Tech stocks drop: Aus shares to open lower

Market Reports

by Kathy Skantzos

It was a mixed session on Wall Street, with an unimpressive close, and Australia’s futures have slipped for the last day of trade for the week ahead of the Australia Day holiday tomorrow.

Tech stocks dropped with Apple, Facebook, Amazon and Alphabet all trading lower. However, the Dow still managed to close at a record after seeing positive intraday readings, as better-than-expected corporate earnings continue to roll in, however GE reported weaker quarterly results. Investors had some uncertainty over protectionist policy concerns.

The US dollar has fallen to a 3-year low, which the Treasury Secretary Steven Mnuchin commented is positive for the US economy. This has also had a positive impact on the Australian dollar.

In commodities, oil has surged ahead, gold is tracking higher and iron ore has also lifted.

US economic news

Mortgage applications increased 4.5 per cent in the US after a 4.1 per cent rise previously. Applications to purchase a home went up 6.1 per cent and refinance applications increased 0.9 per cent.

Home sales dropped 3.6 per cent in December, more than the market expected, as the supply of houses dropped which lifted the prices. November saw sales rise more than expected, the highest level in 11 years.

Local economic news

The ABS will release labour data for December. Employment increased 25,000 in December and the unemployment rate is sitting at 5.4 per cent.

Westpac’s lending index will also be out, which edged up 0.1 per cent in November from the previous month.

Figures

Wall Street closed mixed yesterday: The Dow Jones Industrial Average gained 0.16 per cent to close at 26,252, the S&P 500 was 0.06 per cent lower to close at 2,838 and the NASDAQ dropped 0.6 per cent to close at 7,415.

European markets closed lower: London’s FTSE dropped 1.1 per cent, Paris lost 0.7 per cent and Frankfurt dropped 1.1 per cent.

Asian markets closed mixed: Tokyo’s Nikkei dropped 0.8 per cent, Hong Kong’s Hang Seng gained 0.1 per cent, and China’s Shanghai Composite gained 0.4 per cent.

The Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 18 points up to finish at 6,055.

On the futures market the SPI has slipped 19 points.

Company news

Global litigation fund IMF Bentham (ASX:IMF) has announced it will not proceed with its previously announced conditional funding of the shareholder class action against Woolworths (ASX:WOW). The company said it decided to not proceed with funding the claims as the proposed class action no longer meets its investment criteria. IMF Bentham expects to write off approximately $151,000 relating to this matter, but said there is no potential liability for adverse costs as no proceedings commenced. Shares in IMF Bentham (ASX:IMF) closed 0.32 per cent lower yesterday at $3.07.

Australian-Chinese global resources company MMG (ASX:MMG) has recorded a 19 per cent increase in full year copper production in 2017 at just under 600,000 (598,196) tonnes, which is a record for the company. The Las Bambas mine delivered a record production of copper for the quarter, which resulted in a 37 per cent increase in production from the mine for the year. MMG said it expects to produce in the range of 560,000 and 590,000 tonnes of copper in 2018. Shares in MMG (ASX:MMG) last traded at $5.00.

Ex-dividends

One company is going ex-dividend today: Euroz (ASX:EZL) is paying 1.75 cents fully franked.

Currencies

One Australian Dollar at 8:30AM was buying 80.77 US cents, 56.83 Pence Sterling, 88.17 Yen and 65.13 Euro cents.

Commodities

Gold has gained $21.60 to $US1,363 an ounce.
Silver has gained $0.66 to $US17.57 an ounce.
Oil has gained $1.42 to $US65.89 a barrel.

Cryptocurrencies

Bitcoin has gained 2 per cent to $11,336.
Ethereum has gained about 4 per cent to $1,042.
Tether has gained 0.1 per cent to $1.00.