Aus shares to start the week lower: IOOF to acquire NAB's wealth business

Market Reports

by Anna Napoli

The local market is expected to start the week lower as earnings season comes to a close. The reporting season has been the worst since the last recession in terms of earnings, the focus on earnings has also led to underperformance in the ASX which is lagging behind Wall Street, with the S&P500 and the Nasdaq both hitting record highs on Friday
Walmart and Coca-Cola led the gains for the Dow, rising 2.7 per cent and 3.3 per cent, respectively. Tech and energy were the best-performing sectors in the S&P 500, gaining 1.1 per cent and 1.9 per cent, respectively.Investor sentiment was supported by reports that President Trump was willing to sign the $1.3 billion coronavirus relief bill.

Global oil prices fell on Friday. Hurricane Laura passed through oil installations in Louisiana and Texas without causing widespread damage. But expectations for global oil demand remain bearish. Our energy sector could come under pressure today as a result. The materials sector could fare better after base metal prices rose on Friday. And the Aussie dollar is at its highest level since late 2018 which could also weigh on the market.

Markets

To the figures from around the globe: Wall Street closed higher on Friday: The Dow Jones Industrial Average gained 0.6 per cent to close at 28,654, the S&P 500 gained 0.7 per cent to close at 3508 and the NASDAQ closed 0.6 per cent higher at 11,696.

European markets closed lower: London’s FTSE lost 0.6 per cent, Paris dropped 0.3 per cent and Frankfurt closed 0.5 per cent lower.

Asian markets closed mixed, Nikkei lost 1.4 per cent, Hong Kong’s Hang Seng gained 0.6 per cent and China’s Shanghai Composite added 1.6 per cent.

Taking all of this into equation, the SPI futures are pointing to a 0.7 per cent fall.

On Friday, the Australian share market fell 0.9 per cent to close at 6074.

US economic news

The Commerce Department said U.S. consumer spending rose 1.9 per cent in July, topping a Reuters forecast of a 1.5 per cent gain. Personal income also beat expectations rising 0.4 per cent versus a forecast drop of 0.2 per cent.

Local economic news

Today the ABS releases the Business Indicators publication as well as a survey of COVID impacts on the household sector for August.
And the Reserve Bank releases Private sector credit data while the monthly inflation gauge is due from the Melbourne Institute. On Tuesday The Reserve Bank Board meets but no change in rates is expected. AiGroup’s Manufacturing survey is also due. On Wednesday the ABS releases National Accounts for the June quarter on Thursday July international trade data (exports and imports) is due from the ABS while construction gauge is scheduled from the AiGroup. Finally on Friday ABS final detailed retail trade estimates for July are due.

Company news

All eyes will be on IOOF today following media reports in the Australian that the company is set to launch a $1 billion raising to acquire NAB’s wealth business. The company will also hand down it’s full year results today. Shares in IOOF Holdings (ASX:IFL) were placed on the trading halt on Thursday and last traded at $4.63.

Currencies

One Australian Dollar at 7:40 AM was buying 73.63 US cents, 55.16 Pence Sterling, 77.63 Yen and 61.83 Euro cents.

Commodities

Iron Ore has gained 1.8 per cent to US$124.37.
Iron Ore futures suggest a 1.6 per cent gain.
Gold has added $42.30 to US$1975 an ounce.
Silver was up $0.59 cents to US$27.79 an ounce.
Oil has lost $0.07 to US$42.97 a barrel.