Global meets local
Deteriorating industrial sentiment and a flight to safety overnight are set to meet a local bullish impulse head on in local trading today. Further complicating factors include releases from more than twenty top companies at the halfway mark of reporting season and the return of extreme volatility to share trading in mainland China.
Oil markets dropped to a fresh six year low, dragging copper with it despite gains for most industrial metals. This is particularly relevant given yesterday’s market leading gains from the energy sector following Woodside’s less bad earnings results. Bonds and gold rallied as investors fled shares. Newcrest mining may be a delayed beneficiary of this rally, and the conflicting flows in various mining stocks could make for a volatile day in the Materials sector.
Today’s avalanche of earnings reports is also turning negative. So far, Qantas, AMP, Breville and the ASX itself have reported below consensus forecasts, with Adelaide Brighton the lone outperformer. Although Origin, Wesfarmers and iiNet are yet to report, it’s looking like a day of more misses than hits. All eyes turn to Shanghai for the regional lead after yesterday’s 6% range and sentiment reversal to positive.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.
Frequently Asked Questions about this Article…
The local stock market is being influenced by deteriorating industrial sentiment, a flight to safety, and a local bullish impulse. Additionally, the release of earnings reports from over twenty top companies and extreme volatility in mainland China's share trading are also playing a role.
Oil markets have dropped to a fresh six-year low, which has dragged copper prices down despite gains in most industrial metals. This decline is impacting the energy sector, which had previously seen gains following Woodside's earnings results.
Bonds and gold are rallying as investors are fleeing shares in search of safer investments. This flight to safety is a response to the current market volatility and uncertainty.
Qantas, AMP, Breville, and the ASX have reported earnings below consensus forecasts. Adelaide Brighton is the only company that has outperformed expectations so far.
The Materials sector may experience volatility due to conflicting flows in various mining stocks. Newcrest Mining could benefit from the rally in gold, but overall, the sector is expected to be volatile.
The Shanghai market is significant for local investors as it provides a regional lead. After a 6% range and a sentiment reversal to positive, all eyes are on Shanghai to see how it will influence local trading.
The earnings reports from Origin, Wesfarmers, and iiNet are yet to be released. However, given the trend of more misses than hits in the current reporting season, these reports could further influence market sentiment and trading.
For further commentary on the market situation, you can contact Michael McCarthy at CMC Markets by calling 02 8221 2135.
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