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Global Market Report - June 1, 2018

Lex Hall  |  01 Jun 2018Text size  Decrease  Increase  |  
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Australia

The local market is set to open lower following weak leads on Wall Street as it grapples with the Trump administration's move to impose immediate tariffs on metal imports from trading partners Canada, Mexico and the EU.

At 8.30am (AEST) the futures index was down seven points to 6009. The Australian dollar is buying 75.69 US cents.

The S&P 500 fell for the fourth time in five days, paring a monthly advance as Donald Trump's trade action against allies Canada, Mexico and the EU buffeted American industrial and financial stocks.

Locally, the Australian benchmark S&P/ASX200 index closed up 0.45 per cent, at 6011.9 points, and the All Ords finished up 0.49 per cent at 6123.5 points.

The energy sector was the star of the local market yesterday after oil prices rebounded from a four-day slump and Russia's central bank expressed caution on plans to boost oil supply.

Out today: AiG performance of manufacturing May; CoreLogic house prices May.

Asia

Asian stocks rebounded from a two-month trough on Thursday as the political turmoil in Italy that roiled global financial markets showed signs of easing.

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Hong Kong's Hang Seng rose 1.37 per cent and the Shanghai Composite Index gained 1.78 per cent after news that growth in China's vast manufacturing sector accelerated strongly and well above forecasts in May to an eight-month high.

South Korea's KOSPI added 0.6 per cent and Japan's Nikkei advanced 0.8 per cent.

Europe

Britain's top share index ended May as the month's best-performing major European index, shrugging off worries over a political crisis in Italy as commodities-related stocks rallied.

The blue chip FTSE 100 index ended the day down 0.2 per cent at 7,678.2 points, while mid-caps rose 0.1 per cent. A fall in financial stocks weighed on the market on the day as Deutsche Bank shares tumbled

Germany's DAX 30 index closed 1.4 per cent lower, and stocks in France were down 0.53 per cent.

UK stocks were caught up earlier this week in a broader market sell-off as a political crisis deepened in Italy, which has had trouble forming a government since inconclusive elections in March.

The impact on the FTSE has however been limited. The index ended May up 2.2 per cent while eurozone stocks fell 2.5 per cent over the course of the month. The FTSE 100 and its mid-cap counterpart the FTSE 250 both reached record highs earlier in May.

More broadly, investor sentiment on British stocks has become more optimistic in recent weeks.

North America

US stocks fell on Thursday after the tariff moves, prompting retaliatory measures from some of America's trading partners.

US Commerce Secretary Wilbur Ross said a 25 per cent tariff on steel imports and a 10 per cent levy on aluminum imports from its allies would take effect on Friday.

Mexico responded by imposing measures on US farm and industrial products, targeting pork legs, apples, grapes and cheeses, as well as steel.

Canada said it would impose retaliatory tariffs on $US12.8 billion worth of US exports and challenge the steel and aluminum tariffs under the North American Free Trade Agreement and the World Trade Organisation.

The S&P 500 Packaged Foods and Meats index dipped 1.8 per cent, with all its 11 components in the red. Kraft Heinz Co and Mondelez International Inc were the biggest drags on the index.

The Dow Jones Industrial Average fell 1.02 per cent to 24,415.84, the S&P fell 0.69 per cent to 2705.27 and the Nasdaq Composite fell 0.27 per cent, to 7442.12.

The market-moving US jobs report is out on Friday, with a forecast increase in non-farm jobs of 190,000 for May; the unemployment rate is tipped to remain unchanged at 3.9 per cent.

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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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