Aus shares 180pts from all time high, ASX eyes a rise of 0.1% as Fed hints at rate cut

Market Reports

by Jessica Amir

US stocks closed higher with the Nasdaq up the most (0.4 per cent) on the US Federal Reserve hinting that a rate cut could be close.

The Fed kept interest rates unchanged at is two-day meeting, as expected. Expectations of lower rates has helped buoy Wall Street in May with the top three indices, The S&P 500, Dow and Nasdaq are all up more than 6 per cent in June.

Back home yesterday on the ASX, the Australian share market closed at a fresh high with the S&P/ASX 200 Index closing 1.2 per cent/78 per cent higher at 6,648 points. That is 180 points from the all-time high of 6,828.7 hit on 1 November 2007.

ASX futures are pointing to a rise of 9 points or 0.14 per cent.

US economic news

The US central bank announced it doesn’t expect to cut rates this year but did forecast one for 2020. The Fed’s target rate remained at 2.4 per cent for 2019, unchanged from its March projection.

Eight of the Federal Open Market Committee (FOMC) members say they are in favour of one rate cut this year. And nine of the 12 members expect rates will near 2.1 per cent by the end of 2020, down from their prior outlook of 2.6 per cent.

Local economic

No market moving economic data is due out today, however, all eyes will be on Reserve Bank Governor Philip Lowe’s speech at the Committee for Economic Development of Australia (CEDA) luncheon in Adelaide at 11.15am AEST.

Markets

Wall Street closed higher on Wednesday: The Dow Jones Industrial Average gained 0.2 per cent to 26,504, the S&P 500 added 0.3 per cent to close at 2926 and the Nasdaq closed 0.4 per cent higher at 7987.

European markets closed mixed: London’s FTSE fell 0.5 per cent, Paris added 0.2 per cent and Frankfurt lost 0.2 per cent.

Asian markets closed higher: Tokyo’s Nikkei gained 1.7 per cent, Hong Kong’s Hang Seng was up 2.6 per cent and China’s Shanghai Composite added almost 1 per cent.

Company news

The largest owner of Bunnings Warehouse sites in Australia, BWP Trust (ASX:BWP) announced it will release capital profits from the sale of four properties this year, and plans to issue a special distribution of 1.56 cents per unit, which will distribute a further $10.021 million to shareholders. It also advised for the six months to 30 June 2019, the ordinary distribution is forecast to be 9.18 cents per unit. This is in addition to the special distribution. Shares in BWP Trust (ASX:BWP) closed 1.1 per cent higher at $3.86 yesterday.

Mirvac Group (ASX:MGR) been unable to agree terms to sell its stake in Tucker Box Hotel Trust (Travelodge). The sale was expected to occur by the end of FY19. However, in good news Mirvac confirmed that without the sale, its FY20 EPS growth guidance will be over 3 per cent compared to FY19 (compared to over 2 per cent with the sale). Shares in Mirvac Group (ASX:MGR) closed 0.94 per cent lower at $3.18 yesterday.

Ex-dividends

Infratil Limited (ASX:IFT) is paying 9.6 cents unfranked
Kelly Partners Group (ASX:KPG) is paying 1.1 cent fully franked

Currencies

One Australian Dollar at 7:35 AM was buying 68.85 US cents, 54.46 Pence Sterling, 74.39 Yen and 61.31 Euro cents.

Commodities

Iron Ore futures suggest a 1.3 per cent gain.
Gold has added $13.60 to US$1364 an ounce.
Silver was up $0.16 to US$15.15 an ounce.
Oil gained $0.27 to US$54.38 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.