Fed holds rates steady, Dow closed at record high: ASX to open flat

Market Reports

by Roma Christian

The Australian share market is tipped to open flat, after Wall Street closed in the black yesterday, following strong earnings reports and the Fed’s decision to keep interest rates unchanged.

The Fed also announced it plans to start paring back its balance sheet “relatively soon”.

The Dow Jones rose 95 points to notch an intraday and closing record. Boeing led the advancers, jumping 9 per cent, after it released its second quarter earnings report, which was well ahead of analyst expectations.

The tech-heavy Nasdaq, climbed 11 points, also notching an all-time high.

The S&P 500 closed relatively flat.

Meantime, oil has jumped to an eight week high, after US crude inventories dropped in the last week.

US economic news

The Fed has kept its benchmark interest rate target rate on hold at 1 per cent to 1.25 per cent. Analyst are predicting there is a 50:50 chance of rate movement before the end of the year.

US new home sales rose by 0.8 per cent in June, to a seasonally adjusted rate of 610,000 units. Despite a second straight month rise, it is below expectations of 615,000.

Local economic news

The Australian Bureau of Statistics (ABS) will release data on export and import prices for the June quarter.

Markets

Wall Street closed higher yesterday: The Dow Jones Industrial average gained 0.5 per cent to close at 21,711, the S&P 500 added 0.03 per cent to close at 2,478 and the NASDAQ rose 0.2 per cent to close at 6,423.

European markets closed higher: London’s FTSE rose 0.2 per cent, Paris gained 0.6 per cent and Frankfurt climbed 0.3 per cent.

Asian markets closed higher: Tokyo’s Nikkei added 0.5 per cent, Hong Kong’s Hang Seng rose 0.3 per cent and China’s Shanghai Composite jumped 0.1 per cent.

The Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 50 points up to finish at 5,777. On the futures market, the SPI is 4 points up.

Company news

SMS Management & Technology Limited (ASX:SMX) has advised that the Supreme Court of Victoria has ordered a shareholder meeting (Scheme Meeting), to vote on the proposed acquisition of 100 per cent of SMS shares by ASG Group Limited. The IT consulting and delivery firm says if approved, SMS shareholders will receive a cash payment of $1.80 per share, less special dividend paid. The meeting will be held on 1 September 2017. Shares in SMS Management & Technology Limited (ASX:SMX) last traded 0.28 per cent higher to $1.80.

Reporting season

We can watch out for GUD Holdings (ASX:GUD) which is set to report financial results today.

Currencies 

The Australian Dollar at 7.20AM was buying 80.08 US cents, 61.05 Pence Stirling, 89.01 Yen and 68.25 Euro cents.

Commodities

Gold has gained $8.20 to $US1,267 an ounce.
Silver has gained 9 cents to $US16.64 an ounce.
Oil has jumped 83 cents to $US48.72 a barrel.