sector and relative calm in the trade dispute between the United States and China.

In futures trading, the SPI 200 futures contract was down 20 points, or 0.32 per cent, to 6,239 points at 7am, pointing to a lower open for the Australian stock market today.

The tech-heavy NASDAQ index is up 38.17 points or 0.49 per cent at 7,859 points.

ASIA

Asian stocks headed for a largely mixed open on Wednesday.

Japan’s Nikkei overcame recent losses and edged up, after a weakening of the yen spurred futures purchases, but mobile phone carriers tumbled after a media report cited a Japanese official as saying the industry needs reform.

The Nikkei share average, which was down for much of Tuesday, ended the day 0.1 percent higher at 22,219.73.

The US dollar fell below a psychologically important 110 yen level for the first time since 28 June, after US President Donald Trump criticised the Federal Reserve for raising interest rates.

But in the afternoon, the dollar recovered to trade at 110.04 yen, leading investors to buy futures. Index-heavyweight Fast Retailing rose 2.3 percent for the day, adding a hefty 42 points to the Nikkei benchmark.

EUROPE

European shares closed slightly higher yesterday, ahead of the US-China trade talks – scheduled to take place in Washington on Wednesday – which global investors have are cautiously optimistic.

The pan-European STOXX 600 index closed up 0.3 percent.

Gains were made across most sectors, particularly in oil and gas stocks, which posted the best performance as oil prices hit a weekly high, on the back of anticipated supply restrictions and further price support from US sanctions on Iran.

Though the company earnings season is largely over in Europe, John Wood Group was among the top STOXX gainers, up 7.6 percent on positive earnings report.

Peer Saipem gained more than 6.9 percent after winning contracts from Exxon Mobil.

A weaker dollar weighed on companies that make much of their revenue overseas, such as British American Tobacco, down 2.4 percent, and Heineken, down 0.7 percent.

NORTH AMERICA

The S&P 500 climbed to yet another intraday high of 2,873.23 yesterday, as the record nine-and-a-half year bull market becomes, by some measures, the longest in history.

The S&P 500 yesterday closed about 10 points away from record ground – though during the day topped its previous record high of 2,872.87, set on Jan. 26.

Late in the day, stock market futures fell after President Trump’s former personal lawyer, Michael Cohen, pleaded guilty to campaign finance violations and other charges.

Trade-sensitive industrial stocks rose for the fourth consecutive session as investors remained optimistic on the prospect of easing US-China trade tensions. The S&P 500 industrial index rose 0.8 percent.

The S&P consumer discretionary index climbed 0.9 percent as shares of off-price retailer TJX Companies Inc rose on strong results and Toll Brothers Inc’s encouraging quarterly report boosted shares of homebuilders.

The Dow Jones Industrial Average .DJI rose 63.6 points, or 0.25 percent, to 25,822.29, the S&P 500 .SPX gained 5.91 points, or 0.21 percent, to 2,862.96 and the Nasdaq Composite .IXIC added 38.17 points, or 0.49 percent, to 7,859.17.

The small-cap Russell 2000 indexj, less affected by global tariff disputes than its large-cap peers, ended the session up 1.1 percent at a record closing high.

The S&P 500 energy index .SPNY rose 0.5 percent and the S&P 500 materials index .SPLRCM gained 0.4 percent, in tandem with higher prices for oil and metals.

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Morningstar with AAP, Reuters and Bloomberg 

Glenn Freeman is senior editor, Morningstar Australia

© 2018 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

 

is senior editor for Morningstar Australia

© 2020 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

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