Oil prices & Fed weigh on US; Aus shares to open flat

Market Reports

by David Chau

This morning, it looks like the Australian share market will open flat, following weak leads from the US.  Overnight, Wall Street finished mostly lower. Energy shares tumbled along with crude oil prices, as China ramped up oil exports (and Iraq is expected to do the same this week).

Also, over the last week, two Federal Reserve members have expressed hawkish views about the US economy and the prospect of interest rates rising soon. Investors are now waiting to see what Fed chair, Janet Yellen, will say in her speech on Friday – for clues on when the next rate rise might happen.

Markets

Wall Street finished mostly lower on Monday: The Dow Jones lost 0.1% to close at 18,529, the S&P 500 fell 0.1% to close at 2,183 while the NASDAQ gained 0.1% to close at 5,245.

European markets closed lower: London’s FTSE was down 0.4%, Paris lost 0.2% and Frankfurt slipped 0.5%.

Asian markets were mixed: Tokyo’s Nikkei gained 0.3%, Hong Kong’s Hang Seng was up 0.3%, and the Shanghai Composite fell 0.8%.

As for the Australian share market, it finished weaker yesterday: The ASX 200 closed 12 points down to finish at 5,515.  This morning, on the futures market, the SPI is up 3 points.

Currencies

The Australian Dollar at 7:20AM was buying $US76.34 cents, 58.11 Pence, 76.56 Yen and 67.43 Euro cents.

Earnings season

A number of companies, including Caltex, Oil Search and Scentre Group will release their financial results today. 

Company news

NIB Holdings Ltd (ASX:NHF), says it has recorded its “strongest” full year results, with net profit (after tax) increasing 22% to $91.8 million. The health insurance company also says its revenue rose 14.3% increase over the previous year. NIB says its growth was due to selling more policies, as well as the profit margin on those policies.

Despite that solid result, shares in NIB closed 7.5% lower at $4.44.

APN Outdoor Ltd (ASX:APO) reported a 49% surge in profit to $19.5 million for the six months ended 30 June 2016. The advertising company says its revenue rose 10% to $150.6 million. However, APN also downgraded its guidance for the full year due to weakening market activity. In February, the guidance was 8% to 11%, but APN has now lowered it to between 6% and 8%.

As a result, shares in APN traded sharply lower, falling 35.32% to $5.33.

Ex-dividends

A few companies are going ex-dividend today. They include: Bell Financial Group, REA Group, Regis Resources, and Wilson Group.

Commodities

Gold has lost $2.80 to $US1,343 an ounce for the December contract on Comex.
Silver is down $0.45 to $19.00 for September.
Copper is down $0.03 to $2.15 a pound for September.
Oil has lost $1.70 to $US47.41 a barrel for September light crude.

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