Research

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Market Opener - 19 Jun 2017

 
Local Markets Commentary

The Australian market looks set to edge higher after Wall Street closed mixed over the weekend.

Last week's unexpectedly positive jobs numbers have boosted optimism about the economic outlook. However there’s no expectation RBA governor will hint at a rate hike in Australia any time soon when he speaks t a leadership forum event at The Australian National University in Canberra at 9.45am (AEST).

Over the weekend, the big news was Amazon's decision to buy US grocery retailer Whole Foods, which will shift the e-commerce giant into a major bricks and mortar presence in the US.

Grocery store stocks dropped sharply in New York on Friday after the announcement, with investors seeing huge disruption in that sector.

In Australia, it could cause some investors to rethink their positions in Wesfarmers and Woolworths.

In commodities trade overnight Friday, the spot price of iron ore rose 0.9% to $US55.75 a tonne.

However higher premiums on mainstream cargoes were reported from the seaborne iron ore market on Friday amid a pick-up in demand, according to Metal Bulletin.

Both mills and traders were heard to have made more enquiries for higher-ranked 62 per cent Fe Australian fines as well as lumps this week.

Base metals were mixed. Gold prices traded in a very tight range, closing nearly unchanged on Friday.

US energy firms added oil rigs for a record 22nd consecutive week, but the pace of those additions has slowed in recent months as crude prices have dropped to 2017 lows despite OPEC-led efforts to end a global supply glut, energy services firm Baker Hughes said.

This week is a very quiet one for economic data across the globe, and even quieter in terms of scheduled corporate events or releases locally as we count down to EOFY.

Outside of unscheduled announcements, Australian listed companies go into a pre-EOFY blackout for the next two weeks.

The $A is US$0.762c.

Overseas Market Commentary

Major US stock indexes ended little changed over the weekend despite Amazon.com's $18b cash deal to buy Whole Food, which hit retail shares such as Wal-Mart, Costco and Target.

Energy sector shares helped bolster the S&P 500 and the Dow industrials, but Apple continued to weigh on the Nasdaq.

The FTSE 350 Food & Drug Retailers Index slid 3% as Tesco plunged to the lowest level since September. Ahead of Brexit talks starting today, European stocks advanced for the first time in three days on Friday as a rally in food and beverage firms offset a plunge in retailers.

The Stoxx Europe 600 Index rose 0.7% at the close. Auto makers outperformed after data showed European car sales rebounded in May.

Analysts expect European companies to report stronger profit growth than US peers for a third consecutive quarter, thanks to a recovery in the euro area after years of sluggish growth.

Across the Tasman, the Reserve Bank of NZ is expected to leave interest rates at 1.75% and continue to suggest that it is not going to hike rates until sometime in late 2019.

 
19/06/2017 8:05:21 AM

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