MORNING MARKETS 26-06-19

I have been travelling this week so apologies for lack of updates…

The ASX 200 is down 11 points in mid morning trade, better than futures. Fed not as dovish as the market wants! H’care best sector, God, REITS, Telcos and IT lag. CSL notes that housing demand is on the up, FBU facing headwinds in AU, APT defers SPP and it’s quiet on the data front #ausbiz

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TODAY

No economic data of note.


COMPANY NEWS

  • CSR AGM – Bullish comments about demand for housing, but timing of positive impact is difficult to determine.

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  • Fletcher Building (FBU) – Investor Day

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OVERNIGHT

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SPI FUTURES -36

US EQUITIES – S&P 500 -28 (-0.95%), Dow -179 (-0.67%), NASDAQ -121 (-1.51%).

Major themes

  • US-Iran tensions – Sanctions against Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials continue to weigh, while Trump said the US would obliterate parts of Iran if it attacked “anything American.”
  • A senior US official says President Trump is “comfortable with any outcome” from U.S.-China talks at the G-20 summit.
  • Fed Chairman Jay Powell downplays need for aggressive rate cut during an appearance at the Council on Foreign Relations.
  • Microsoft weaker after an analyst at Jefferies raised concerns about the company’s cloud service, Azure, and its success relative to rival Amazon Web Services

EUROPEAN MARKETS – Mostly lower. STOXX600 -0.10%, UK FTSE +0.08% again the exception, German DAX -0.38%, French CAC -0.13%

CURRENCIES

  • The USD is lower at 96.00.
  • The Aussie dollar is stronger at US69.64.

BONDS – 2-yr: -4 bps to 1.74%, 3-yr: -5 bps to 1.69%, 5-yr: -5 bps to 1.75%, 10-yr: -5 bps to 2.02%, 30-yr: -4 bps to 2.55%, The 10 year is down 88bps over the year.

COMMODITIES

  • Oil – WTI futures rose 0.1% to US$57.83. Rising US-Iranian tensions and imminent stocks data were the key factors
  • Iron Ore – IRESS has iron ore down US$1.50 at US$117.00 a tonne. CommSec has iron ore down 10c US$2.55 or or 2.2% US$116.30 a tonne.   
  • Gold trading at highest level in 6 years at $1,418.70 an ounce, up just a touch, on geopolitical tensions and expectations of lower interest rates.
  • LME metals – All stronger. Cu +0.74, Ni +0.82%, Al +0.72%

ECONOMIC DATA, NEWS & POLITICS

US economic data – S&P Case-Shiller Home Price Index 2.5% (consensus 2.5%; prior 2.6%) and April FHFA Housing Price Index 0.4% (consensus 0.2%; prior 0.1%); June Consumer Confidence 121.5 (consensus 132.0; prior 131.3) and May New Home Sales 626,000 (consensus 683,000; prior 679,000)


GLOBAL MARKETS LAST WEEK – Three cheers to celebrate the Central Bank liquidity party. Not sure I want to wait for the hangover…China (+4.16%) the highlight, while the French CAC (+2.99%) gets an honourable mention and US tech stocks outperform. Oil +9.69%, iron ore +6.22 and I did a double take on the AUS10yr at 1.28%. What!!!!

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AUSSIE MARKETS LAST WEEK – Strong but undperformed global peers. TLS and CSL drag, GOLD, ENERGY and IT inners. What’s under the bonnet at VOC??? COL (+3.2%) in the limelight (I’m not convinced) and banks starting to claw back to pre RC levels (J4010 was 8251.1 on 12 March and now 8048.4)

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