Morning Markets: Strong Apple Q3 lifts tech shares, suppliers
Watchlist
- EU: PPI (0900 GMT)
- US: ADP national employment report (1215 GMT)
- US: EIA weekly petroleum status report, incl. crude oil stocks (1430 GMT)
Apple posted strong third-quarter results Tuesday with Apple Watch shares up 50% over last year and earnings-per-share coming in at $1.67, well ahead of the $1.57 forecasted by analysts.
The firm's earnings lifted shares on the Hang Seng index, whose tech sector gained 0.8% driven by a surge in Apple supplier AAC Technologies, whose stock soared by as much as 8.7% in a strong Tuesday session.
The index is now up 25.8% year-to-date.
The oil oversupply narrative returned to the forefront overnight with WTI prices dropping 0.8% and Brent prices dropping 0.9% in response.
Today sees the release of the US Energy Information Administration's weekly petrolem status report at 1430 GMT. Analysts expect inventories to rise, placing further pressure on crude prices.
In FX markets, the Aussie dipped below 0.80 versus USD on the back of the Reserve Bank of Australia's statement of concern over currency strength while the NZD was the biggest loser, dropping by as much as 0.7% versus USD on the back of a weak employment print.
Today sees the European Union releasing PPI data at 0900 GMT with the US out with the latest ADP employment data at 1215 GMT.
Market signals
Asian session
- Sliding crude prices weighed on investor sentiment in Asian markets
- US crude oil fell back below $50/barrel
- Tech shares rose in Tokyo and Seoul in the wake of Apple's gain on the Nasdaq
- The Nikkei 225 was up 0.54% to 20,094.06 at 0405 GMT
- Korea's Kospi Composite was up 0.30% to 2,430.13 at 0515 GMT
- About $240bn in foreign investment will flood into India and ASEAN by 2025: Nomura
- A rally in the Shanghai Composite could see it break key resistance at 3,300
- Heavy falls for energy explorers weighed on Australia's S&P/ASX200
- Australia's building approvals rose 10.9% in June, after a 5.6% fall in May
- Markets are awaiting the release of US nonfarm jobs data due out on Friday
Forex ahead
- The Australian dollar was down 0.16% at $0.7966 as of 0755 GMT
- USD regained some of the ground it lost against the yen, USD index gains 0.1%
- The dollar reached ¥110.82, off a low of ¥110.28 overnight
- EURUSD punches above the 1.18 handle again
From the Floor
Apple power. “The technology sector was really gaining on the back of Apple earnings,” says Garnry.
BoE tomorrow. “[There’s] a lot of tension over whether the BoE is poised to hike rates after some pretty split votes recently,” says Hardy.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
In opinion
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Tthe surging euro complicates any European Central Bank plans to start normalising monetary policy as it makes the bank's 2% inflation goal harder to reach, says James Picerno.
Steel revival
Iron ore has stormed higher as mills in China benefit from rising product prices, which in turn aids miners including Rio Tinto, BHP Billiton, and Vale, says Saxo Capital Markets Australia.
Crude pessimism
Oil prices have retreated on a lack of solid data to support any optimism about a rebalancing of global supply and demand, says the team at Saxo APAC sales trading.
Xi's long haul
With help from strong economic growth and an anti-corruption drive, Chinese president Xi Jinping is galvanising power in the run-up to this year’s party congress, writes Andrew Bresler.
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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