Wall Street tumbles as tariff fears reignite: Aus shares to open flat

Market Reports

by Anna Napoli

The local sharemarket looks set to open flat following a turbulent week for markets. Wall Street closed lower on Friday as President Trump again ignited US-China trade fears with the announcement of more tariffs. Stocks in Caterpillar and Deere were among the casualties, both fell more than 1.5 per cent. Tech stocks were also hit hard with the Philadelphia Semiconductor index down 1.6 per cent. 

US economic news

Non-farm payrolls (employment) rose by 164,000 in July (forecasts +160,000). Job gains in May and June were trimmed by 41,000. The jobless rate was steady at 3.7 per cent as expected. Hourly earnings rose 0.3 per cent (forecast +0.2 per cent) All in all, the report mostly met expectations. The job gains pushed the size of the U.S. labor force to a record high and wages topped analyst's estimates.

Local economic news

The week kicks off today with the release of services surveys from AiGroup and CBA and the Melbourne Institute’s inflation data is issued for July. On Tuesday all eyes will be on the Reserve Bank Board when announces its interest rate decision at 2.30pm. Also on Tuesday, the Bureau of Statistics (ABS) releases international trade data. On Wednesday, the ABS issues new lending data for June and AiGroup releases the Performance of Construction Index for July. Rounding out the week on Friday the Reserve Bank releases its Statement of Monetary Policy. All eyes with be on the Board’s economic (GDP) growth and inflation forecasts.

Markets

Wall Street closed lower on Friday: The Dow Jones Industrial Average lost 0.4 per cent to close at 26,485, the S&P 500 dropped 0.7 per cent to close at 2932 and the NASDAQ fell 1.3 per cent to 8004.

European markets closed lower on Friday: London’s FTSE fell 2.3 per cent, Paris lost 3.6 per cent and Frankfurt was down 3.1 per cent.

Asian markets closed lower on Friday: Tokyo’s Nikkei fell 2.1 per cent, Hong Kong’s Hang Seng dropped 2.4 per cent and China’s Shanghai Composite closed lower, down 1.4 per cent.

Taking all of this into equation, the SPI futures are pointing to flat start. On Friday, the Australian share market closed 20 points (0.3 per cent) lower at 6769.

Company news

Rugby League Club the Brisbane Broncos (ASX:BBL) have announced that the net profit before tax for the Group for the half year ended 30 June 2019 is expected to be approximately $1.3 million compared to $3.02 million for the year earlier period. The company says game day profits were impacted by crowd shortfalls. The full year forecast net profit before tax is expected to be in line with the prior corresponding period. Shares in Brisbane Broncos (ASX:BBL) closed flat at $0.45 on Wednesday.

Ex-Dividends

Djerriwarrh Investments (ASX:DJW) is paying 10 cents fully franked
WCM Global Growth (ASX:WQG) is paying 2 cents unfranked

Currencies

One Australian Dollar at 7:40 AM was buying 67.97 US cents, 55.95 Pence Sterling, 72.45 Yen and 61.18 Euro cents.

Commodities

Iron Ore futures suggest a 2.1 per cent fall
Gold has added $25.10 to US$1458 an ounce.
Silver was gained 5 cents to US$16.23 an ounce.
Oil has added $1.24 to US$55.19 a barrel.