Australian futures are pointing to a weak start after the Dow dropped almost 300 points in late session trade, on President Donald Trump’s comments that a news conference will be held tomorrow regarding China. Relationships between the 2 countries have been strained of late with President Trump blaming the coronavirus pandemic on China and Beijing choosing to move forward with national security legislation for Hong Kong. The Australian National Cabinet will meet today to discuss how the lifting of lock down restrictions has progressed across the country and to develop public transport guidelines. This follows the $60 billion accounting error that saw the Federal Government wildly overestimate the cost and take-up of the JobKeeper scheme.
US economic news
The US Commerce Department reported that gross domestic product, the broadest measure of economic health, fell at an annual rate of 5 per cent in the first quarter. This is worse than the bearish 4.8 per cent drop the market anticipated. The decline was driven by a sharp decrease in consumer spending. GDP is expected to contract even more in the current April-June quarter.
Local economic news
We are expecting the Reserve Bank of Australia to release private sector credit data for the month of April, with punters expecting an increase of 0.9 per cent, following last month’s 1.1% rise.
Wall Street closed lower yesterday: The Dow Jones Industrial Average closed 0.58 per cent lower at 25,401, the S&P 500 lost 0.21 per cent to 3030 and the NASDAQ fell 0.46 per cent to 9369.
European markets higher, London’s FTSE gained 1.2 per cent, Paris added 1.8 per cent and Frankfurt closed 1.1 per cent higher.
Asian markets closed mixed, Tokyo’s Nikkei gained 2.3 per cent, Hong Kong’s Hang Seng fell 0.7 per cent, and China’s Shanghai Composite closed 0.3 per cent higher.
Taking all of this into equation, the SPI futures are pointing to a 0.3 per cent fall. Yesterday the Australian share market stormed to a strong finish fueled by the strong performance from the big four banks and Reserve Bank governor Philip Lowe’s comments that the economy is progressing better than was earlier feared. Yesterday, the Australian share market closed 1.32 per cent higher at 5,851.
Nine Entertainment Co Holdings (ASX:NEC) has revised its contract with the NRL for the next three years. Season 2020 kicked off last night, as a shortened 20-round season, with the grand final now scheduled for the 25th of October. The State of Origin series will then take place once the regular season has wrapped up. Under the revised contract, Nine expects to see a $27.5 million benefit during FY2021 and FY2022 due to the changes in rights fee and associated production and services arrangements. Nine’s pervious cost guidance estimated a $289 million decrease in costs as a result of the cancellation of the NRL’s 2020 season. This has now been revised down to a $225 million saving. Shares in Nine Entertainment (ASX:NEC) closed 2.95 per cent lower at $1.48 yesterday.
One Australian Dollar at 7:00 AM was buying 66.38 US cents, 53.92 Pence Sterling, 71.45 Yen and 59.94 Euro cents.
Iron Ore gained 1.8 per cent to US$97.09.
Iron Ore futures suggest a 1.9 per cent gain.
Gold has gained $5.30 to US$1732 an ounce.
Silver has added $0.16 to US$17.92 an ounce.
Oil was up $0.84 to US$33.65 a barrel.