Fed cuts rates a quarter of a point: ASX poised to open higher

Market Reports

by Rachael Jones

Following positive leads from US markets, the Australian share market looks set to open higher this morning. Over in the US the Federal Open Market Committee lowered its benchmark funds rate by 25 basis points to a range of 1.5 per cent to 1.75 per cent. This was expected. The Fed also indicated that it may now pause rate cuts. Still in the US, Apple beat Wall Street’s expectations on revenue and earnings, despite iPhone sales down 9 per cent year-over-year. Apple services business has seen 18 per cent growth. And Facebook shares rose in after-hours trading after the company posted third-quarter earnings that exceeded analysts expectations.

Local economic news

International Trade Price Indexes, September 2019.

Building Approvals, September 2019.

Markets

Wall Street closed higher yesterday: The Dow Jones Industrial Average added 0.4 per cent to close at 27,187, the S&P 500 closed 0.3 per cent higher at 3047 and the NASDAQ gained 0.3 per cent to 8304.

European markets closed mixed: London’s FTSE added 0.3 per cent, Paris rose 0.5 per cent and Frankfurt lost 0.2 per cent.

Asian markets closed lower: Tokyo’s Nikkei lost 0.6 per cent, Hong Kong’s Hang Seng was down 0.4 per cent and China’s Shanghai Composite dipped 0.5 per cent.

Taking all of this into equation, the SPI futures are pointing to a 0.1 per cent lift.

Company news

Coles (ASX:COL) yesterday reported that the Coles Group Treasury has priced $600 million of fixed rate Australian dollar medium term notes, comprising $300 million of seven-year Notes and $300 million of 10-year Notes. The seven-year Notes were priced with a coupon of 2.2 per cent and the 10-year Notes were priced with a coupon of 2.65 per cent. The proceeds will be used to replace some of the bank debt facilities that were established at the time of demerger from Wesfarmers last year. Shares in Coles (ASX:COL) closed 1.13 per cent lower at $14.84 yesterday.

Ex–Dividend

MCP Income Opportunities Trust (ASX:MOT) is paying 1 cent unfranked
MCP Master Income Trust (ASX:MXT) is paying 0.88 cents unfranked

Currencies

One Australian Dollar at 7:40 AM was buying 69.01US cents, 53.50 Pence Sterling, 75.14 Yen and 61.91 Euro cents.

Commodities

Iron Ore futures suggest a 0.64 per cent lift.
Gold has added $7.20 to US$1498 an ounce.
Silver has gained 4 cents to US$17.87 an ounce.
Oil has fallen by $0.63 to US$54.91 a barrel.