Jobs push Wall St higher: Aus shares to rally

Market Reports

by Jessica Amir

The Australian share market is set for a healthy rise to kick off the trading week, thanks to Wall Street closing higher on Friday after a stellar jobs report. The Dow Jones inked its 8th straight record high, while the other US major indices, the S&P 500 and the tech heavy Nasdaq also closed in the black.

But it wasn’t just the better-than-expected jobs reports that charged up US stocks, rising American exports also lowered the trade gap. That was also welcome news for investors. Goldman Sachs added the most gains on the Dow, while Financials led advancing sectors.

On the back of the positive news, Oil prices rose 1.1 per cent while Gold fell from its 7 week high.

US economic news

The US trade deficit improved in June as exports rose to a 2.5 year-high. It comes as the Commerce Department reported the trade gap dropped 5.9 per cent to $43.6 billion, which is its lowest level since October 2016. Nevertheless economists actually expected better results, forecasting the trade shortfall to drop to $45 billion.

The United States created more jobs than expected in July. Bureau of Labor Statistics reported non-farm jobs increased by 209,000 in July, smashing through the 183,000 expected. Meantime, the Unemployment rate fell to 4.3 per cent, which is its lowest level since Mar 2001. In more great news, the number of employed Americans hit a new record high, while employment-to-population increased to 60.2 per cent, highest level since (February) 2009.

When all of that jobs news came out, stock market futures rose.

Local economic news

Kicking off the week, today we can expect ANZ to report the Job ads for July, which will give us as leading indicator of the job market.

Tomorrow, the NAB will release its business survey for July, with conditions are its best level in almost a decade.

On Wednesday we will get a gauge of consumer confidence for August from Westpac and the Melbourne Institute.

Also on Wednesday we will get some data on housing finance for June from the ABS. It will include home loans for owner-occupiers and investors.

On the same day, the RBA Assistant Governor, Christopher Kent will give a speech at The Bloomberg Address.

And finally on Friday, the Economic highlight of the week; will be the half-yearly testimony by RBA Governor Phillip Lowe. Members of House of Representatives Economics Committee pose questions to the Governor, so it could provide some insight into to the direction of monetary policy.

The ABS will also give us a pulse check on lending finance for June, which includes housing, personal, business & lease loan data.

Markets

Wall Street closed higher on Friday: The Dow Jones Industrial Average gained 0.3 per cent to close at 22,093 the S&P 500 added 0.2 per cent to close at 2,477 and the NASDAQ advanced 0.2 per cent to close at 6,352

European markets closed higher: London’s FTSE rose 0.5 per cent, Paris added 1.4 per cent and Frankfurt lifted 1.2 per cent.

Asian markets closed mixed: Tokyo’s Nikkei fell 0.4 per cent, Hong Kong’s Hang Seng added 0.1 per cent, and China’s Shanghai Composite fell 0.3 per cent.

And back home, the Australian share market closed in the red on Friday: At the closing bell, The S&P/ASX 200 Index closed about 15 points lower or 0.3 per cent down for the day at 5,721.

It gained 18 points over the week.

On the futures market the SPI is 24 points up.

Company news

8I Holdings (ASX:8IH) announced an on-market share buy-back of up to 1.5 per cent of its total share capital as part of its capital management strategy. The Singapore-based investment holding company will start the share buy-back on or after Friday 18 August 2017, and will finish the buy-back by 26 July 2018. 8I Holdings will buy-back about 5.32 million shares [5,324,679]. Shares in 8I Holdings (ASX:8IH) last traded 2.44 per cent higher to $0.42 on Friday.

To ex-dividends

Three companies are going ex-dividend today:

AMCIL Limited (ASX:AMH) is paying 3.5 cents fully franked,
Ozgrowth Limited (ASX:OZG) is paying 0.25 cents fully franked and
Westoz Investment Limited (ASX:WIC) is paying 3 cents fully franked.

Currencies

One Australian Dollar at 7:20AM was buying 79.24 US cents, 60.78 Pence Sterling, 87.74 Yen and 67.30 Euro cents.

Commodities

Gold has fallen by $9.80 to $US1,265 an ounce.
Silver has lost $0.38 to $US16.25 an ounce.
And Oil has gained $0.55 to $US49.58 a barrel.
 

Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 after having worked in financial advising for seven years and in TV journalism for seven years, specialising in finance, equities and analysis. She has interviewed former Prime Ministers of Australia, Tony Abbott, Julia Gillard and Kevin Rudd and ex Treasurer Jo Hockey. Jessica has worked as a journalist with Sky News Business, ABC 1, ABC's The Business, ABC24 and has also been a regional Channel 7 and 9 TV reporter with Prime7 and Win News.