Record close for S&P 500: Aus shares to open higher

Market Reports

by Jessica Amir

Following a stellar close on Wall Street, the Australian share market is set to open higher.

The S&P 500 posted a record close after the Federal Reserve announced plans to claw back its $4.5 trillion balance sheet.

Real estate led the charge on the S&P, while the Dow Jones added about 75 points, with Goldman Sachs pulling the index higher.

Meantime Gold is trading a little higher after the US Fed’s minutes were released, while Oil sank after US crude oil inventories fell for the 7th straight week.

US economic news

The US Federal Reserve released its minutes from its meeting held in the first week of May. The Fed noted interest rates will gradually rise and it will reduce its bond reinvestment.

The Federal Housing Finance Agency’s price index rose by 0.6 per cent in March, beating forecasts it would rise to 0.5 per cent. It follows the gain of 0.8 per cent in February.

The National Association of Realtors reported that existing home sales fell 2.3 per cent in April, much greater than the 1.1 per cent fall expected. Existing home sales fell to a seasonally adjusted annual rate of 5.57 million units in April.

Local economic news

The ABS will report on the detailed job market data for April. All eyes will be on the geographic and demographic break-up of the data. Particularly as participation rates among young people have proved historically low in recent years, while seniors have actively been looking for work.

Also on today, two speeches will be made by RBA officials. Reserve Bank Assistant Governor of the Financial System will make a speech at Australia’s Biggest Morning Tea in Sydney. Later on, RBA Deputy Governor Guy Debelle will give an address at the launch of the FX Global Code in London.

US Markets

Wall Street closed higher on Thursday: The Dow Jones Industrial Average gained 0.4 per cent to close at 21,012, the S&P 500 added 0.3 per cent to close at 2,404 and the NASDAQ advanced 0.4 per cent to close at 6,163.

European markets closed mixed: London’s FTSE gained 0.4 per cent, Paris lost 0.1 per cent and Frankfurt fell 0.1 per cent.

Asian markets closed higher: Tokyo’s Nikkei added 0.7 per cent, Hong Kong’s Hang Seng rose 0.1 per cent, and China’s Shanghai Composite gained 0.1 per cent.

And back home, the Australian share market closed higher on Wednesday: The S&P/ASX 200 Index closed 9 points higher to finish at 5,769.

On the futures market the SPI is 11 points up.

Company news

Myer Holdings Limited (ASX:MYR) has announced TOPSHOP is looking to restructure its Australian operations. The retailer holds a 20 per cent interest in Austradia, which is the Australian franchisee of TOPSHOP TOPMAN. The parties appointed administrators Ferrier Hodgson, who will work with Myer and the UK-based franchisor, Arcadia Group to deliver the best shareholder outcome. The 17 TOPSHOP and 17 TOPMAN concession stores in Myer will continue to trade as normal. Shares in Myer Holdings Limited (ASX:MYR) last traded 1.61 per cent lower yesterday to 91.5 cents.

Ex-dividends

Four companies are going ex-dividend today:

BT Investment Management (ASX:BTT) is paying 19 cents 30 per cent franked
Dicker Data Limited (ASX:DDR) is paying 4 cents fully franked
Tilt Renewables Limited (ASX:TLT) is paying 2.25 cents unfranked and
Z Energy Limited (ASX:ZEL) is paying 18.67 cents unfranked.

Currencies 

The Australian Dollar at 7:30AM was buying 75.04 US cents, 57.86 Pence Sterling, 83.69 Yen and 66.92 Euro cents.

Commodities

Gold has gained $3 to $US1,262 an ounce.
Silver has gained 9 cents to $US17.23 an ounce.
And Oil has fallen 17 cents to $US51.30 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.