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Global Market Report - July 11, 2018

Lex Hall  |  11 Jul 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is tipped to open higher after Wall Street stocks closed at a six-month high although US equity futures have since dropped as the market braces for Donald Trump's list of $200 billion tariffs on China.

US stocks erased earlier gains after Bloomberg reported the tariff list could be announced on Tuesday. Earlier, the Dow Jones Industrial Average is up 143.07 points, or 0.58 per cent at 24,919 points.

The Australian futures index was up 16 points to 6227 at 8.30am Sydney time. The Australian dollar is buying US74.57c, slightly down on yesterday.

The Australian share market yesterday snapped its three-day winning streak, hit by losses in the big four banks and consumer-exposed stocks.

The benchmark S&P/ASX200 index dropped 27.9 points, or 0.44 per cent, at 6258.1 points after hitting a new 10 1/2 year high of 6306.1 points in the first 10 minutes of trade, while the All Ordinaries index fell 23.6 points, or 0.37 per cent, to 6342.8 points.

Out today: Housing data for May, set to remain soft. Westpace/MI consumer survey for July, likely to show consumer conditions running around average levels. 

Asia

India has become the world’s sixth-biggest economy, pushing France into seventh place, according to updated World Bank figures for 2017.

India’s gross domestic product (GDP) amounted to $2.597 trillion at the end of last year, against $2.582 trillion for France.

India’s economy rebounded strongly from July 2017, after several quarters of slowdown blamed on economic policies pursued by Prime Minister Narendra Modi’s government.

Europe

Europe followed most of Asia higher after another strong lead from New York.

Wall Street moved ahead on Tuesday, adding momentum to key European markets which all closed in the green, although London was held back by the recovering pound.

Frankfurt's gains came despite a gloomy ZEW survey showing that German investor confidence had plunged sharply in July.

The FTSE edged 0.1 per cent higher, Frankfurt's DAX 30 climbed 0.5 per cent and the CAC 40 in Paris added on 0.7 per cent.

North America

Wall Street's S&P 500 index rose for a fourth session to post its highest close since February 1, the day before the market began a sharp extended selloff, as strong results from PepsiCo boosted optimism about the earnings season.

The benchmark index is now up 4.5 per cent since the end of 2017, rising about 3 per cent in the four sessions, helped by upbeat news on the economy and earnings.
Worries over rising bond yields and potentially firming inflation drove the early February selloff, which confirmed a correction for the market.

Earnings are expected to become key for investors in the coming weeks as the US reporting period kicks into high gear, but that may change with the publication of the tariffs list.

The Dow Jones Industrial Average rose 143.07 points, or 0.58 per cent, to 24,919.66, the S&P 500 gained 9.67 points, or 0.35 per cent, to 2793.84 and the Nasdaq Composite added 3.00 points, or 0.04 per cent, to 7759.20.

PepsiCo's shares surged after the company's quarterly results topped estimates on strong sales of snacks. The company also reaffirmed its full-year forecast amid signs of a gradual recovery in its soda business.

Overall, S&P 500 companies are expected to post second-quarter profit growth of about 21 per cent, slightly higher than what was forecast in April, according to Thomson Reuters data.

Investors are still, however, expected to parse quarterly reports to gauge the impact of an escalating trade dispute between China and the US on company earnings.

Also boosting the S&P on Tuesday, utilities and telecom indexes rose about one per cent each, bouncing back from Monday's losses.

Higher oil prices lifted energy shares. The S&P energy index rose 0.7 per cent as crude oil prices gained on growing supply disruptions in Norway and Libya, but gains were pared after the US said it would consider requests for waivers from Iranian oil sanctions.

 

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Morningstar with AAP

Lex Hall is a Morningstar content editor, based in Sydney.

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