Aus shares to open lower: tech slide continues

Market Reports

by Anna Napoli

Local shares are expected to open lower this morning however the rate of losses is expected to be much more moderate than Friday’s retreat. The Victorian Government’s extension of its lockdown may lead to more domestic economic concerns as hundreds of businesses remain closed. In the US stocks closed lower for a second day on Friday after a rollercoaster session which saw another steep decline in tech which was countered by gains in companies that would benefit from the economy reopening. Boeing shares rose more 1 per cent while bank stocks pushed higher. Facebook, Amazon and Alphabet all lost more than 2 per cent. Netflix slid 1.8 per cent and Microsoft dropped 1.4 per cent. The S&P 500 tech sector fell more than 4 per cent for the week. The tech rout came after the space drove the majority of the broader market’s rebound off the coronavirus lows. The sell off is being viewed by some commentators as a bout of profit-taking after a strong run. While others are concerned about high valuations that need correction. Equity volatility remained well above normal levels with the VIX volatility index at 30.75. Meanwhile the Aussie dollar hit a six day low on Friday of 72.22 cents. Copper rounded out its best finish in over 2 years at US $3.06 a pound. Brent crude oil futures fell 3.2 per cent to a new two-month closing low

US economic news

The U.S. unemployment rate fell to 8.4% last month from 10.2% in July, the Labor Department said. Economists expected a decline of 9.8 per cent.
Meanwhile, overall jobs creation, grew by 1.37 million in August, topping an estimate of 1.32 million.

Markets

To the figures from around the globe: Wall Street closed lower on Friday: The Dow Jones Industrial Average lost 0.6 per cent to close at 28,133, the S&P 500 fell 0.8 per cent to close at 3427 and the NASDAQ closed 1.3 per cent lower at 11,313.

European markets closed lower: London’s FTSE lost 0.9 per cent, Paris dropped 0.9 per cent and Frankfurt closed 1.7 per cent lower.

Asian markets closed lower, Nikkei lost 1.1 per cent, Hong Kong’s Hang Seng fell 1.3 per cent and China’s Shanghai Composite closed 0.9 per cent lower.

Taking all of this into equation, the SPI futures are pointing to a 0.6 per cent fall.

On Friday, the Australian share market fell 187 points or 3.1 per cent to close at 5926.

Local economic news

In the coming week, there are a number of key economic indicators and events to focus on. The payroll jobs & wages data, business and consumer confidence surveys and lending figures are the highlights.
The week kicks off with ANZ reports its job ads data for August, the AiGroup releases its services gauge and the Reserve Bank issues data on credit and debit card lending. On Tuesday. The ABS provides weekly payroll jobs & wages data, which could point to an employment drop in August. Also on Tuesday, the NAB business survey is released for August. On Wednesday, Westpac and Melbourne Institute’s September consumer confidence survey is released. Also on Wednesday, the ABS issues both the June quarter Labour accounts data the Lending indicators report for July. On Friday, the ABS releases tourism data for July.

Company news

Retirement village developer Summerset Group Holdings will launch a fixed rate retail bond offer of up to NZ$100 million of seven year fixed rate bonds maturing on 21 September 2027 to New Zealand institutional and retail investors. The indicative issue margin range for the bonds is 2.00% to 2.20% per annum. The issue margin and interest rate will be set following a book-build process on 11 September 2020. Shares in Summerset Group Holdings (ASX:SNZ) closed 1.49 per cent lower at $7.94 on Friday.

Ex Dividends
Ampol Limited (ASX:ALD) is paying 25 cents fully franked
ASX Limited (ASX:ASX) is paying 122.5 cents fully franked
AUB Group Ltd (ASX:AUB) is paying 35.5 cents fully franked
Bega Cheese Ltd (ASX:BGA) is paying 5 cents fully franked
Engenco Limited (ASX:EGN) is paying 1.5 cents fully franked
Equity Hl (ASX:EQT) is paying 43 cents fully franked
IOOF Holdings Ltd (ASX:IFL) is paying 11.5 cents fully franked
Nickel Mines Limited (ASX:NIC) is paying 1 cent unfranked
Orora Limited (ASX:ORA) is paying 5.5 cents unfranked
Peopleinfrastructure (ASX:PPE) is paying 4.5 cents fully franked
St Barbara Limited (ASX:SBM) is paying 4 cents fully franked
Schaffer Corp. Ltd. (ASX:SFC) is paying 35 cents fully franked
Sonic Healthcare (ASX:SHL) is paying 51 cents 30 per cent franked

Currencies

One Australian Dollar at 7:45 AM was buying 72.85 US cents, 54.96 Pence Sterling, 77.42 Yen and 61.55 Euro cents.

Commodities

Iron Ore futures suggest a 1.4 per cent gain.
Gold has dropped $3.50 to US$1934 an ounce.
Silver was down $0.16 cents to US$26.71 an ounce.
Oil has lost $1.60 to US$39.77 a barrel.