Monday: 4th December 2017
Each Market In Focus
The Australian share market looks set to open lower after news that former US security adviser Michael Flynn said he was willing to testify against President Trump over Russia’s involvement in the US presidential election.
- At 0700 AEDT on Monday, the share price futures index was down 6 points, or 0.1 percent, at 5,991.
In economic news on Monday, the Australian Bureau of Statistics releases its business indicators for the September quarter, CoreLogic releases its capital city house prices survey for the week just ended and the
ANZ job advertisements series for November is expected to be released.
In equities, Metcash is expected to release half-year results.
The Australian market on Friday closed higher, led by the healthcare and energy sectors, while the under- pressure banks faded after an early rally as the looming royal commission weighs on the financial sector.
The benchmark S&P/ASX200 index rose 19.9 points, or 0.33 percent, to 5,989.8
The broader All Ordinaries index gained 18.3 points, or 0.3 percent, to 6,075.5 points.
- Wall Street stocks have fallen, whipsawed by developments with a probe into Russia’s alleged involvement in the US election as well as with progress on a tax bill in Congress.
- Major indexes ended lower on Friday after an ABC News report that former national security adviser Michael Flynn was prepared to testify that before taking office US President Donald Trump had directed him to make contact with Russians.
- The benchmark S&P 500 was down as much as 1.6 percent following the report. Flynn pleaded guilty on Friday to lying to the FBI about contacts with Russia’s ambassador.
- But stocks recouped the bulk of their initial losses after US Senate Republicans said they had enough support to pass a sweeping tax overhaul.
- The Senate news was the latest sign of progress for a tax bill being closely watched by investors, with hopes that significant corporate tax cuts will further fuel Wall Street’s record-setting rally.
- Dow Jones Industrial Average fell 0.17 percent, to 24,231.59.
- S&P 500 lost 0.20 percent, to 2,642.22.
- Nasdaq Composite dropped 0.38 percent, to 6,847.59.
Gold prices rose Friday following an ABC report that former national security adviser Michael Flynn is prepared to testify against President Donald Trump in the continuing Russia investigation.
Gold for February delivery closed up 0.4% at $1,282.30 a troy ounce on the Comex division of the New York Mercantile Exchange, slightly paring gains after rising as high as $1,292.50 earlier in the session. The gains came after ABC reported that Mr. Flynn is prepared to testify that Mr. Trump, as a candidate, “directed him to make contact with the Russians.”
Among base metals, copper ended a four-session losing streak after data was released showing stable growth in China’s manufacturing sector in November.
Oil prices rose after the Organization of the Petroleum Exporting Countries and other big producers agreed to continue limiting their output for an additional nine months, raising hopes that oil prices will continue to climb out from a three-year slump.
U.S. crude futures rose 96 cents or 1.67%, to $58.36 a barrel on the New York Mercantile Exchange-their second highest settlement of the year.
Brent, the global benchmark, rose $1.10, or 1.76%, to $63.73 a barrel on ICE Futures Europe.
- The dollar fell Friday, as investors weighed heightened political uncertainty in the U.S. against signs that lawmakers may be coming closer to passing a sweeping tax reform legislation.
- The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.2% at 86.47. It fell as low as 86.24 during the session.
- Investors sold the dollar after ABC reported that former National Security Adviser Michael Flynn is prepared to testify that President Donald Trump “directed him to make contact with the Russians” during the campaign.
- Mr. Flynn pled guilty Friday morning to lying to the FBI about his communications with the Russian ambassador to the U.S. in December 2016.
- The currency later pared some of its losses after Senate Majority Leader Mitch McConnell said Republicans had the votes to pass a sweeping tax reform bill. The White House has said its tax cuts will generate growth and spark inflation.
- The dollar was recently down 0.3% against the yen, a popular destination for nervous investors. Gold was up 0.4%.
The Australian dollar is back above 76 US cents after news that former Trump security adviser Michael Flynn had pleaded guilty and was prepared to testify against the US president regarding Russian involvement in the presidential election dented market sentiment.
At 0635 AEDT on Monday, the Australian dollar was worth 76.04 US cents, up from 75.64 US cents on Friday.
- The FTSE fell on Friday at the end of a choppy session that saw Britain’s top-share index accelerate losses and join a global risk-off move following reports in the United States that raised new worries over the stability of Donald Trump’s administration.
- The FTSE fell 0.36 percent, at 7,300.49, having earlier gained as much as 0.4 percent thanks to a pullback in the pound that helped it recover from the losses seen in morning trade.
- ABC News reported that former US national security adviser Michael Flynn was prepared to testify that Trump directed him to make contact with Russians when he was a presidential candidate.
- Reuters could not immediately verify the ABC report, which sent Wall Street and other bourses sharply lower.
- European stocks, which were recovering from early losses and set to finish the first trading day of December in positive territory, fell suddenly after ex-US national security adviser Michael Flynn pleaded guilty to lying to the FBI.
- The news triggered a rise in the euro and in the pound, which hurt stocks as investors questioned the ability of the US president to implement his tax cuts or simply to survive the political storm.
MSCI’s Asia ex-Japan stock index was barely changed on Friday while Japan’s Nikkei index closed up 0.41 percent at 22,819.03.
Hong Kong stocks fell, with the benchmark Hang Seng Index posting its biggest weekly loss in 11 months as investors booked profits from this year’s robust rally.
The Hang Seng index fell 0.35 percent to 29,074.24.
Losses in mainland China stocks also pressured Hong Kong this week as regulators in Beijing continue to clamp down on riskier types of activity to reduce systemic risks in the financial system.
China’s main Shanghai Composite index closed up 0.01 percent at 3,317.62 points while its blue-chip CSI300 index ended down 0.20 percent at 3,998.14.
The S&P/NZX50 Index rose 0.025 percent, or 2.01 points, to 8188.83.
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