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
About

News

Global Market Report - July 25, 2018

Lex Hall  |  25 Jul 2018Text size  Decrease  Increase  |  
Email to Friend

Australia

Australian shares look set to open higher as investors await second-quarter CPI data and following gains on Wall Street overnight, where expectations of a robust earnings season were bolstered.

In futures trading, the SPI200 futures contract was up 16 points, or 0.26 per cent, to 6216 points at 8.30 Sydney time. The Australian dollar was buying 74.23 US cents, up from 73.62 US cents on Tuesday as the greenback slipped against other major currencies - a move that helped lift the spot gold price overnight.

Meanwhile, investors should short the Aussie versus the yen as increasing global-trade tensions weigh on the nation’s exports, according to CIMB Bank Bhd. The currency is also poised to decline versus the US dollar, says CIMB, which had the most accurate estimates for the Aussie in Bloomberg’s second-quarter rankings.

With the local earnings season yet to get under way in earnest, investors could be cheered by the overnight lead from the US along with a big lift in copper prices that could benefit miners.

Eyes will also be on the Australian Bureau of Statistics' consumer price index for the June quarter, with data - seen as key in the Reserve Bank's setting of the cash rate - due at 11.30 Sydney time.

On Wall Street the Dow Jones Industrial Average closed up 197.65 points, or 0.79 per cent at 25,241 points, while the S&P500 has closed at its highest level since 1 February, up 13.42 points or 0.48 per cent at 2820 points as Alphabet's blowout results boosted earnings season expectations.

The tech-heavy Nasdaq index closed flat at 7840 points.

Asia

The CSI 300 Index of mainland stocks climbed 1.6 per cent Tuesday, capping its biggest three-day gain since mid-August 2016, when economic indicators vindicated China’s moves to stabilize a slowdown back then.

While there’s no guarantee of success this time, with the X-factor of a trade dispute with the US at play, traders are betting big.

The rally looked to continue Wednesday, with futures on the FTSE China A50 rising 0.6 per cent. The offshore yuan is holding near the weakest in more than a year against the dollar after Monday's record injection of funding to lenders by the People’s Bank of China.

Benchmark 10-year government bond yields have risen from the lowest since April 2017.

Japan’s Nikkei share average bounced on Tuesday, trimming losses from the previous day as the yen’s rally stalled and shored up exporters, while upbeat forecasts lifted shares such as Showa Shell and Ono Sokki as the earnings season got under way.

The Nikkei ended the day up 0.51 percent at 22,510.48.

Europe

Strong results from bank UBS, car company PSA and chipmaker AMS propelled European stocks higher on Tuesday, breaking a three-day slide as the earnings season delivered a boost to the market.

Some of this year’s worst-performing sectors - autos and banks - jumped thanks to these solid updates.

The pan-European STOXX 600 accelerated gains to touch its highest level in more than a month, ending up 0.9 percent, with heavyweight UBS among the biggest boosts, up 4.3 per cent after its second-quarter profit topped expectations.

Gains in UBS boosted the banks sector .SX7P up 2.2 percent, with Credit Suisse, Italy's Unicredit and Spain’s BBVA climbing 2.2 to 3.6 per cent.

PSA Group jumped nearly 15 per cent after the Peugeot owner reported strong profits thanks to a turnaround at its newly acquired Opel-Vauxhall division.

London's FTSE100 rose 0.7 per cent, France's CAC 1.0 per cent, and the German DAX was up 1.1 per cent.

North America

The S&P 500 has closed at its highest level since 1 February as Alphabet's blowout results bolstered expectations of a robust earnings season.

Alphabet shares touched a record high of $1275.00 after the online search company's quarterly results surpassed Wall Street estimates. The shares closed up 3.9 per cent at $1258.15.

Google's parent company was the biggest boost to the S&P 500. Others in the FANG group of momentum stocks rose as well. Shares of Facebook and Amazon were up 1.8 per cent and 1.5 per cent, respectively. Both companies report earnings later this week.

The Dow Jones Industrial Average rose 197.65 points, or 0.79 per cent, to 25,241.94, while the S&P 500 gained 13.42 points, or 0.48 per cent, to 2820.4.

The Nasdaq Composite dropped 1.11 points, or 0.01 per cent, to 7840.77. It reversed course after having hit a record high earlier in the session.

So far in 2018, the Nasdaq has climbed 13.6 per cent, more than twice the 5.5 per cent gain of the S&P 500. Some investors said the Nasdaq's reversal indicated some profit-taking driven by lingering concerns over trade issues. Earlier on Tuesday, US President Donald Trump extolled tariffs in a post on Twitter.

Agriculture-related stocks gained on news that the Trump administration plans to announce aid for US farmers to help protect them from potential impacts related to the trade war between the United States and other countries.

Deere & Co shares rose 3.2 per cent, while shares of Caterpillar advanced 1.2 per cent. AGCO Corp shares edged up 0.6 per cent.

Harley-Davidson climbed 7.7 per cent after its profit beat estimates and the company forecast a lower-than-expected hit to margins from tariffs.

Whirlpool Corp tumbled 14.5 per cent to a more than two-year low after reporting weak quarterly results and cutting its full-year forecasts.

 

More from Morningstar

CBA has its affairs in house, says Morningstar

Too many active managers in Australia, says ETF pioneer

Make better investment decisions with Morningstar Premium | Free 4-week trial

 

Morningstar with AAP, Reuters and Bloomberg 

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 content 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 '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.

Email To Friend