Dow down 666 points: Aus shares to open lower

Market Reports

by Kathy Skantzos

The Dow Jones saw the worst day of trade since June 2016, plummeting 666 points at the close of Friday’s session, capping off the worst week for Wall Street in two years. This comes after a stronger-than-expected jobs report increased inflation pressure and hiked up interest rates.

The Energy sector was the worst performing sector, with shares in Exxon Mobil falling after a pull back in production. The tech-heavy Nasdaq fell on the back of Apple shares dropping 4.4 per cent, after reporting tighter-than-expected profit margins less iPhone sales than anticipated. Alphabet shares also dropped more than 5 per cent after reporting weaker quarterly results. However, this was offset by Amazon, which shot up after a reporting positive quarterly results.

Gold and oil have both fallen, while iron ore is tracking higher.

US economic news

The unemployment rate in the US is at a 17-year low at 4.1 per cent. The US economy added 200,000 jobs in January, which was more than expected.

Local economic news for the week

The AIG services index for January will be out today, which increased in December 2017.

ANZ will release job advertisement figures for January which declined 2.3 per cent in December 2017.

The RBA will make an interest rate announcement tomorrow. It’s currently at 1.5 per cent low.

We’ll also have retail trade figures for December, which increased 1.2 per cent in November.

International trade for December will also be out. Exports have remained unchanged and imports rose 1 per cent.

The construction index will be out mid-week, which fell in December with slow expansion in construction activity.

Housing finance for December will be out at the end of the week. Home loans increased 2.1 per cent in the previous month.

And the Reserve Bank will make a statement on monetary policy.

Figures

Wall Street closed in the red yesterday: The Dow Jones Industrial Average dropped 2.5 per cent to close at 25,521, the S&P 500 lost 2.1 per cent to close at 2,762 and the NASDAQ fell almost 2 per cent to close at 7,421.

European markets closed lower: London’s FTSE dropped 0.6 per cent, Paris lost 1.6 per cent and Frankfurt dropped 1.7 per cent.

Asian markets closed mixed: Tokyo’s Nikkei dropped 0.9 per cent, Hong Kong’s Hang Seng dropped 0.1 per cent, and China’s Shanghai Composite gained 0.4 per cent.

And back home, the Australian share market closed higher on Friday: The S&P/ASX 200 Index closed 31 points up to finish at 6,121.

On the futures market the SPI is 65 points down.

Company news

Oil and gas company AWE (ASX:AWE) has raised concerns with the Federal Government Takeovers Panel regarding a takeover bid from China Energy Reserves and Chemical Group (CERCG). The panel reported on Friday that AWE claims the takeover bid fails to address the takeover offer by Mineral Resources (ASX:MIN) and does not fully disclose whether funding is available for the company to carry out the bid, leaving AWE shareholders with not enough information to assess the bid. CERCG is the lowest bidder against Mineral Resources and Mitsui. Shares in AWE (ASX:AWE) last traded just over 1 per cent higher at $0.98.

Elk Petroleum (ASX:ELK) has appointed Jim Piccone as its new Executive Director. He joined Elk’s US management team as Chief Executive Officer and Director of Elk’s US subsidiary in January 2018. He comes with 39 years’ experience in the oil and gas sector and was the co-founder of Resolute Energy. Shares in Elk Petroleum (ASX:ELK) closed/ last traded 4.8 per cent lower at $0.10.

Ex-dividends

One company is going ex-dividend today: Advanced Share (ASX:ASW) is paying 2.1 cents fully franked.

Currencies

One Australian Dollar at 7:45AM was buying 79.11 US cents, 56.09 Pence Sterling, 87.16 Yen and 63.62 Euro cents.

Commodities

Gold has lost $10.60 to $US1,337 an ounce.
Silver has lost $0.45 to $US16.71 an ounce.
Oil has lost $0.35 to $US65.45 a barrel.

Cryptocurrencies

The three most traded cryptocurrencies are trading lower.

Bitcoin has fallen 12.6 per cent to $8,126.
Ethereum fallen about 15.3 per cent to $823.
Tether has fallen about 1.5 per cent to $0.98.