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Category: Futures / Markets / Stockmarket / Currency

Wall St finishes flat as investors take a breather after Trump election

Tuesday, 15 Nov 2016 06:09:13 | Sue Lannin

The Nasdaq fell a sharp 1 per cent, but other US markets were broadly flat. (Keith Bedford: Reuters)

US stocks were weighed down by technology companies and a fall in the price of oil.

Markets at 8:30am (AEDT):

  • ASX SPI 200 futures -0.1pc, 5,345
  • AUD: 75.49 US cents, 70.27 euro cents, 60.41 British pence, 81.82 Japanese yen, $NZ1.0622
  • US: Dow Jones +0.11pc at 18,869, S&P500 -0.01pc at 2,164, NASDAQ -0.36pc at 5,218
  • Europe: FTSE +0.34pc at 6,753, DAX +0.24pc at 10,694, Eurostoxx +0.04pc at 324
  • Commodities: Brent oil -0.16pc at $US44.68/barrel, spot gold -0.35pc at $US1221.43/ounce, iron ore -$US2.04 at $US77.77/tonne

The Dow Jones Index finished slightly higher on a late rally.

The S&P 500 ended flat and the Nasdaq lost ground.

Bank stocks rose as bond yields increased to their highest level since January on the expectation of more government spending under President-elect Trump and a rise in interest rates.

The yield on 30-year US Treasury bonds increased by 0.13 basis points to just over 3 per cent.

The yield on 10-year US Treasury bonds rose 0.7 per cent to 2.22 per cent.

Investors unloaded a record $US1.2 trillion worth of bonds last week on expectations of higher inflation because of the spending plans of US President-elect Trump.

ANZ economists said in a note that the expectation of more US Government spending increased the likelihood of a US rate rise next month.

"Although still short of any actual legislative substance, the expectation of a meaningfully expansionary US fiscal stance has continued to propel the US dollar and bond yields higher," they wrote.

"Fed funds futures now imply a 92 per cent chance of a rate rise for December, compared to 84 per cent on Friday, as markets are pricing in higher inflation."

Bank investors are also hopeful of looser regulation under the new US administration.

Goldman Sachs rose 2.6 per cent to $US209.18.

Technology companies, such as Apple and Microsoft, dropped on concerns about their future overseas revenue under the incoming Trump administration.

Apple lost 2.5 per cent to $US105.71.

Microsoft fell 1.5 per cent to $US58.12.

Brazilian bank, Banco Safra, filed a class action on behalf of bondholders of Brazilian mining company, Samarco, in New York.

The bondholders are seeking compensation for damages caused by alleged violations of US laws after the mine disaster at the Samarco iron ore mine which halted production in November last year.

In Europe, major markets rose, with the FTSE 100, CAC 40 and DAX all making modest gains.

The futures market is pointing to a flat start on the Australian share market.

South Korean electronics giant Samsung has made a $US8 billion takeover offer for US-based Harman International Industries as it seeks to join the ranks of vehicle technology suppliers alongside Apple and Google.

Samsung will buy Harman for $US112 a share.

Harman has more than 30 million vehicles equipped with its car and audio systems, including infotainment, safety and security.

Harman shares jumped by one quarter to $US109.72.

In commodity trade, renewed concerns about oversupply saw oil prices fall as Iran increased production.

Spot gold also dropped for the third session in a row to a five-month low as the greenback rose to an 11-month high against major currencies as US bond yields rose on expectation of higher interest rates.

Copper prices rallied after infrastructure spending in China was better than expected.

The Chinese yuan fell to its lowest level against the US dollar since before 2010 amid fears of tougher US trade restrictions on Chinese imports.

AustraliaPlus


 

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