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  • need2know: Red start for ASX as Wall St slides

    2019 - 01.21

    Local shares are poised to open lower, dragged by selling on Wall Street after a report on durable goods heightened concern about the surging greenback.
    Nanjing Night Net

    What you need to knowSPI futures down 41 points to 5929$A at US78.35 cents, 93.77 Japanese yen, 71.51 Euro cents and 52.70 British penceIn late trade, S&P 500 -1.2%, Dow -1.6%, Nasdaq -2.1%In Europe, Stoxx 50 -1.3%, FTSE 100 -0.4%, CAC 40 -1.3%, DAX -1.2%Spot gold up $US2.68 or 0.2% to $US1195.96Brent crude up $US1.30 or 2.4% to $US56.41Iron ore slips 0.1% to $US55.81 per tonne 

    Today’s Agenda

    Australian population data, finance and wealth data; Bank of England statement from March 24 meeting; UK retail sales; French 4th-Qtr GDP.

    Stocks to watch

    Canaccord has a ‘buy’ on Osprey Medical. It dropped its price taget to $1.50 a share from $1.70.

    Commonwealth Bank is ‘neutral’ on Kathmandhu Holdings with a $1.55 a share target.

    Deutsche Bank is retaining a ‘buy’ on BlueScope Steel and a price target of $6.32 a share.

    Shares trading ex dividend today: Australian Leaders Fund, Myer Holdings, Watermark Market Neutral Fund.

    Currencies

    The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major peers, slid less than 0.1% to 1185.54 after tumbling 2.2% last week, the biggest weekly decline since October 2011.

    The greenback has gained against 13 or its 16 major peers this quarter, adding 9.3% versus the euro, as traders speculated on the Fed raising borrowing costs this year. Policy makers last week pushed backs bets on a rise in interest rates any time soon, indicating they were in no rush for the first increase since 2006 and will monitor data for policy direction.

    Deutsche Bank’s CVIX index of implied volatility for nine major currency pairs was at 10.65 percentage points, up from 9 a month earlier and more than double its lowest in at least 14 years of 4.9 reached in July 2014. It’s 10-year average is 10.18.

    Commodities

    Gold’s six-day rally, its longest since August 2012, came after Federal Reserve chair Janet Yellen sounded a cautious note last week on the US economy and potential interest rate increase.

    “This is a long overdue correction for gold and I think it’s going to continue to hit in the $US1200 level,” said Eli Tesfaye, senior market strategist for RJO Futures in Chicago. “The market is also eyeing Dr Yellen’s speech Friday.” Yellen is scheduled to speak on Friday at 1945 GMT.

    Zinc was last bid down 0.2% at $US2081 a tonne while lead was last bid 0.3% lower at $US1845. “Zinc and lead plunged to multi-month and multi-year lows recently though …. global supply is extremely tight. We expect to see significantly higher prices of both metals by year’s end,” said Commerzbank in a note.

    Nickel lost 1.9% to end at $US13,680 a tonne after LME inventories rose to a record high of 433,980 tonnes

    United States

    A selloff in biotechnology and chip companies dragged US stocks to a third day of declines, interrupting another run at a record for the Nasdaq Composite Index, after analysts cut ratings on computer suppliers.The Nasdaq headed for its longest slide since January after climbing to within 20 points of its dot-com-era record on Friday.

    The Nasdaq Biotechnology Index, which rallied 21% in 2015 through Friday, sank 3.2% as some of the quarter’s best performers retreated.

    Orders for durable goods unexpectedly dropped in February. The result reinforced a trend of mixed economic data after the Federal Reserve signaled it will monitor the economy to guide its decision on raising borrowing costs.

    “Some of the hot tech and biotech stocks – the higher- beta names – are taking a hit today,” Richard Sichel, chief investment officer at Philadelphia Trust Co, which oversees $US2 billion, said in a phone interview. “There’s a little profit taking, which feeds on itself, especially within stocks that have jumped the most recently. We also had durable goods orders that were weaker than expected, which is weighing on sentiment.”

    Europe

    European stock markets have pulled back as worries over Greece offset positive German data, analysts say, with focus also on the aviation sector as more details of the Alps plane crash emerged.

    German business confidence rose to its highest level in eight months in March, as optimism continues to grow about the outlook for Europe’s biggest economy, the Ifo economic institute said Wednesday. The Ifo institute’s closely-watched business climate index rose to 107.9 points this month, its highest level since July 2014, the think tank said in a statement.

    “Despite the latest German Ifo business climate data beating expectations, this good news couldn’t inspire much growth in the DAX, or the rest of the eurozone, with the region appearing to be hampered by the euro taking back some of yesterday’s losses against the dollar alongside more worries about Greece’s financial situation,” said Connor Campbell, analyst at Spreadex trading group.

    What happened yesterday

    The big four banks’ shares continue to rise, up almost 1% on Wednesday despite minimal gains in the wider market.

    This story Administrator ready to work first appeared on Nanjing Night Net.

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