China angst fails to rattle US market sentiment
AUSTRALIAN shares are expected to open higher this morning after US investors shrugged off concerns about a sharp decline in Chinese exports.
AUSTRALIAN shares are expected to open higher this morning after US investors shrugged off concerns about a sharp decline in Chinese exports.It comes as the US government slashes its estimates of corn and soybean production, raising fears of a new global food crisis, as the country's worst drought in more than 50 years decimates crops.Asian and European stocks lost ground on Friday, with Japan (down 0.9 per cent) and Germany (down 0.3 per cent) slipping backwards, after data showed Chinese trade growth slowed severely in July, with exports rising just 1 per cent from a year ago.The news shook global markets on Friday, raising concerns of a slowdown in global growth.But US stocks ignored the data after better-than-expected earnings for some of the country's biggest companies, with the S&P500 Index instead capping a fifth-weekly advance, up 0.2 per cent at 1405.87.It came despite a report from the US Department of Agriculture on Friday predicting corn output for 2012-13 would likely be 10.8 billion bushels the lowest production since 2006 while yields were likely to be the worst for 17 years.The local futures market was yesterday forecasting the benchmark S&P/ASX200 to open 17 points higher, or 0.4 per cent, at 4272.The full-year profit reporting season shifts up a gear this week with Goodman Fielder, Wesfarmers, Commonwealth Bank, Echo Entertainment, AMP, and QBE Insurance among the heavy hitters to open their books to investors.Fund managers said Commonwealth Bank, which reports on Thursday, will be a big one to watch."There's going to be a lot of focus on Commonwealth Bank because of its share price appreciation running into this result," ATI Asset Management's David Liu said."There are some concerns that it's going to do a Telstra, in the sense that it's been bought up for its attractive yield but unless it's going to deliver an exceptional result the stock may underperform."Among those to report their full-year earnings today are Newcrest Mining, Downer EDI and JB Hi-Fi.