Wall Street reverses upwards; Aus shares to open higher

Market Reports

by David Chau

Following very strong leads from US markets, the Australian share market will open higher today.

You may recall, last Friday, Wall Street posted trading losses due to the disappointing retail data released last week. However, on Monday, all three major Wall Street indexes finished at record highs.

Oil rose to five-week highs, and this drove up Energy shares. The Commodities and Materials indexes performed strongly as well.

US economic news

Homebuilder confidence rose by 2 points in August – from 58 to 60. A reading above 50 is positive sentiment, so the US construction industry is performing well.

Also, manufacturing conditions in the New York region deteriorated this month. The Empire State Manufacturing Index dropped from 0.6 last month to negative 4.2 in August.

Markets

Wall Street closed up yesterday: The Dow Jones Industrial Average gained 0.3 per cent to close at 18,636, the S&P 500 added 0.3 per cent to close at 2,190 and the NASDAQ gained 0.6 per cent to close at 5,262.

European markets closed mixed: London’s FTSE gained 0.4 per cent, Paris lost 0.1 per cent and Frankfurt gained 0.2 per cent.

Asian markets closed mixed: Tokyo’s Nikkei slipped 0.3 per cent, Hong Kong’s Hang Seng gained 0.7 per cent, and the Shanghai Composite added 2.4 per cent.

Back home, the Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 9 points up to finish at 5,540.  Today, on the futures market, the SPI is up 8 points.

Local economic news

Due out today from the Reserve Bank of Australia are its monetary meeting minutes for August. In those minutes, the RBA will discuss in detail the reasons why they cut the official cash rate to a record low 1.5%.

Also, the Australian Bureau of Statistics will release motor vehicle sales data for July, which will be an indicator of how consumer confidence is tracking.

Earnings season

A number of companies, including BHP Billiton Ltd (ASX:BHP), Domino’s Pizza Enterprises Ltd (ASX:DMP) and Mirvac Group (ASX:MGR), will release their financial results today.

Company news

AngloGold Ashanti Limited (ASX:AGG) says it has tripled its free cash flow to $108 million, and cut net debts by 32%, as costs fell and it took advantage of higher gold prices. As for the company’s adjusted earnings before interest and tax, it fell by 2% to $781 million in the six months ending 30 June 2016.

Shares in AngloGold closed steady yesterday at $5.70.

IMF Bentham Limited (ASX:IMF) has announced that it proposes to fund a class action, initiated by current and former shareholders of collapsed mining company, Kagara Ltd. The claim will be against Kagara, and relates to alleged misleading and deceptive statements made by that company.

Shares in IMF Bentham closed 0.61 per cent lower yesterday at $1.64.

Ex-dividends

Five companies are going ex-dividend today. They are Computershare, Genworth Mortgage Insurance, Ironbark Capital, Neometals and Reckon.

Currencies

The Australian Dollar at 7:20AM was buying $US0.7675 cents, 59.6 Pence Sterling, 77.73 Yen and 68.63 Euro cents.

Commodities

Gold has gained $1.40 to $US1,345 an ounce for the December contract on Comex.
Silver has gained $0.12 to $19.82 for September.
Copper has gained 1 cent to $2.16 a pound for September.
Oil has gained $1.19 to $US46.37 a barrel for September light crude.

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