Fed interest rate decision tomorrow: ASX to open higher

Market Reports

by David Chau

The Australian share market is set to open higher this morning, following positive leads from overseas, and a boost in confidence about the strength of the US economy.  Investors will be keeping a close eye on the Federal Reserve, as it beings its two-day monthly meeting. The Fed is expected to raise interest rates by 25 basis points tomorrow.

Also, for the 16th time since the US election in early November, the Dow Jones has hit a new record high. and is now within striking distance of reaching 20,000 points. The Dow only needs to rise by 1% before it reaches that point.

Technology and energy shares were the top performers on Wall Street – with IBM and Apple contributing the most gains to the Dow Jones.

US economic news

The November read on the Small Business index was 98.4, which is an improvement over October's reading of 94.9.

Meanwhile, American import prices fell 0.3% in November.

Markets

Wall Street finished higher overnight: The Dow Jones gained 0.6% to close at 19,911, the S&P 500 was 0.7% higher at 2,272, while the NASDAQ rose almost 1% to close at 5,464.

European markets finished higher as well: London’s FTSE was up 1.1%, Paris gained 0.9%, and Frankfurt added 0.8%.

Asian markets finished higher: the Nikkei gained 0.5%, while the Hang Seng and Shanghai Composite were both up almost 0.1%.

The Australian share market finished weaker yesterday, with the ASX 200 closing 18 points lower at 5,545. This morning, on the futures market the SPI is up 24 points.

Currencies

The Australian Dollar at 8.30am is buying $US0.7500, 59.24 Pence, 86.36 Yen and 70.62 Euro cents.

Local economic news

Westpac-Melbourne Institute will release its Consumer Sentiment index report for December.

The Australian Bureau of Statistics will relesae new motor vehicle sales data for November.

Company news

Mining contractor, NRW Holdings Ltd (ASX:NWH), has been awarded a $40 million contract by Rio Tinto (ASX:RIO). The contract is for NRW to provide bulk earthworks and civil works required to sustain its Yandicoogina mine operations in the Pilbara region of Western Australia. NRW expects this contract to be completed in the first quarter of 2018. Shares in NRW closed 7.2% higher at 67 cents.

Lithium developer, Pilbara Minerals (ASX:PLS), will sign a Native Title Agreement with the Njamal People, the traditional owners of the land at Pilangoora in Western Australia. The company says this agreement represents a significant approval and is the last key hurdle in order for the Pilangoora Mining Lease to occur. Shares in Pilbara closed 1.92% higher at 53 cents.

Ex-dividends

Three companies are going ex-dividend today:

Ironbark Capital Ltd (ASX:IBC) will pay a fully franked dividend of 1 cent per share.
Iron Mountain (ASX:INM) will pay an unfranked dividend of 51.66 cents.
Steamships Trading (ASX:SST) will pay an unfranked dividend of 8.74 cents.

Commodities

Gold is down $4.70 to $US1,161 an ounce.
Silver has lost $0.22 to $16.97.
Copper has lost 2 cents and is now $2.60.
Oil has gained $0.27 to US$53.79 per barrel.