Global Market Report - 12 February
Australian shares are expected to open slightly higher, with mining stocks likely to gain from increased iron ore prices.
Australia
Australian shares are expected to open slightly higher, with mining stocks likely to gain from increased iron ore prices.
The SPI200 futures contract was up 12 points, or 0.20 per cent, at 6,009.0 at 7am Sydney time, suggesting a positive start for the benchmark S&P/ASX200 on Tuesday.
Yesterday, the ASX closed modestly in the red as gains from miners couldn't outweigh losses from the financial sector. The benchmark S&P/ASX200 index closed down 10.7 points, or 0.18 per cent, at 6,060.8 points at 4.15pm on Monday, while the broader All Ordinaries was down 7.6 points, or 0.12 per cent, at 6,128.6.
It was a mixed session on Wall Street overnight, with the Dow Jones Industrial Average down 0.21 per cent, the S&P 500 up 0.07 per cent and the Nasdaq Composite up 0.13 per cent.
The Aussie dollar is lower, buying 70.62 US cents from 70.97 US cents on Monday.
Out today: Housing finance data for December; NAB business conditions for January; NAB business confidence for January.
ASIA
Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.71 per cent, while Japan's Nikkei 225 was off 2.01 per cent. Shares in China were unchanged with the Shanghai Composite at 2,653.90.
High-level talks in Beijing this week are a leading focus for investors, many of whom see little prospect for a trade deal and instead expect an extension of the March 1 deadline for deciding whether to increase tariffs.
EUROPE
European shares bounced back on Monday as new-found optimism among investors about the new round of trade talks between Beijing and Washington lifted bourses from one-week lows.
France's CAC 40 is up 1.06 per cent while Germany's DAX is up 0.99 per cent and London's FTSE 100 is up 0.82 per cent.
The pan-regional STOXX 600 index ended the session up 0.9 percent after falling on Friday amid worries over an economic slowdown.
Banks and financials had a strong session with Italian lenders leading the way after Banco BPM, UBI Banca and UniCredit said their capital ratios met European Central Bank standards. Their shares were up 7 per cent, 3 per cent and 1.9 per cent respectively.
NORTH AMERICA
Wall Street has see-sawed, rarely straying far from opening levels as investors eyed ongoing US-China trade talks, potential congressional gridlock and a diminished 2019 earnings outlook.
The S&P 500 and the Nasdaq eked out nominal gains while the blue chip Dow edged lower.
Both Beijing and Washington expressed optimism about trade negotiations between the world's two largest economies, even as a US Navy mission in the disputed South China Sea provoked China's anger.
In Washington, congressional leaders attempted to reach an agreement on border security funding in a bid to avert another government shutdown.
With two-thirds of S&P 500 companies having reported, the fourth-quarter earnings season approached the home stretch. So far, 71.2 per cent have posted better-than-expected profits.
Fourth-quarter earnings growth is now estimated at 16.5 per cent, up from 15.8 per cent at the beginning of the year.
But first-quarter 2019 profit growth expectations have diminished. Analysts now see the year starting with quarterly earnings dropping 0.2 per cent from last year, which would mark the first contraction since the second quarter of 2016.
The Dow Jones Industrial Average fell 53.22 points, or 0.21 per cent, to 25,053.11, the S&P 500 gained 1.92 points, or 0.07 per cent, to 2,709.8 and the Nasdaq Composite added 9.71 points, or 0.13 per cent, to 7,307.91.
Losses on Monday were concentrated. Of the 11 major S&P sectors, only communications services, utilities and healthcare closed in the red.
Tariff-sensitive industrial stocks provided the biggest lift to the S&P 500, led by Union Pacific Corp, General Electric Co and FedEx Corp, among others.
Healthcare stocks were the biggest drag on the Dow, pulled down by UnitedHealth Group and Pfizer and Merck & Co, each down more than 1 per cent.
Shares of Tesla Inc rose 2.3 per cent after Cannacord Genuity upgraded the stock to "buy" from "hold." It said the electric automaker's recent price cuts are helping achieve its goal of an affordable Model 3.
Apple edged 0.6 per cent lower after industry research firm IDC said in a report that iPhone sales in China fell by 20 per cent in the fourth quarter.