Article / Friday at 0:52 GMT

Today's Trade: ASX jumps above 6000

Trading Desk / Saxo Capital Markets
Australia
  • S&P/ASX 200 share index jumps 0.6% to a one-week high of 6012 in early trade
  • AUD holds relatively steady, awaiting news on jobs from the US overnight
  • Energy stocks, buoyed by stronger oil prices, are the big winners 

By Saxo Capital Markets

Overnight and early trading

The Aussie banks and energy shares are making the big plays in early trading on the ASX, with the index up around 0.6% in the first hour or so of trading.

Banks are doing the heavy lifting again with Westpac up 1.2% and CBA up 1.1% amid bargain hunting after the Royal Commission news added to the regulatory discount in banks recently.

Energy stocks are strong with Origin enjoying a 3.5% jump and Oil Search up 1.3% after Brent crude rose 1.4% to $62.10/barrel overnight.

The Australian dollar was at US75.13c, remaining under pressure ahead of key US jobs data tonight. 

US stocks rose as investors evaluated the outlook for a final tax bill while the dollar advanced for a fourth day and oil rebounded from its worst selloff in two months.

The S&P 500 ended a four-day losing streak, with industrial and consumer discretionary shares among the best performers in a modest but broad rally that saw two stocks gain for every one that dropped. 

Gold fell to a four-month low. The pound jumped on speculation that Ireland and Britain were close to a Brexit deal. Brazil’s real and stocks tumbled amid growing skepticism a pension overhaul will be passed this year.

xxx
 Higher oil prices lift shares but also mean pain at the pump. Photo: Shutterstock

Rising shares of Boeing and other industrial companies pushed major US indices higher Thursday.

The gains put US stocks on the rebound after recent declines. The S&P 500 logged declines in the previous four trading sessions, while the Dow Jones Industrial Average had fallen for two consecutive sessions. 

The Nasdaq Composite declined in three of the past four.

The market looked optimistic that Republicans would complete a tax overhaul and lawmakers would reach a deal to avoid a government shutdown which made headlines after close of market that the US House passed a bill to fund the government through to December 22.

The Dow Jones Industrial Average gained 70.57 points, or 0.3%, to 24211.48. The S&P 500 rose 7.71 points, or 0.3%, to 2636.98, while the Nasdaq Composite added 36.47 points, or 0.5%, to 6812.84. It was the biggest gain for all three indexes in a week.

Shares of industrial companies rose 0.9% in the S&P 500. Boeing gained $3.70, or 1.3%, to $281.97, making it one of the biggest contributors to the Dow. 

Shares of Boeing have jumped 81% this year on a series of upbeat profit reports, fueling much of the blue-chip index’s 2017 gain. Caterpillar added 2.55, or 1.8%, to 142.89 Thursday.

Several airliners also rose. Southwest Airlines gained 1.90, or 3.1%, to 63.02 after it said capacity and traffic for November rose, boosting its outlook for the fourth quarter. 

Shares of American Airlines Group rose 1.27, or 2.6%, to 50.88, while Alaska Air Group added 1.54, or 2.3%, to 69.37.

Shares of technology companies in the S&P 500 rose 0.6% to extend their gains through a third consecutive day. 

Tech companies had fallen in prior sessions, as investors sold those stocks and moved into shares of companies they expected to benefit more from Republicans’ sweeping tax overhaul. Industrial firms also had been struggling this month.

Some analysts expect stocks to continue to wobble until there is a meaningful development on tax cuts. The Senate voted Wednesday to start formal negotiations with the House to advance final legislation.

Investors also are looking for further clarity on the US economic picture, with monthly employment data due tonight. Economists across the street are expecting for payrolls to grow by 195,000 last month.

The number of Americans filing applications for new unemployment benefits fell last week, according to the Labor Department, suggesting the labor market continues to tighten.

In Europe, data Thursday showed the eurozone economy grew 0.6% in the third quarter, a continuation of the region’s strong performance this year.

The Stoxx Europe 600 rose less than 0.1%.

Information sources: Bloomberg, TradingFloor.com, WSJ.com, CNBC

Local markets and commodities

  • S&P/ASX 200 Index futures are up 0.3% to 5998. Futures relative to fair value suggest an early gain of 0.4%.
  • Bank of New York Australia ADR Index is up 0.2% to 262.6, BHP Billiton ADRs are down 0.2% to A$27.32 equivalent, a 0.7% premium to last Sydney close, Rio Tinto ADRs are down 0.9% to A$62.65 equivalent, a 9.8% discount to last Sydney close.
  • Gold slid to its lowest in four months on Thursday as a bounce in the dollar sparked by optimism over US tax reform plans helped break the metal out of its recent narrow trading range. Prices had been hemmed between $1,265/oz and $1,300/oz since mid-October as a series of record highs in stock markets detracted investment interest from bullion, and as traders awaited an expected increase to US interest rates this month.  
  • Spot gold plunged 1.4% at $1,248.20/oz. US gold futures for December delivery were 1.41% at $1,248.30/oz. Gold is now awaiting further direction from US non-farm payrolls data this week, a key barometer of the U.S. economy. Next week the Federal Reserve is also expected to announce another rise in U.S. interest rates and to offer guidance on the pace of further increases. Gold stocks in Toronto added 0.22% overnight. Gold stocks: GOR, NCM, NST, AQG, EVN, KCN, RMS, RRL, SAR, SLR.
  • The bad news bears took a deep breath on a day when there was no price-rattling data to agonise over and oil inched up as a result. A day after fears over mounting US fuel inventories sent future prices spiraling downward, they clawed back a portion of their descent, gaining 1.3% in New York. Oil is on track for a second yearly gain after Opec and partners including Russia agreed to extend supply cuts through all of next year. 
  • West Texas Intermediate for January delivery rose 73 cents to settle at $56.69/barrel on the New York Mercantile Exchange. Total volume traded was about 25% below the 100-day average. Brent for February settlement added 98 cents to end the session at $62.20/oz on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $5.45 to February WTI. Oil stocks: WOR, WPL, STO, SEA, BPT, OSH, HZN, AWE, KAR, ORG, SXY.
  • Iron ore prices sunk further, with most action in the spot physical market. Investors continue to fret about the outlook for demand in China. However they also got a reminder of the potential reaction from producers if prices push too high. Vale has warned that it has up to 50 million tonnes of spare capacity in iron ore available to balance the market if needed. The company remains concerned that high prices would bring back unwanted excess in the market and is thus mindful of keeping prices from surging too high. Spot iron ore added 1.9% or $1.31 to close at $66.22. Iron ore stocks: FMG, BHP, GBG, GRR, MGX, RIO, BCI, SDL.
  • Benchmark copper on the London Metal Exchange closed 0.2% higher at $6,564/t. Copper, which has gained 19% this year, fell on Tuesday to $6,507.50/t, its weakest since October 10. LME three-month aluminium shed 0.4% to finish at $2,010/t after touching a four-month low of $1998.50/t. A confirmed break of support at the 200-day moving average of $2000/t would open the way to further selling. Some Japanese aluminium buyers have agreed to pay some global producers a premium of $103/t for shipments in the first quarter of next year, higher than the $94-$95 premium in the current quarter. Nickel climbed 2.2% to close at US11,045/t, rebounding after touching a new two-month trough of $10,740/t. Copper stocks: OZL, SFR; Nickel stocks: IGO, WSA; Aluminium stock: AWC
  • In other news: ASX (ASX AU): Blockchain Scores Major Win as Aussie Exchange Plans ShiftBHP Billiton; BHP AU: Iron Ore Cargoes From Top Miners 22.5M Tons This Week: Bernstein; Crown Resorts (CWN AU): CrownBet Chief Said to Buy Crown’s 62% Stake: Australian; CSL (CSL AU): IPR Challenge to Shire Patent on Cinryze Rejected by PTAB; Independence Group (IGO AU): AngloGold, Tropicana JV Approve Phase 1 of Long Island Strategy; Metcash (MTS AU): Drakes, Wholesale Customer With A$1b Sales, Said to Seek Better Supply Terms: AFR; Sims Metal (SGM AU): Says Stephen Mikkelsen to Start as CFO Feb. 1, 2018; Synlait Raises (SM1 AU): Raises Full-Year Canned Infant Formula Volume Forecast.

Broker regradings

- ASX (ASX AU): Downgraded to Sell at UBS; PT A$52.90
- AGL Energy (AGL AU): Upgraded to Buy at Goldman
- Galaxy Resources (GXY AU): Raised to Accumulate at Hartleys Ltd; PT A$3.73
- Navitas (NVT AU): Downgraded to Hold at Blue Ocean; PT A$5.20
- Origin Energy (ORG AU): Upgraded to Buy at Goldman
- Sigma Healthcare (SIG AU): Downgraded to Hold at Morningstar

Australian corporate events

Friday: WBC AGM

XPTUSD

This month, platinum (XPTUSD) has fallen more than 5% and now five consecutive daily losses have been printed.  

Along with silver (XAGUSD), XPTUSD’s year to date return is negative (1.3%) unlike gold which is up 9%.

XPTUSD is now trading at the previous double bottom (893.60) that was formed during May and July this year. The next support level would be 886.30 that corresponds to Dec 16 low.

XPTUSD monthly chart
Source: Saxo Bank

 
Today's Trade information sources: AFR, SMH, CNBC, BBG, WSJ, The Australian, Reuters

--Edited by Adam Courtenay

Today’s Trade is compiled by the Sydney trading desk at Saxo Capital Markets


Today's Trade is brought to you by Saxo Capital Markets (Australia) Pty Ltd ABN 32 110 128 286, AFSL 280372 (Saxo Capital Markets), in association with TradingFloor.com which is the property of Saxo Bank A/S, the parent company of Saxo Capital Markets. TradingFloor.com is a social trading facility offering clients of Saxo Bank Group access to in-depth market news, commentary, analysis and much more.
The content of the daily outlook should not be considered as a ‘personal’ or specific investment advice catered for your specific need, objectives or financial situation, or be construed as an express or implied promise, guarantee or implication by Saxo Capital Markets that clients will profit from the strategies expressed or that losses in connection therewith can or will be limited.
None of the information contained in the daily outlook constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy. Saxo Capital Markets; TradingFloor.com shall not be responsible for any loss arising from any investment based on any forecast or other information contained in the daily outlook. Past performance is not a reliable indicator of future performance. Information contained in this daily outlook may have previously been distributed to; and acted upon; by other clients and persons who have shown interest in Saxo Capital Markets, as well as internal affiliates/employees of Saxo Capital Markets. Any trade ideas or positions contained herein relating to products or services offered by Saxo Capital Markets may be inconsistent to trades/positions entered into by Saxo Capital Markets and/or its affiliates. Further, any information contained may consist of opinions and views of the ‘Sales Trading Desk’ as a team, however does not reflect the ‘specific’ opinion of Saxo Capital Markets.
Trades in accordance with the information contained in the daily outlook, especially, but not limited to, leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the daily outlook do not occur as anticipated. Prior to making any investment or entering into any transaction, you should carefully consider your financial situation and consult your independent financial expert in order to understand the risks involved and ensure the suitability for you of any investment or transaction decision you enter. Any information or opinions in this material are not intended for distribution to, or use by, any person in any jurisdiction or country where such distribution or use would be unlawful. Please refer to our Combined Financial Services Guide & Product Disclosure Statement available via www.saxomarkets.com.au. Please also consider whether acquiring or continuing to hold financial products is suitable for you, prior to trading and investing.
If you would like to unsubscribe from the Daily Outlook, please reply ‘Opt Out’ to this email with your Client ID.
Terms & Agreement | Disclaimer | Financial Services Guide | Privacy Policy | Contact Us |
SAXO CAPITAL MARKETS (AUSTRALIA) PTY LTD
LEVEL 25, 2 PARK STREET SYDNEY NSW 2000 AUSTRALIA

Relevant articles for you

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail