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Global Market Report - May 7, 2018

Lex Hall  |  07 May 2018Text size  Decrease  Increase  |  
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Australia

The local market is expected to open higher today after stocks soared on Wall Street with the release of strong job figures and a stellar Apple result on the back of praise from Warren Buffett.
The local share price ended a week of gains slightly lower due to market jitters ahead of unemployment figures out of the US.
The S&P/ASX200 index fell 0.58 per cent on Friday to finish at 6062.9 points while the broader All Ordinaries was down 0.51 per cent.
The strong US jobs figures rallied the Greenback and caused global currencies to soften with the Australian dollar falling to around US75.29 cents. Australians can also expect to pay more for petrol as oil hit its highest price in three years.
Housing figures released on Friday showed a decline due to uncertainty in consumer spending, falling house prices in Sydney and Melbourne and national underemployment at 8.5 per cent.
But bank shares are steady despite a tightening on home mortgage lending and the furore over further revelations from the banking royal commission.
Out today: CoreLogic weekly capital city house prices are due out, and the Australian Industry Group releases its performance of construction index.
Westpac releases its half-year results, and Orica half-year results are due out.
Otherwise the main focus this week is the federal budget, expected to boost shares slightly after the government flagged better than expected revenue and tax cuts for lower income earners.

Asia

Asian shares fell on Friday while the dollar ran into some profit-taking after several weeks of strong gains as financial markets turned their attention to looming US payrolls data for fresh catalysts. Regional trading was relatively quieter as Japan was on holiday.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5 per cent, and looked set for a third straight weekly loss.
Indonesian stocks led the declines, falling as much as 1.5 per cent in early trading before recouping some of those losses, and South Korean shares were down 1 per cent.

Europe

Britain’s leading stock index was lifted by strong results from British Airways owner IAG, while HSBC joined French banks in reporting weaker profit which hit its shares.
A weak pound, which gives an accounting boost to companies whose earnings are in US dollars, also helped Britain’s FTSE 100 to close up 0.86 per cent on the day.
The index has risen sharply in recent weeks, though it is still underperforming European peers. It is up about 10 per cent since hitting 15-month lows at the end of March, and marked its sixth straight week of gains.
In Germany, the DAX 30 index was up 1.02 per cent, and France’s CAC 40 gained 0.26 per cent.
IAG was up 5.8 per cent and near a four-month high after a 75 per cent jump in quarterly profit.
However, it gave no update on potential takeover of low-cost competitor Norwegian Air, whose shares fell about 10 per cent. AG said in an investor presentation that it had had contact with the Norwegian board regarding a possible offer, without reaching an agreement.

North America

The three major US stock indexes rose more than 1 per cent on Friday after weaker-than-expected US wage growth helped to calm investor fears about rising interest rates and inflation, though the S&P 500 and Dow Industrials still posted losses for the week.
Apple provided the biggest boost as it jumped to a record high of $US184.25 during the session after Warren Buffett’s Berkshire Hathaway disclosed it had raised its stake in the iPhone maker.
Apple shares ended Friday’s session up 3.9 per cent at $US183.83. The company’s stock surged to its greatest weekly per centage gain since October 2011.
At the market open, US stocks had fallen after the Labor Department reported the US unemployment rate dropped to near a 17½ low of 3.9 per cent.
The S&P 500 bounced off its 200-day moving average, a technical level that indicates the long-term trend.
US stocks climbed as the session progressed. Investors said that the low unemployment figure, which on its own might point to inflationary pressure on wages, was countered by April’s mere 0.1-per cent rise in wages, which was below expectations.
The Dow rose 332.36 points, or 1.39 per cent, to 24,262.51, the S&P 500 gained 33.69 points, or 1.28 per cent, to 2,663.42 and the Nasdaq Composite added 121.47 points, or 1.71 per cent, to 7209.62.

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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 content editor for Morningstar Australia

© 2020 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.

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