Weak leads from US markets: Aus shares to open lower

Market Reports

by Kathy Skantzos

Following weak leads from Wall Street with the major US markets in the red, the ASX is set to continue on a slight downfall after recording its worst day in 2 months yesterday, while it’s still sitting not far below the 5970 mark.

Banks in the US were weaker, and GE shares continued to shed since earlier this week following a company strategy overhaul and announcing cuts to its dividends. TJ Maxx, a large retailer in the US, recorded its slowest sales growth since 2009, which added to losses, as well as a number of smaller companies performing weaker in the US markets. Concerns about US tax plans continue to weighs down on investors.

Safehaven gold is up while oil is tracking lower. Iron ore has plummeted 4.6 per cent which is likely to take its effect on the materials market.

US economic news

The US Producer Price Index rose more than expected to 0.4 per cent in October, higher than the expected 0.1 per cent.

NFIB's Index of Small Business Optimism rose less than a point to 103.8 in October of 2017 from 103 in September, remaining below market expectations of 104.

Local economic news

Westpac’s consumer confidence figures will come out today. Last month saw a 3.6 per cent increase month on month, which was the strongest confidence this year.

We can also expect the quarterly and annual wage price index, which rose only half a per cent quarter on quarter to June and increased 1.9 per cent for the year to June.

Figures

Wall Street closed lower yesterday: The Dow Jones Industrial Average lost 0.1 per cent to close at 23,409, the S&P 500 dropped 0.2 per cent to close at 2,579 and the NASDAQ fell 0.3 per cent to close at 6,738.

European markets closed lower : London’s FTSE is flat at 0.01 per cent, Paris lost 0.5 per cent and Frankfurt dropped 0.3 per cent.

Asian markets closed lower: Tokyo’s Nikkei is flat, Hong Kong’s Hang Seng dropped 0.1 per cent, and China’s Shanghai Composite fell 0.5 per cent.

And back home, the Australian share market closed lower yesterday: The S&P/ASX 200 Index closed 53 points down to finish at 5,969.

On the futures market the SPI is 23 points down.

Company news

Regenerative medicine company Mesoblast (ASX:MSB) announced cash reserves of US$62.9 million in the first quarter of FY2018 as a result of its entitlement offer in September. Revenue from royalties on sales of TEMCELL by Japanese JCR Pharmaceuticals increased by 178 per cent to US$0.6 million compared to the prior corresponding period. The company contained spend while increasing its clinical R&D activities by US$1.4 million, offset by a cost saving of US$2.4 million for manufacturing and US$0.4 million for management and administration expenses for Q1 of FY2018 compared to the first quarter of FY2017. The third phase of its cell therapy clinical trial will continue into the 2018 financial year. Shares in Mesoblast (ASX:MSB) closed 1.83 per cent higher to $1.40.

Ex-dividends

One company is going ex-dividend today:

Plato Inc (ASX:PL8) is paying 0.45 cents fully franked.

Currencies

One Australian Dollar at 8:50AM was buying 76.33 US cents, 57.98 Pence Sterling, 86.61 Yen and 64.72 Euro cents.

Commodities

Gold has gained $1.80 to $US1,281 an ounce.
Silver has lost $0.03 to $US17.02 an ounce.
Oil has dropped $1.68 to $US55.29 a barrel.