Day Trading Pre-market Open – 16 May 2019

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    Good morning traders. Thanks @ttward, @Ravgnome & the aftermarket loungers. The US markets thankfully showed a bit more resilience overnight.


    ASX Market Report


    The Australian share market has bounced back, recouping some of the losses from the previous day amid hopes that a deal was still within reach amid the US-China trade war. "Great to see the Aussie sharemarket rebound," said Bell Direct equities analyst Julia Lee. "It's very much a risk-on type of day."


    The benchmark S&P/ASX200 index closed up 44.3 points, or 0.71 per cent, to 6,284.2 points on Wednesday, while the broader All Ordinaries was up 43.7 points, or 0.69 per cent, to 6,370.9.


    The energy sector led gains, collectively up 1.56 per cent, with Santos up 2.4 per cent to $7.13, Woodside Petroleum up 1.5 per cent to $36.21 and Origin Energy up 2.5 per cent to $7.44.


    The miners, health care, and tech sectors were also all up more than one per cent and every sector was in the black. BHP gained 1.9 per cent to $37.20 and Rio Tinto was up 2.2 per cent to $98.31.


    Among the big banks, ANZ was up 19 cents, or 0.73 per cent, to $26.29 while the other three didn't move much. NAB was up four cents, Westpac was down one cent and Commonwealth was down three cents.


    Shares of gold miner St Barbara were placed in a trading halt at $3.32 after it announced plans to buy Canada's Atlantic Gold Corporation for $C802 million ($A854 million).


    Coca-Coca Amatil shares were up 1.7 per cent to $8.99 after chairwoman Ilana Atlas told investors at the company's general meeting that executives planned for the business to return to mid-single-digit growth in earnings per share from 2020.


    Dulux Group said it would pay a special dividend despite a 14 per cent first-half profit slide, but with investors focused on its possible acquisition by Nippon Paint, its shares didn't budge much. They were up a penny to $9.74.


    CSL gained 1.5 per cent to $200.84.

    Trading volumes were light, with $5.71 billion in value traded, which Ms Lee said did show a lack of conviction in the rally. But that was understandable given the volatility of recent days and the looming federal election on Saturday. The market had also seemed to shrug off the news that growth in China's industrial output had slowed more than expected, Ms Lee said.


    In Australia, the Australian Bureau of Statistics reported that wage growth had remained flat, with a 0.5 per cent lift for the March quarter, undershooting expectations and adding further weight to the case for a rate cut. Jobs data is set to be released on Thursday, and economists expect the unemployment rate to tick up to 5.1 per cent for April, with about 15,000 new jobs created in the month.


    ON THE ASX:

    * The benchmark S&P/ASX200 index was down 44.3 points, or 0.71 per cent, to 6,284.2 points at 1630 AEST on Tuesday.

    * The All Ordinaries was down 43.7 points, or 0.69 per cent, to 6,370.9.

    * At 1630 AEST, the SPI200 futures index was up 61 points, or 0.98 per cent, at 6,287

    CURRENCY SNAPSHOT AT 1630 AEST:


    One Australian dollar buys:

    * 69.30 US cents, from 69.76 US cents on Friday

    * 76.01 Japanese yen, from 76.53 yen

    * 61.83 euro cents, from 62.10 euro cents

    * 53.68 British pence, from 53.60 pence

    * 105.54 NZ cents, from 106.00 cents


    Global Markets Report


    U.S. and European stock indexes gained on Wednesday after news that U.S. President Donald Trump planned to delay tariffs on auto imports, offsetting earlier pressure on equities from weak U.S. and Chinese economic data that helped depress bond yields.


    Trump is expected to delay a decision on tariffs on imported cars and parts by up to six months, three administration officials told Reuters. Fears about an escalating global trade war, particularly following a spike in U.S.-China tensions, have rattled markets over the past week.


    Meanwhile, U.S. Treasury Secretary Steven Mnuchin said he will likely travel to China soon to continue talks as Washington and Beijing seek to resolve their months-long trade war.


    Major U.S. and European stock indexes ended higher after falling earlier in the session. On Wall Street, the Dow Jones Industrial Average rose 115.97 points, or 0.45%, to 25,648.02, the S&P 500 gained 16.55 points, or 0.58%, to 2,850.96 and the Nasdaq Composite added 87.65 points, or 1.13%, to 7,822.15. The pan-European STOXX 600 index rose 0.46%. Europe’s autos and suppliers index jumped 2.0%. MSCI’s gauge of stocks across the globe gained 0.49%.


    The market was selling but rebounded,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “It’s symptomatic of a market that’s in short-term mode right now and what’s driving that right now is trade.” The positive trade developments lifted risk sentiment that had been dampened earlier in the session by weak economic data.


    China reported surprisingly weaker growth in retail sales and industrial output for April. In the U.S., retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, while other data showed a drop in industrial production last month.


    U.S. Treasury yields fell, with the two-year yield hitting its lowest in 15 months after the disappointing U.S. data raised expectations the Federal Reserve will cut interest rates this year. Benchmark 10-year notes last rose 14/32 in price to yield 2.3715%, from 2.419% late on Tuesday. Yields on German bonds also sank deeper into negative territory.


    You have a tale of two markets,” said Willie Delwiche, investment strategist at Baird in Milwaukee. “U.S. stocks, particularly U.S. large-cap stocks, have rallied in response to ... trade-related headlines. But the curious thing is that the bond market has not responded.” “It suggests to me that there is cause for some global concern in terms of the economy,” Delwiche said.


    The dollar index, which measures the greenback against a basket of six major currencies, rose 0.06%, with the euro down 0.04% to $1.1199.


    Oil futures rose as worries that rising tensions in the Middle East could hit global supplies overshadowed an unexpected build in U.S. crude inventories. U.S. crude rose 0.4% to settle at $62.02 a barrel, while Brent settled at $71.77, up 0.7%.


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