Fed raises rates: Aus market set to open lower

Market Reports

by Rachael Jones

The Australian share market is set to open lower this morning after Wall Street extended losses into the close. This was due to the Federal Reserve raising interest rates for the second time this year. As expected, policymakers then signalled with fresh projections in their 'dot plot' graph that they anticipate two more increases this calendar year. The US central bank lifted its rate range by 25 basis points overnight - the seventh increase in the current cycle. Before New York closed, Comcast said it offered $86 billion for the businesses Twenty-First Century Fox had already agreed to sell to Walt Disney.

Local economic news

RBA Governor, Philip Lowe gave a speech on productivity and wages at the Australian Industry Group in Melbourne yesterday noting GDP rose by 3.1 per cent, stronger than it expected for the year. Much of the discussion was around how low productivity was a key factor behind low wages growth creation has remained strong, despite the unemployment rate been around 5½ per cent for a year now.

Figures from around the globe:

Wall Street closed lower yesterday. The Dow Jones Industrial Average ended the session 0.5 per cent lower to close at 25,201, the S&P 500 lost 0.4 per cent to close at 2,776 and the NASDAQ fell 0.1 per cent to close at 7696.

European markets closed mixed yesterday: London’s FTSE ended flat, Paris fell 0.01 per cent and Frankfurt gained 0.4 per cent.

Asian markets closed mixed yesterday: Tokyo’s Nikkei gained 0.4 per cent, Hong Kong’s Hang Seng fell 1.2 per cent, and China’s Shanghai Composite lost almost 1 per cent.

On the futures markets, the ASX futures are pointing to a 5 pts loss. Yesterday, the Australian share market closed lower with the S&P/ASX 200 Index losing 31 points to close at 6024.

Company news

SCA Property Group (ASX:SCP) has released the results of its property valuations for this month. Overall the total portfolio capitalisation rate improved by 14bps to 6.33 per cent at June 2018 - compared to 6.47 per cent at December 2017. The total value of investment properties increased by $16.1m to $2,453.8m. The components of this increase were - Like-for-like Australian properties valuation increased by $60.1m, or 2.5 per cent. The increase is driven by the tightening of cap rates and an increase in like-for-like valuation NOI of 0.7 per cent. Fifteen of the properties were independently valued. The remaining 58 properties were internally valued.

Shares in Shopping Centres Australasia Property Group (ASX:SCP) closed 0.41 per cent higher to $2.44 yesterday.

Ex-Dividends

Three company are going ex-dividend today.
Iron Mountain Incorp (ASX:INM) is paying 54.38c unfranked.
Jumbo Interactive (ASX:JIN) is paying 8c fully franked.
Plato Inc Max Ltd. (ASX:PL8) is paying 0.5c unfranked.

Currencies

One Australian Dollar at 7:40AM was buying US75.80 cents, 56.68 Pence Sterling, 83.63 Yen and 64.30 Euro cents.

Commodities

Iron ore futures are pointing to a 0.6 per cent gain.
Gold has gained $3.50 to $US1303 an ounce.
Silver has added 17c to $US17.07 an ounce.
Oil was up 20c to $US66.48 a barrel.

Cryptocurrencies

The three most traded cryptocurrencies are trading lower:
Bitcoin has fallen 4.1 per cent to US$6,314,
Ethereum has lost 4.8 per cent to US$470.75,
EOS has dropped 1.9 per cent to US$10.08.