Morning report

Morning News Summary

Markets Green After Drop in Oil

OPEC as expected extended to its production cuts to March next year, but that wasn’t enough for some oil traders. The resulting sweeping losses in energy stocks were unable to tarnish an otherwise solid performance in the US, but caused a dip in Europe and a flat end in the UK. Asia snapped a two day losing streak as Korea and China topped global markets.

The US reached record territory to continue a six day positive run

At the time of writing, the S&P 500 (+0.5%) and Nasdaq Composite (+0.8%) traded in record territory as US stocks advanced for a sixth straight session, thanks in part to big gains in shares of Best Buy after quarterly results. The Dow Jones Industrial Average rose by +0.3%. Best Buy shares rocketed up +21.9% after reporting a surprising increase in same-store sales, beating profit expectations and providing an upbeat outlook. Shares in Medtronic rose by +1.3% after earnings topped forecasts. Blue chip tech stocks etched out solid gains with Amazon, Google and Facebook adding +1.6%, +1.5% and +1.3% respectively. HP dropped -4.1% despite quarterly results being better than expected, as management explained that cost increases have hurt margins and forced it to hike prices. US energy stocks weren’t exempt from the global trend, with ConocoPhillips, Halliburton and Schlumberger losing -3.4%, -2.9% and -2.2%.

Europe notched a slim loss while the UK was flat thanks to energy stocks

European stocks notched a slight loss, hampered by lower volume and a slide in oil prices following news OPEC won’t deepen its production cuts or commit to extending them beyond March next year. The Stoxx Europe 600 dipped -0.1%. Energy companies suffered after the significant drop in the price of crude oil, including Saipem (-3.1%), Eni (-1.9%), and Total (-0.9%). After switching between small gains and losses, the UK’s FTSE 100 remained flat as the impact from a weaker pound outweighed a drop for energy companies. After suspending its chief operating officer and with oil prices dropping, Petrofac plummeted by -30.0%. Major integrated energy companies such BP (-1.1%) and Shell (-0.3%) suffered more modest losses. Intermediate Capital Group shares soared +14.0% after the firm reported a rise in profits.

Asia all green after positive economic results in Korea and China

Asian stocks snapped a two-day slide as South Korea’s equities reached another record and China’s benchmark rose the most in seven weeks. The Shanghai Composite and Korean Kospi jumped by +1.4% and +1.1% respectively, while the Hong Kong Hang Seng and Japan’s Topix gained +0.8% and +0.2% respectively.

ASX 200 in the green

The ASX 200 added +0.4% after a lift in energy stocks following an early advance in crude oil. Stand out performer of the day was Aristocrat, up +4.0%.

Crude, gold and iron ore all fall

WTI crude fell -3.7% to US$49.24 and gold inched -0.3% lower to US$1,255.48/oz. Iron ore was also down, losing -US$0.28 to US$60.20/MT.

Today’s events

  • BLT FY17 result
  • TLT Ex final div 2.25 cps
  • TPW Ex final div 17.0 cps

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