Overnight: To 7000, And Beyond (?)

The local market looks poised to surpass the 7000 (ASX200) on a positive lead from Wall Street after China and the US signed off on Phase One.

Greg Peel is still on holidays. In the meantime, Jessica Amir from Bell Direct is providing a snapshot of insights and developments from overseas markets overnight.

By Jessica Amir, Bell Direct

It’s done. Finally. China and the US have inked the highly anticipated ‘phase one’ of the trade deal and US equities ended with a bumpy day of trade, albeit ended pointing in the right direction.

Traders and investors had been awaiting the signing of the so-called phase one trade agreement for nearly two years, as the conflict between the world’s largest economies has dragged. The US-China trade deal includes provisions to curb intellectual property theft along with forced technology transfers. It also increases Chinese purchases of US products by $200 billion.

The Australian share market is eyeing another record breaking day with the futures currently suggesting a 0.26%/18 point lift, which means, we will rise over the 7,000 point milestone. Yesterday the S&P ASX200 hit a fresh record high for the second day in a row, rising 0.47%/33points to 6994.8.

US equities touched record highs before giving up most of those gains. The Dow Jones added 0.3%/91 points, while the broader S&P 500 rose 0.2%/6 points with the Nasdaq ending virtually flat, rising 0.08%/7 points.

Gold rose by US$10.80/0.6% to US$1,555 an ounce.

Oil fell 0.45% to US$57.97 a barrel, giving up the prior session’s gains as crude output continues to rise, hitting a record.

Iron ore gained 0.85% to US$94.83 a tonne.

Australian dollar tracked steady overnight ahead of the deal being signed and at 69.03 US, holding a week high.

What else to watch today

Another quiet day with no economic news, so all eyes will be on company announcements.

Australia’s premier oil player, Woodside Petroleum (the 14^th largest listed company in Australia) reports fourth quarter 2019 results. Yesterday its shares rose 0.4% to $35.80.

Also keep an eye on the largest stock on the exchange, CBA. Bell Potter issued guidance for what to expect from their upcoming 1H20 result on Wednesday 12 February. We are expecting statutory NPAT of ~$5.79bn (~$4.29bn excluding CFSGAM gain on sale of ~$1.50bn), cash NPAT (continuing operations) ~$4.35bn and 200¢ interim ordinary dividend. Yesterday CBA’s shares rose 0.6% to $83.66. (It’s getting closer to BP’s price target of $86.00).