Australian shares are set to fall at the open, though the outlook has improved on a late rate on Wall Street which pulled all three major benchmarks up on the day.
ASX futures were down 14 points or 0.2% to 5983 near 6.55am AEST, paring earlier losses of more than 30 points. The local currency was 0.5% higher.
Shares closed higher in New York, with the S&P 500 and the Nasdaq reversing losses late in the session. Nine of the 11 S&P 500 industry sectors rose, paced by energy and real estate. Healthcare and financials missed the train.
AFR profit season calendar and results: Here is a list of the results of Australian companies reporting their full-year financial results in the August reporting season.
Spot gold topped $US2000 an ounce overnight. Here’s TD Securities’ take on precious metals: “Gold extended its record-breaking rally to historic highs, while silver also continues its recent surge, as real yields dive deeper into negative territory. The USD, which had its poorest monthly performance in some 10-years, is also driving flows into gold.”
Local: AiG performance of construction July, Housing finance June; NZ private wages ex overtime second quarter, Unemployment rate second quarter
NAB on the pending housing finance data: “In May, home loan approvals to owner occupiers fell by a sharp 10%. A collapse in housing market activity due to the pandemic has seen the flow of new credit pull back. We expect further weakness in June, with another considerable, albeit smaller, fall.”
Overseas data: China Caixin services PMI July; Euro zone retail sales June; UK Markit/CIPS services PMI July; US ADP employment change July, Trade balance June, Market services PMI July, ISM nonmanufacturing July
Pantheon on the US jobs data: “The July data suggest that ADP is likely to report private payrolls rising by about 2,500M. Other data, however, are much less positive.”
ASX futures down 14 points or 0.2% to 5983 near 6.55am AEST
- AUD +0.5% to 71.58 US cents
- On Wall St: Dow +0.6% S&P 500 +0.4% Nasdaq +0.4%
- In New York: BHP +0.8% Rio -0.1% Atlassian -0.3%
- In Europe: Stoxx 50 +0.2% FTSE +0.1% CAC +0.3% DAX -0.4%
- Spot gold +1.5% to $US2007.36 an ounce at 3.15pm New York time
- Brent crude +0.5% to $US44.36 a barrel
- US oil +1.5% to $US41.62 a barrel
- Iron ore +1.6% to $US117.88 a tonne
- LME aluminium % to $US a tonne
- LME copper % to $US a tonne
- 2-year yield: US 0.11% Australia 0.25%
- 5-year yield: US 0.19% Australia 0.37%
- 10-year yield: US 0.51% Australia 0.82% Germany -0.55%
- US prices near 4.40pm New York
From today’s Financial Review
‘Uneven and bumpy’: RBA revises jobless figures to 10pc: The Australian economy is in for a more subdued recovery than previously predicted, the Reserve Bank says, but unemployment is set to rise.
- More Australians worried about jobs in second wave
- CEOs warn of massive job losses but big winners to emerge
- Victoria manufactures a state of confusion
- The AFR View: Don’t shut borders on the recovery
Chancticleer: Rio Tinto’s complicated mea culpa: The miner went through 17 years of documents to find the source of its failure to protect a 46,000-year-old Indigenous site in WA, and found multiple failures.
Two-speed sharemarket hurtles into earnings season: The unprecedented mix of ultra-low interest rates, fiscal stimulus and COVID-19 are starting to exaggerate the divergent performance of sharemarket sectors.
Apple rose for a fifth straight session as investors cheered the iPhone maker’s blowout quarterly report last week. The Silicon Valley heavyweight is $US121 billion away from becoming the first US publicly listed company with a stock market value of $US2 trillion.
Ralph Lauren dropped 4.4% to its lowest since May after quarterly revenue plunged due to coronavirus-related store closures and a slowdown in global demand for luxury goods.
American International Group tumbled 7.5% after its quarterly adjusted profit slumped.
Notwithstanding those two reports, about 83% of the 352 companies in the S&P 500 that have reported quarterly results so far have beaten estimates for earnings, according to IBES Refinitiv data.
“Investors are still comfortable that the trajectory of earnings is on the right path and the 2021 outlook has remained intact. All that helps support the market at these levels,” said Lindsey Bell, chief investment strategist at Ally Invest.
“I do not expect US equities to revisit the March lows,” Mohamed A. El-Erian, chief economic adviser at Allianz SE, told the Reuters Global Markets Forum chat room.
“I suspect the next big correction will likely be one triggered by corporate defaults and other capital impairment events that central banks cannot shield against,” he said.
A surge in BP shares after it laid out plans to cut its oil and gas output and boost investments in renewable energy offset disappointing earnings reports including from spirits maker Diageo, although European stocks closed largely flat.
After sliding as much as 0.6%, the pan-European STOXX 600 index recouped some of the losses in late afternoon trading to close 0.1% lower.
BP rose 6.5% even as it cut its dividend for the first time in a decade and recorded a $US6.7 billion quarterly loss.
The broader oil & gas sector rose 2.5%, with other growth-linked cyclical sectors such as auto makers and banks also rising.
By contrast, Johnnie Walker whisky maker Diageo’s shares slid 5.6% after it reported a bigger-than-expected decline in underlying sales in nearly all markets.
German drugs and pesticides group Bayer slipped 2.4% as moves to settle lawsuits over its Roundup weedkiller contributed to a 9.5 billion euro ($11.2 billion) loss.
Of the 223 companies listed on the STOXX 600 that have reported so far, nearly 62% have topped analysts’ much-reduced expectations for profits, according to Refinitiv data. In a typical quarter, 50% beat earnings estimate.
“Overall, the decline (in earnings) isn’t quite as large as people had feared. However, that is not feeding through into people upgrading their estimates for the rest of the year,” said Matt Siddle, portfolio manager, Fidelity Funds European Growth.
Hong Kong stocks snapped a three-session losing streak and ended higher on Tuesday, led by strong gains in technology firms.
At the close of trade, the Hang Seng index was up 488.50 points or 2% at 24,946.63. The Hang Seng China Enterprises index rose 1.7% to 10,203.88.
Tech shares led the gains, with the newly-launched Hang Seng tech index up 2%.
Meituan Dianping closed at an all-time high, as mainland investors continued to buy into the Chinese food delivery giant.
Tech firms also got boost from expectations that household names Alibaba, Meituan Dianiping and Xiaomi Technology may join Hong Kong’s Hang Seng Index this month.
Mainland China and offshore hub Hong Kong’s latest indexes representing technology companies are likely to attract $US25 billion in five years from passive investors, according to a Goldman Sachs report released on Thursday.
Italian government bond yields fell to their lowest since March on Tuesday and the country’s debt was poised for its best session since July 20, while safe-haven paper rallied as risk appetite took a hit in Europe.
Europe’s Stoxx 600 index was in the red after a strong rally on Monday.
European assets have become more appealing to investors as a €750 billion European Union recovery fund boosted sentiment towards the bloc and US coronavirus cases surged.
German 10-year government bond yields were flat at -0.55%, having hit 2-1/2 month lows of -0.56% last week. They fell 9 basis points last week.
Italy’s 10-year yield, down 5.5 bps on the day, fell to its lowest since the beginning of March at 1.017%.
“Lower risk appetite has boosted demand for Bunds, also this morning, and peripheral bonds are following as … there’s a lot of central bank excess liquidity available,” Luca Cazzulani, bond analyst at UniCredit, said.
Oil prices rose, on track to close at near five-month highs, on hopes the US is making progress on a new economic stimulus package and signs America is making progress on curbing the coronavirus spread.
Both benchmarks were set to close at their highest since early March.
“Crude prices turned positive on stimulus hopes and after another positive round of economic data showed manufacturing recovery continued in June,” Edward Moya, senior market analyst at OANDA in New York, said, pointing to better than expected manufacturing data in Asia, Europe and the United States.
Bank of Nova Scotia has left the group of banks and traders that set daily global gold and silver benchmark prices, and Citibank has joined, the London Bullion Market Association (LBMA) said on Tuesday.
The benchmarks, overseen by the LBMA, are used in contracts around the world. They are set in auctions into which participant banks and brokers feed buy and sell orders from themselves and their clients.
Scotiabank decided earlier this year to close its metals business, which was until a few years ago one of the biggest names in precious metals, with a history stretching back to the 17th century.
Did You See This CB Softwares?
37 SOFTWARE TOOLS... FOR $27!?Join Affiliate Bots Right Away
Citi has been expanding its precious metals operation in recent years.
Fifteen entities take part in the twice-daily gold benchmark auctions and twelve take part in the silver auctions, which happen once a day.
Scotia’s last day as a participant was July 31 and Citi’s first day was July 29, the LBMA said.
Australian shares rose on Tuesday, with the outlook for government and central bank support pushing the market higher while retail companies suffered, saying their operations were falling under Victorian restrictions to stop the pandemic’s growth.
The S&P/ASX 200 Index rose 111.5 points, or 1.9 per cent, to end the session at 6037.6, topping a positive lead from Wall Street that lifted the S&P 500 index 0.7 per cent.
The S&P/ASX All Technology index rose 2.5 per cent as the buy now, pay later providers further advanced.
Openpay Group shares closed 20.3 per cent higher at $3.91 after telling investors its payment service would be offered to golf club operators through a partnership with enterprise software company MSL Solutions.
BNPL competitors also forged ahead, with Zip Co shares rising 8.8 per cent to $6.28, Sezzle shares up 8.3 per cent to $7.20, and market darling Afterpay Group climbing 6.5 per cent to $70.80.
Follow the topics, people and companies that matter to you.
- Markets Live
The Australian sharemarket is set to open modestly firmer after US tech stocks led Wall Street higher. Tesla cracked $US2000 for the first time, surpassing Walmart in market cap. Suncorp and Healius headline another busy day of profit results.
- 14 mins ago
- Robert Guy, Vesna Poljak, Sarah Turner, William McInnes, Luke Housego and Tom Richardson