Energy shares dragged Wall Street slightly lower on Monday, coinciding with a decline in oil prices. Photo: Michael NagleLocal shares are poised to follow Europe and Wall St lower amid earnings’ misses. Oil slid overnight. $A flat.
What you need2know
SPI futures down 24pts or 0.5% to 5212 at about 6.45am Sydney time
AUD fetching 77.15 US cents, 85.79 Japanese yen, 68.45 Euro cents and 53.27 British pence
On Wall St, Dow -0.2%, S&P 500 -0.2%, Nasdaq -0.2%
In Europe, Stoxx 50 -0.8%, FTSE -0.8%, CAC -0.5%, DAX -0.8%
In London, Anglo -7.3%, BHP -5.8%, Glencore -4.2%, Rio -4.2%
Spot gold +0.4% to $US1237.90 ounce at 3.39pm New York time
Brent crude -1.2% to $US44.55 barrel at 3.13pm New York time
Iron ore -0.4pc to $US66.07 tonne
What’s on today
Local data: None
In Washington on Tuesday, the Fed’s Open Market Committee begins two-day meeting.
Connecticut, Delaware, Maryland, Pennsylvania and Rhode Island hold primary elections. At stake are 172 delegates for the Republican candidates and 463 delegates for the Democratic candidates.
The US Chamber of Commerce and the American Chamber of Commerce in China host the 7th China Business Conference. Former New York City Mayor Michael Bloomberg is this year’s honoree. Former Secretary of State Madeleine Albright will be one of the conference speakers. 15:00 EDT in Washington. Through April 27.
Overseas data: US durable goods March, US S&P/Case-Shiller home-price index (Feb.), US Markit services PMI (April), US consumer confidence (April), Richmond Fed manufacturing (April).
Overseas earnings: Apple, Twitter, AT&T, eBay, Coach, Simon Property, 3M, DuPont, Eli Lilly, P&G, Lockheed Martin, Corning, Barrick Gold, Bank of China Ltd, Swedbank, Bayer, BP, Fiat Chrysler
The yuan weakened 0.09 per cent against the dollar after the People’s Bank of China set the reference rate 0.34 per cent lower at 6.5120, the lowest level since March 28. Economists now see the central bank keeping rates on hold, leaving the benchmark one-year lending rate at a record low of 4.35 per cent through the third quarter before cutting it to 4.1 per cent in the fourth quarter, according to an April 15-20 survey by Bloomberg.
The yen strengthened 0.8 per cent to 110.90 a US dollar, as traders dialed back bets on what degree of additional stimulus is expected from the Bank of Japan may weaken the currency. Japan’s currency slid 2.1 per cent on Friday as Bloomberg reported the BOJ may consider helping banks lend by offering a negative rate on some loans.
“The BOJ is already so long into ‘the reflationary trade’ that it has to continue to deliver further accommodation for the time being,” Goldman strategists Silvia Ardagna, Robin Brooks and Michael Cahill wrote in a report. Authorities will probably focus more on asset purchases than on interest-rate policy and the yen will probably weaken to 130 in a year, they said.
The British pound rose to a ten-week high after US President Barack Obama urged UK citizens to vote to stay in the European Union in a June referendum. Since the official campaign started just over a week ago, pro-Europeans have taken the lead, with the Bloomberg Brexit Tracker putting the probability of an EU exit at about 20 per cent.
The Chinese steel rally driving the price of iron ore is “only starting”, Credit Suisse says. Futures for rebar extended gains on Monday, ending 0.9 per cent higher at 2643 yuan ($US407) a metric ton on the Shanghai Futures Exchange. The price of the product used to strengthen concrete advanced for an 11th week through Friday, adding 14 per cent.
The recent spike in speculative trading in commodities in China has stunned global markets, according to Morgan Stanley, which cited a jump in local activity for steel, iron ore and cotton as well as eggs and garlic. “Now China’s speculators engage commodities,” analysts including Tom Price and Joel Crane said in an emailed note on Monday.
Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said he expects the value of Saudi Arabian Oil Co. to exceed $US2 trillion as the kingdom prepares to sell part of the company in what could be the world’s largest initial public offering. The valuation of the oil producer known as Saudi Aramco hasn’t been completed, Prince Mohammed said in an interview with Saudi-owned Al Arabiya television.
Energy shares dragged Wall Street slightly lower on Monday, coinciding with a decline in oil prices, while earnings and guidance from companies including Perrigo and Xerox also weighed on US stocks.
The Dow Jones industrial average fell 26.3 points, or 0.15 per cent, to 17,977.45, the S&P 500 lost 3.78 points, or 0.18 per cent, to 2087.8 and the Nasdaq Composite dropped 10.44 points, or 0.21 per cent, to 4,895.79.
Charter Communications won US antitrust approval for its $US55 billion takeover of Time Warner Cable, which would create the No. 2 US cable provider, after agreeing to measures intended to protect distribution of online video.
Morgan Stanley equity strategists see further downside to European earnings estimates. The bank projects that profits at Stoxx Europe 600 Index companies will slide 5 per cent this year because of weak global growth, headwinds from the commodity and financial sectors and evaporating currency tailwinds. That’s more bearish than the average analyst forecast of 2.2 per cent, which has already been cut from 8.2 per cent six months ago.
European shares declined for a third day as energy and commodity producers slid, while investors assessed growth prospects following worse-than-expected German business-confidence data.
Anglo American and BHP Billiton fell at least 5.8 per cent, leading miners to the biggest decline of the 19 industry groups on the Stoxx Europe 600 Index, as base metals retreated. Royal Dutch Shell lost 2.2 per cent, dragging oil companies lower as crude slid. Royal Philips dropped 4.3 per cent after saying it is considering an initial public offering of its lighting business.
The Stoxx 600 slipped 0.5 per cent to 346.68 at the close of trading, paring earlier declines of as much as 0.9 per cent. Germany’s benchmark DAX Index slid 0.8 per cent after a report showed business confidence in Europe’s biggest economy unexpectedly deteriorated in April.
What happened Friday
A rally in Australian shares fizzled on Friday as investors took profits in mining and energy stocks, but the market closed solidly higher for the week as global growth fears continued to recede.
The local market has now almost made up the losses for the year, with the benchmark S&P/ASX200 index closing down 0.7 per cent on Friday but 1.5 per cent higher for the week to 5236.4, or just shy of the 5295 mark with which it began the year. The broader All Ordinaries fell 0.7 per cent on Friday but rose 1.4 per cent over the week to 5299.2.
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This story Administrator ready to work first appeared on Nanjing Night Net.