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Global Market Report - April 30, 2018

Lex Hall  |  30 Apr 2018Text size  Decrease  Increase  |  
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AUSTRALIA

The local market is expected to open steady this morning as it braces for corporate results and shareholder meetings. The Australian dollar rallied towards 76 US cents whereas its US counterpart showed more sluggishness in part because of weaker 1Q growth data. The yield on the 10-year US Treasury note dipped to 2.96 per cent.

Meanwhile, embattled AMP chairman Catherine Brenner is facing growing calls to resign ahead of the company's May 10 AGM. Other events this week: Origin reports results today. ANZ tomorrow, Woolworths on Wednesday, NAB on Thursday and Macquarie on Friday.

Further falls are expected in the banks following damning revelations from the royal commission. Macquarie wealth management reports that offshore investors were net sellers of the banks. ANZ, NAB, Westpac expect interim numbers this week to show lower mortgage credit growth.

CBA to face APRA report into culture and governance RBA meets tomorrow: expected to keep rates on hold; economists tip RBA to hold the rate steady at 1.5pc until 2020 Companies holding investor days or annual meetings this week include Transurban,

Aristocrat Leisure, GPT Group, Rio Tinto, QBE, Janus Henderson and Sydney Airport. Qantas will release a trading update on Wednesday.

Local data: MI inflation April; Private sector credit March; NZ ANZ business confidence April.

ASIA

Asian shares rose on Friday, while markets in Seoul were underpinned by optimism as leaders of North and South Korea held their first summit in over a decade. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 per cent, but still looked set to shed 0.9 per cent for the week. South Korea’s KOSPI briefly rose more than 1 per cent to a one-month high, helped by hopes that the summit could ease tensions over Pyongyang’s nuclear weapons programme and pave the way for the North and South to end their decades-long conflict.

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South Korean equities later pared their gains to 0.8 per cent, while the South Korean won rose more than 0.5 per cent against the dollar in onshore trade. Japan’s Nikkei share average rose 0.7 per cent and touched a two-month peak at one point, getting a boost as chip-related firms rallied after brisk earnings forecasts from Advantest and Kyocera.

EUROPE

British shares climbed on Friday after weaker than expected GDP data triggered a slide in sterling, while Royal Bank of Scotland shares fell after its 1Q results. UK growth slowed much more sharply than expected in the first quarter, sending the pound to a two-month low against the dollar and slashing the market’s expectations the Bank of England will raise interest rates in May.

Sterling’s fall boosted multinational dollar-earners on the FTSE 100, helping it jump 1.09 per cent to its highest since February 1, just before a rolling global sell-off spread across markets. On the mainland, Germany’s DAX 30 index was up 0.64 per cent, France’s CAC 40 rose 0.54 per cent.

UK-listed consumer staples stocks, which overwhelmingly make earnings in dollars and translate them back into sterling, all made gains as the pound fell. Diageo, Unilever, British American Tobacco and Imperial Brands all rose 1.6 to 2.9 per cent, the biggest boosts to the FTSE. Burberry also gained 3.1 per cent.

The index of major UK companies sealed its fifth straight week of gains, its longest winning streak since January.

NORTH AMERICA

Wall Street closed nearly flat on Friday as inflation fears and struggling tech and energy stocks were offset by an advance in the consumer discretionary sector led by Amazon.

The S&P 500 and the Nasdaq eked out small gains while the Dow edged into negative territory by the end of the session. All three major US indexes were down for the week at the end of a choppy session, ending two-week winning streaks. Growth in the US economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years, according to the Commerce Department. But a jump in wages and lower tax rates suggested the setback could be temporary.

The Dow Jones Industrial Average fell 11.15 points, or 0.05 per cent, to 24,311.19, the S&P 500 gained 2.97 points, or 0.11 per cent, to 2669.91 and the Nasdaq Composite added 1.12 points, or 0.02 per cent, to 7119.80.

More than half of the S&P 500 companies have reported first-quarter earnings already, 79.4 per cent of which have beat consensus estimates. Analysts now expect 1Q earnings growth of 24.6 per cent, more than double expectations at the beginning of the year, according to Thomson Reuters data.

 

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Lex Hall is a Morningstar content editor, based in Sydney

© 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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