The Australian share market is current eyeing a gain of 0.8 per cent, looking to extend on its gain of 0.2 per cent yesterday. It comes as US stocks had their second-best day 2019.
The SPI futures are up 52 points. Yesterday, the Australian share market closed 12 points or 0.2 per cent higher at 6,332
On Tuesday in the US, all three of the major indices closed over 2 per cent higher after the US Central bank Chair, Jerome Powell hinted that the Federal Reserve was open to easing monetary policy to save the economy to ‘sustain the expansion’.
US economic news
Tuesday in the US, we learnt new orders for US made goods orders fell in April and shipments saw their biggest drop in two years according to the Commerce Department. Factory goods orders fell 0.8 per cent, while the market was expecting a drop of 0.9 per cent. Manufacturing, accounts for 12 per cent of the economy.
Local economic news
Back home, yesterday we saw interest rates being cut for the first time since August 2016 with the RBA taking the cash rate to an all-time low of 1.25 per cent as expected.
For investors it now means they have to up their ante in the hunt for yield and growth as low interest rates will be here for even longer. Notwithstanding we can expect another 0.25 per cent rate cut in July or August and two more rate cuts by mid-next year, taking the cash rate to 0.5 per cent. Or so that’s what some economists expect.
And today, in terms of economic news we can expected a services sector reading (purchasing managers index (PMI)) for May. The sector is expected to have strengthened in May, up from the prior reading of 54.8.
Wall Street closed higher Tuesday: The Dow Jones Industrial Average gained 2.1 per cent to 25,332, the S&P 500 added 2.1 per cent to close at 2803 and the NASDAQ rose 2.7 per cent to 7,527.
European markets closed higher: London’s FTSE added 0.4 per cent, Paris gained 0.5 per cent and Frankfurt rose 1.5 per cent.
Asian markets closed mostly lower, Tokyo’s Nikkei closed flat, Hong Kong’s Hang Seng was down 0.5 per cent and China’s Shanghai Composite lost almost 1 per cent.
Australian Unity Office Fund (ASX:AOF), has received a $480 million takeover offer from, Abacus Property Group (ASX:ABP) and Charter Hall Group (ASX:CHC) to buy all of the shares in AOF at $2.95 cash (that they already don't own). The Consortium, Abacus Property Group (ASX:ABP) and Charter Hall Group (ASX:CHC) already own 19.9 per cent of the property group. The offer is a 6.1 premium to AOF’s closing price of $2.78 on 3 June 2019. Shares in Charter Hall Group (ASX:CHC) closed 1.35 per cent higher at $10.55
Magellan Financial Group (ASX:MFG) announced it has promoted Hamish McLennan as Deputy Chairman of Magellan, which should strengthen the group's governance framework. While it also promoted Robert Fraser as Chairman of Magellan Asset Management. He’s current the group current Chairman of the Audit and Risk Committee. Both promotions are effective today. Shares in Magellan Financial Group (ASX:MFG) closed 0.7 per cent higher at $42.02 yesterday.
James Hardie Industries (ASX:JHX) is paying 30.06 cents unfranked
One Australian Dollar at 7:30 AM was buying 69.94 US cents, 55.13 Pence Sterling, 75.63 Yen and 62.15 Euro cents.
Iron Ore futures suggest a 0.2 per cent gain.
Gold has gained $2.30 to US$1330 an ounce.
Silver was up $0.07 to US$14.81 an ounce.
Oil fell $0.30 to US$52.95 a barrel.