The Overnight Report: US Equities Pull Back

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Greg Peel is on holidays. In the final week before the Christmas break, FNArena offers an alternative Overnight Report, produced by Vested Equities.

Global Markets Update

– US markets. US markets edged lower overnight on light trading volumes – both Dow Jones and S&P500 were lower by -0.2%. Real estate shares dropped -1.3% for the biggest loss, while financial stocks weighed on the index with a -0.2% decline. In US economic data, sales of existing homes increased more than forecast, indicating that the economy is picking up steam.

– Long-dated US treasury yields fell overnight, with the 2-Yr yield down 2bps to 1.19% and 10-Yr yield down 1bps to 2.51%.

– European markets. European shares eased after reaching the highest level in almost a year, as banks and financial services companies dragged indexes lower. Spanish banks fell after a ruling in the European Union’s top court that may result in them handing back billions of euros to mortgage clients. The Stoxx Europe 600 Index dropped -0.3%, while the German Dax and the UK FTSE were mostly flat. In London, BHP Billiton ((BHP)) shares were down -0.1%, while Rio Tinto ((RIO)) was up +0.6%.

– Asian markets. Asian shares pared earlier gains on Wednesday, dragged down by declines in Japanese stocks as the yen strengthened against the US dollar. Nikkei was down -0.3%, Shanghai Composite rebounded +1.1% and KOSPI was down -0.2%.

– WTI oil price is currently down -1.4% at US$52.55/bbl. Iron ore is -0.5% lower at US$79.19 per tonne. Spot gold down -0.1% to US$1,131 per ounce. Thermal coal is down -0.1% to US$86.90/tonne.

ASX Market Update

– ASX performance. The ASX 200 closed +0.4% higher on Wednesday, the highest level since October 2015, with most sectors registering a positive gain besides industrials (-0.6%) and consumer staples (-0.1%).

– The a2 Milk Co ((A2M)) shares gained +6.2% after the company provided an update stating “the business continues to trade very strongly, in particular, year on year growth in its infant formula business”. Sydney Airports ((SYD)) shares dropped -5.2%, amid uncertainty on the second airport. Bellamy’s ((BAL)) extended its trading halt for another 3 weeks.

– Australian dollar is currently lower by -0.2% to 0.7248 versus the USD.

– Today’s trading. In Australia, no major economic news is out.

www.vested.com.au

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