Tech stocks fall: Aus shares to open lower

Market Reports

by Kathy Skantzos

Following mixed leads from US markets and a decline in futures on the ASX200, the Australian share market looks set to open lower today after yesterday’s strong day.

In the US, the Dow rose 103 points, closing on a record high. The Nasdaq went the other way with tech stocks declining. Facebook, Netflix and Alphabet all fell. Financials performed well on the other hand, with regional banks hitting record highs. Retail is still going strong at the start of the holiday shopping season. A strong GDP for the quarter was better than expected, indicating confidence in the economy and job market. The US dollar is edging higher with tax bill progress following approval of the Senate's tax plan on Tuesday.

On the commodities front, oil has dropped nearly a per cent and gold is also down. Iron ore is up nearly 2 per cent, setting the miners up for a positive day.

US economic news

GDP is up 3.3 per cent in Q3 compared to a 3.2 per cent expectation after rising 3.1 per cent in the previous quarter, indicating Americans are gaining confidence in the economy and employment.

Corporate profits increased 5.8 per cent in the US in Q3 after a 0.1 per cent gain in the previous quarter.

Consumer confidence increased to a 17-year high unexpectedly rising to 129.5, the best level since November 2000.

Mortgage applications dropped 3.1 per cent last week after rising 0.1 per cent the previous period and applications to purchase a new home rose 1.8 per cent. The average 30-year mortgage rate was unchanged at 4.2 per cent.

Local economic news

The HIA will release new home sales for October after a 6 per cent frop the previous month and a 9 per cent rise in August.

Private sector credit for October will be out, expected to rise half a per cent after a 0.3 per cent rise in September.

Building permits for October will be out, which is expected to drop after a 1.5 per cent increase in September.

Private capital expenditure for the quarter will be out, expected to increase 1 per cent.

Figures

Wall Street closed mixed yesterday: The Dow Jones Industrial Average gained 0.4 per cent to close at 23,941, the S&P 500 lost 0.4 per cent to close at 2,626 and the NASDAQ lost 1.3 per cent to close at 6,824.

European markets closed mixed: London’s FTSE is down 0.9 per cent, Paris gained 0.1 per cent and Frankfurt is flat.

Asian markets closed mixed: Tokyo’s Nikkei added 0.5 per cent, Hong Kong’s Hang Seng dropped 0.2 per cent, and China’s Shanghai Composite gained 0.1 per cent.

And back home, the Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 27 points up to finish at 6,011.

On the futures market the SPI is 7 points down.

Company news

Construction engineering company Macmahon (ASX:MAH) has executed the final mining services contract for the Byerwen Coal project worth $350 million in revenue. The three-year contract includes the provision of all open cut mining and bulk earthworks at the new coal mine in Queensland. Shares in Macmahon (ASX:MAH) closed 2.33 per cent higher to $0.22.

Medicinal cannabis company Creso Pharma (ASX:CPH) is offering eligible shareholders the option to purchase up to $15,000 worth of shares in its share purchase plan to fund its cannabis growing facility in Canada. The company intends to raise a minimum of $2 million under the plan which, in conjunction with its $15.5 million institutional placement, will raise funds of $17.5 million. Shares in Creso Pharma (ASX:CPH) closed 3.2 per cent lower to $1.21.

Ex-dividends

One company is going ex-dividend today. OFX Group (ASX:OFX) is paying 2.4 cents fully franked.

Currencies

One Australian Dollar at 8:55AM was buying 75.71 US cents, 56.46 Pence Sterling, 84.77 Yen and 63.92 Euro cents.

Commodities

Gold has lost $12.50 to $US1,287 an ounce.
Silver has lost $0.35 to $US16.57 an ounce.
Oil has lost $0.55 to $US57.44 a barrel.