Global Market Report - 22 February
Australian shares are expected to open higher after Wall Street rose on the Fed's minutes while local investors await another day of earnings results.
Australia
Australian shares are expected to open flat after a negative lead from Wall Street and amid concerns about coal exports to China.
The SPI200 futures contract was down 8 points, or 0.13 per cent, at 6,093.0 at 8am Sydney time, suggesting a slight dip for the benchmark S&P/ASX200 on Friday. Yesterday, the ASX rebounded from a choppy morning to close higher on the backs of the big banks and discretionary consumer stocks.
The benchmark S&P/ASX200 index finished up 42.7 points, or 0.7 per cent, at 6,139.2 points at 4.15pm on Thursday, while the broader All Ordinaries was up 38.8 points, or 0.63 per cent, at 6,214.6.
On Wall Street overnight, the Dow Jones Industrial Average was down 0.40 per cent, the S&P 500 was down 0.35 per cent and the Nasdaq Composite was down 0.39 per cent.
The Australian dollar fell overnight following a media report that a major Chinese port operator was no longer allowing in Australian coal.
A Dalian Port Group official told Reuters that Dalian customs had halted Australian coal imports at five harbours in northern China.
The local currency spiked on Friday morning after Treasurer Josh Frydenberg told ABC radio there was no Chinese ban on Australian coal.
The Aussie dollar is buying 70.98 US cents from 70.90 US cents on Thursday.
Companies reporting earnings results on Friday include Bellamy's, Ardent Leisure and Village Roadshow.
ASIA
Asian markets finished mixed as of the most recent closing prices.
Positive signs on the seven-month trade war gave Hong Kong shares a slight lift. The Hang Seng gained 0.41 per cent.
Personal computer maker Lenovo Group soared 12 per cent after reporting quarterly profit that exceeded analysts' estimates.
The Shanghai Composite lost 0.34 per cent.
In Japan, the Nikkei 225 rose 0.15 per cent.
EUROPE
European markets finished mixed as of the most recent closing prices.
The DAX gained 0.19 per cent, while London's FTSE 100 was off 0.85 per cent.
British Gas-owner Centrica hit a near 16-year low and fell 11.7 per cent after warning that a national price cap on energy bills would hurt its 2019 results.
BAE Systems fell 7.9 per cent on its worst day in five years. It said German moves to block exports to Saudi Arabia could hurt its deals with Riyadh and weigh on its financial performance.
Tobacco company Imperial Brands shed 4.1 per cent as the stock traded ex-dividend
Shares in France were unchanged with the CAC 40 at 5196.11.
NORTH AMERICA
Weak economic reports pressured US stocks on Thursday after the market’s recent run of gains, and a drop in healthcare shares added to the bearish momentum.
The Commerce Department said new orders for key US-made capital goods unexpectedly fell in December, pointing to a further slowdown in business spending on equipment that could crimp economic growth.
Separate data showed the Philadelphia Federal Reserve’s gauge of US. Mid-Atlantic business activity declined in February to its weakest level since May 2016, while another report showed US existing home sales dropped last month to the lowest level since November 2015.
Recent gains in the market have been driven by hopes of progress in US-China trade talks and dovish signals from the Federal Reserve. Despite the dip, the S&P 500 hovers near two-month highs and is up about 18 per cent since its late-December low.
The US and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, sources told Reuters. The two sides were trying to reach agreement before 1 March, Reuters reported.
The Dow Jones Industrial Average fell 103.81 points, or 0.4 per cent, to 25,850.63, the S&P 500 lost 9.82 points, or 0.35 per cent, to 2,774.88 and the Nasdaq Composite dropped 29.36 points, or 0.39 per cent, to 7,459.71.
The S&P 500 snapped a three-day streak of gains.
A sharp slowdown in global growth, especially in China and Europe, along with fading fiscal stimulus and trade tensions have fuelled recent worries about the economy.
The Atlanta Federal Reserve’s GDPNow forecast model now shows the US economy likely expanded at a 1.4 percent annualized rate in the fourth quarter.
The S&P healthcare index slid 0.9 per cent, weighed down by Johnson & Johnson's 0.7 per cent fall. The healthcare giant said it received subpoenas from US regulators related to litigation involving alleged asbestos contamination in its signature baby powder product line.
Adding to the day's weakness, the S&P 500 energy index fell 1.6 per cent.
Also, Domino's Pizza shares tumbled 9.1 per cent after it missed analysts’ estimates for quarterly same-store sales.
Nike shares were down 1 per cent after the company’s sneaker worn by emerging basketball star Zion Williamson split in half during a game.