Despite lower leads, futures are up: Aus shares to open higher

Market Reports

by Kathy Skantzos

Despite Wall Street slowing the pace to close lower again overnight, the futures are up and the Australian share market is pointing towards opening higher today, even though we had our fourth straight day of losses yesterday.

The Dow closed at its lowest level in three weeks. The Energy sector dropped after a decline in the oil price, following the International Energy Agency cutting its outlook for oil demand growth by 100,000 barrels per day this year and going into 2018.

Financials and Consumer Discretionary stocks also dropped. Retail giant Target declined almost 10 per cent after the retail forecast going into the Christmas spending season disappointed investors.

The Nasdaq fell as tech stocks dropped, including Apple, Netflix and Alphabet all declining.

The greenback fell back, following a rise in retail sales and underlying inflation, edging towards expectations for an interest rate hike next month. Investors also continue to be concerned about tax reform.

Oil continues to track lower and gold is also down. Iron ore has retreated, still tracking at a slight loss but an improvement on the last two days

US economic news

Producer prices increased 0.4 per cent month on month in October, the same rate as September and above market expectations of a 0.2 per cent rise. The rate increased 2.8 per cent year on year, above a 2.6 per cent rise in September and above market expectations of 2.4 per cent. This is the highest producer inflation rate since February 2012.

Retail sales increased by 2.3 per cent as of last week, after 2.6 per cent previously.

The fixed 30-year mortgage rates averaged 4.2 per cent last week, unchanged from the previous period. Mortgage applications increased 3.1 per cent, after stalling previously.

Local economic news

The unemployment rate, which unexpectedly fell to a 4-month low of 5.5% in September, is expected to remain unchanged.

Employment increased by nearly 20,000 jobs in September, expected to rise by 17,500 in October. Part-time employment increased by more than 13,500 in September, expected to be less than this in October.

Figures

Wall Street closed lower yesterday: The Dow Jones Industrial Average lost 0.6 per cent to close at 23,271, the S&P 500 dropped 0.6 per cent to close at 2,565 and the NASDAQ fell 0.5 per cent to close at 6,706.

European markets closed lower: London’s FTSE dropped 0.6 per cent, Paris lost 0.3 per cent and Frankfurt fell 0.4 per cent.

Asian markets closed lower: Tokyo’s Nikkei dropped 1.6 per cent, Hong Kong’s Hang Seng fell 1 per cent, and China’s Shanghai Composite declined 0.8 per cent.

And back home, the Australian share market closed lower yesterday: The S&P/ASX 200 Index closed 35 points down to finish at 5,934.

On the futures market the SPI is 14 points up.

Company news

Payment provider Pushpay (ASX:PPH) has recorded a 145 per cent increase in revenue to US$29.7 million in its 2018 half year results to September compared to the same time last year. Net loss was up 10 per cent to US$12.5 million, reflecting the company’s investment strategy. Its customer base grew by 35 per cent to more than 7000 and its annual revenue per customer grew by 46 per cent to US$790 per month. Shares in Pushpay (ASX:PPH) closed 2.04 per cent higher to $3.00.

Ex-dividends

One company is going ex-dividend today:

Tamawood (ASX:TWD) is paying 16 cents fully franked.

Currencies

One Australian Dollar at 8:50AM was buying 75.89 US cents, 57.63 Pence Sterling, 85.66 Yen and 64.37 Euro cents.

Commodities

Gold has lost $4 to $US1,279 an ounce.
Silver has lost $0.09 to $US16.98 an ounce.
Oil has lost $0.45 to $US55.44 a barrel.