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Global Market Report - 3 September

Lex Hall  |  03 Sep 2018Text size  Decrease  Increase  |  
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Australia

Australian shares look set to open higher after Wall Street ended last week down as Canada and the US concluded trade talks without resolution, while fresh domestic economic data could also prompt the market.

In futures trading, the SPI200 futures contract was up 26 points, or 0.41 per cent, to 6330 points at 8.30am Sydney time. The Australian dollar is buying 71.92 US cents, from 72.55 US cents on Friday.

On Wall Street, the Dow Jones Industrial Average was 22.1 points, or 0.09 per cent at 25,964 points on Friday, while the S&P500 was up 0.39 points or 0.01 per cent at 2901 points.

The tech-heavy NASDAQ index was up 21.17 points or 0.26 per cent at 8109 points.
Talks between Canada the US to renegotiate the North American Free Trade Agreement ended on a sour note as the two sides were unable to reach a deal going into the Labour Day weekend, according to the Wall Street Journal.

Meanwhile, an influx of fresh domestic economic data could also prompt the market this week, with retail sales for July and Ai Group Australian Performance Manufacturing index to be released on Monday.

The Reserve Bank of Australia will hold a policy meeting on Tuesday, and second quarter GDP data will be released on Wednesday.

Elsewhere, the latest quarterly Rabobank Rural Confidence Survey found Australian farmer confidence levels are the lowest since 2006, during the devastating millennium drought.

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More than half of farmers surveyed had a pessimistic view on the 12 months ahead, expecting economic conditions to deteriorate over the next 12 months, significantly up from 35 per cent in the June quarter.

And new Prime Minister Scott Morrison is digging in behind the Paris climate change targets, despite calls for Australia to walk away from the global accord.

Asia

Japan's Nikkei ended flat on Friday, snapping an eight-day rally after Trump's threat to ratchet up a trade war with China.

The Nikkei share average ended 0.02 per cent, or 4.35 points, lower at 22,865.15 points, after rising eight consecutive sessions.

The benchmark index hit the psychologically important mark of 23,000 this week, but failed to stay above that level at the market close.

China stocks fell amid the trade war fears and despite fresh foreign money inflows ahead of the second leg of China's MSCI inclusion on Monday.

The CSI300 index fell 0.5 per cent to 3334.50 points, while the Shanghai Composite Index dropped 0.5 per cent to 2725.25 points.

There was a sudden flow of money into Chinese stocks from Hong Kong via the Stock Connect scheme during the final three minutes of trading.

Hong Kong stocks ended lower, falling for four months in a row, with risk appetite curbed by renewed trade war fears. Sentiment was also hurt by a slump in index heavyweight Tencent, as Beijing's proposed tougher measures against online gaming hit game operators.

The Hang Seng index fell 1.0 per cent, to 27,888.55, while the China Enterprises Index lost 0.8 per cent, to 10,875.58 points.

Europe

European shares fell for a second day amid the Trump trade threats. Europe's STOXX posted its worst monthly performance since February.

The pan-European STOXX 600 closed down 0.8 per cent. Germany's DAX, heavier in trade-sensitive industrial stocks, fell 1 per cent.

All sectors except one were in negative territory. Sparring over trade between Trump and the EU weighed on car stocks, down 1.6 per cent and the worst-performing sector.

North America

The S&P 500 ended flat on Friday while the Dow edged down and the Nasdaq closed higher in light trading as Canada and the US concluded trade talks without resolution ahead of the Labor Day weekend.

Capping a low-volume, late-summer week marked by tariff-related volatility, all three major US indexes posted net gains for the period.

The indexes were also up for the month of August, with the Nasdaq posting its largest monthly gain since January.

In recent days trade jitters abated as Mexico and the US reached a bilateral deal, but re-emerged later in the week following a report that US President Donald Trump is prepared to impose tariffs on an additional $US200 billion of Chinese imports as soon as next week.

Amazon's shares continued to inch upward, rising 0.5 per cent as investors watch the company close in on its $US1 trillion market share milestone.

Apple closed up 1.2 per cent, reaching a new closing high for the fifth straight session.

Of the 11 major sectors in the S&P 500, five closed lower.

Coca-Cola agreed to buy the coffee chain Costa from Britain's Whitbread for $US5.1 billion ($7.1 billion). Its shares dipped 0.8 per cent.

Tesla had a fifth consecutive decline following news that fund manager BlackRock voted in favour of replacing Elon Musk with an independent chairman.

Gun-maker American Outdoor Brands was the top percentage gainer on the Nasdaq. The stock soared 43.6 per cent after its upbeat earnings report. Peer Sturm Ruger shares jumped 7.3 per cent.

Chipotle Mexican Grill shares extended their loss, dipping 1.8 per cent after William Ackman's Pershing Square cut its stake in the burrito chain.

Ford Motor Co dropped 2.3 per cent after scrapping a plan to sell a Chinese-made small vehicle in the US due to tariff concerns.

 

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Lex Hall is content 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

© 2021 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 'regulated financial advice' under New Zealand law has 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. For more information, refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. 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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