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Morning (AM) Market Report

US stocks have fallen, with the Dow slumping for an eighth straight decline as industrials wobbled again on trade war concerns while Amazon and other online retailers weakened after a US Supreme Court ruling on state sales tax collection.

Friday, 22nd June, 2018

Big US manufacturers and car-makers were under pressure after Germany's Daimler cut its 2018 profit forecast and BMW said it was looking at "strategic options" because of a trade war between the US and China. Caterpillar lost 2.52 percent and Boeing fell 1.5 percent on Thursday, with the S&P industrials off 1.19 percent and on track for their seventh fall in eight sessions.

Amazon dropped as much as 1.9 percent after the court ruling, which allows states to force online retailers to collect sales taxes, before paring losses to trade down 1.1 percent. Wayfair lost 1.6 percent, Overstock.com tumbled 7.2 percent, Etsy declined 1.4 percent and Ebay dropped 3.2 per cent. Intel also weighed heavily on the S&P 500, down 2.4 percent after chief executive officer Brian Krzanich resigned following a probe that revealed a past consensual relationship with an employee violated company policy.

The Dow Jones Industrial Average fell 196.1 points, or 0.8 percent, to 24,461.7, the S&P 500 lost 17.56 points, or 0.63 percent, to 2,749.76 and the Nasdaq Composite dropped 68.56 points, or 0.88 percent, to 7,712.95.

Ford fell 1.35 percent, General Motors dropped 1.98 percent and Tesla lost 4.06 percent. The S&P 500 cars and components index slumped 1.79 percent. Energy was the worst-performing sector, down 1.93 percent as oil prices fell ahead of a meeting of the Organisation of the Petroleum Exporting Countries, where producers are expected to boost output.

Britain's top share index has fallen as sterling bounced from seven-month lows following a Bank of England policy vote that bolstered expectations of a rate hike in August. As widely expected, the BoE kept rates unchanged but its chief economist unexpectedly joined the minority of policymakers calling for a hike. Its Monetary Policy Committee (MPC) voted 6-3 to keep rates at 0.5 percent. Economists in a Reuters poll had said they expected a continued 7-2 split. The surprise pushed sterling higher after an earlier drop. That in turn sent the FTSE 100 down and the export-oriented index closed 0.9 percent lower.

The FTSE 100 Index fell 70.96 points, or 0.93 percent, to 7,556.44 points. Barratt Development and Persimmon both fell 3.7 percent, while Taylor Wimpey lost 3.1 percent. Financials and energy stocks weighed on the FTSE as expectations of an OPEC deal to raise output sent oil prices tumbling. Royal Dutch Shell fell 1.1 per cent and BP 0.9 percent.

Hong Kong stocks have ended at a six-month low, as China-US trade conflict fears curbed risk appetite. The Hang Seng index ended 1.35 per cent lower at 29,296.05, while the China Enterprises Index closed lower by 1.2 percent at 11,364.66 points. The sub-index of the Hang Seng tracking energy shares dipped 1.5 percent, while the IT sector slipped 0.86 percent, the financial sector closed 1.36 percent lower and property sector lost 1.2 percent. The top gainer on Hang Seng was Country Garden Services Holdings Company Ltd, which ended 15.3 percent higher, while the biggest loser was Sunny Optical Technology Group Co Ltd, which closed 8.91 percent down. Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.67 percent, while Japan's Nikkei index closed up 0.61 percent.

Ahead of the local open SPI futures were 30 points lower at 6,136.

Foreign Equities Close Change % Change 
Dow Jones (US)  24462

-196

-0.80
FTSE 100 Index 7556 -71 -0.93
HKSE 29296 -400 -1.35
NASDAQ 7713 -69 -0.88
Nikkei 225 (Japan) 22693 138 0.61
NZ50 8999 93 1.04
S&P 500  2750 -18 -0.63
Commodities US$ Close Change % Change 
Aluminium  /t 3mth 2181 14 0.65
Copper  /t 3mth 6789 25 0.37
Gold  /oz 3mth 1267 2 0.18
Lead  /t 3mth 2363 -23 -0.96
Nickel  /t 3mth 14905 12

0.08

Oil - West Texas Crude  /t 3mth 65.5 -0.2 -0.26
Zinc  /t 3mth 2971 -66 -2.19
Currency Close Pts Change % Change 
$A vs $US 0.7372 0.0003 0.05
$A vs GBP 0.5569 -0.0024 -0.43
$A vs EUR 0.6354 -0.0010 -0.16
$A vs YEN 81.07 -0.26 -0.32
$A vs NZD 1.0741 0.0010 0.09