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Category: Business, Economics and Finance / Unemployment / Banking / Economic Trends

Morning markets: US tech stocks jump on Facebook, carmakers crash

Friday, 29 Jul 2016 05:23:18 | Rebecca Hyam

City office-workers and passers-by watch the share market prices at the Australian Stock Exchange in Sydney on August 5, 2011. The Australian dollar is down almost two US cents as global markets continue to be pessimistic about the US economy and European government debt woes. (AAP: Tracey Nearmy)

Yesterday's strong earnings report from Facebook helped to boost the Nasdaq overnight but, more broadly on Wall Street, it was a mixed finish.

Markets at 8:10am (AEST):

  • ASX SPI 200 futures +0.1pc at 5,525
  • AUD: 75.08 US cents, 67.75 euro cents, 57.03 British pence, $NZ1.0605
  • US: Dow Jones -0.1pc at 18,456, S&P500 +0.2pc at 2,170, NASDAQ +0.3pc 5,155
  • Europe: FTSE -0.4pc at 6,721, DAX -0.4pc at 10,275, Eurostoxx50 -1.1pc at 2,966
  • Commodities: Brent oil -2pc at $US42.60/barrel, gold -0.4pc at $US1,336/ounce, iron ore +2.1pc at $US58.00/tonne

Facebook's earnings for the June quarter surged to more than $US2 billion, driven by strong online advertising sales.

That was up 186 per cent on the social media giant's earnings during the same period last year.

Shares in the car maker Ford slumped in the overnight trading session, after it reported a drop of almost 9 per cent in second quarter earnings, and weaker sales in China.

That rattled the wider automotive sector, with shares in General Motors and Fiat Chrysler also losing value.

Unemployment claims rising but still market still "healthy"

The number of people claiming unemployment benefits rose by a greater than expected 14,000 last week to a seasonally-adjusted 266,000.

Claims have now been below 300,000 for 73 consecutive weeks, marking the longest stretch since 1973.

The 300,000 threshold is considered to represent a healthy employment market.

"The noise in the data do not alter the fact that claims remain very low by any historic measure, indicative of a robust labour market," observed ANZ in a note on last night's market action.

All eyes on the Bank of Japan

European markets gave back some of yesterday's gains, with falls greater than 2 per cent in Italy and Spain, but modest declines for most other major markets.

It is set to be a slow start locally, with the ASX SPI 200 futures just a little higher.

Most traders are holding off major investment moves until the Bank of Japan (BoJ) releases the decision from its latest monetary policy meeting around lunchtime.

"Markets are looking for the next catalyst/theme and the BoJ is next to step up to the plate. Amidst what looks to be some clear political pressure, what can it do next is the question," wrote ANZ's analysts.

A higher USD/JPY overnight shows that markets are looking for something big and bold.

At the same time, the Australian dollar was back just above 75 US cents, having strengthened overnight.

Oil and gold eased slightly, but iron ore prices continued a recent rebound, and are now back close to May's budget forecast level.

Today's agenda:

Australia:
  • Private sector credit – Q2 (11:30am)
  • Origin Energy production update – Q2 (9:00am AEST)
  • Infigin Energy production update – Q2 (9:00am AEST)
  • Paladin Energy production and sales update – Q2 (9:00am AEST)

US:
  • GDP growth – Q2 (10:30pm AEST)

Japan:
  • BoJ interest rate decision (12:45pm AEST)

Europe:
  • GDP (first estimate) – Q2 (7:00pm AEST)
  • Inflation – Q2 (7:00pm AEST)
  • Unemployment – June (7:00pm AEST)

AustraliaPlus


 

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