The Aussie market is poised to open higher later this morning, following a muted session on Wall Street on Friday night after Moody’s slashed its 2016 growth forecast for the Group of 20 economies due to the hit from a slowing Chinese economy.
The September SPI futures contract is up 14 points, at 5248.
In local economic news today, the Reserve Bank of Australia is due to release financial aggregates data for July.
The Australian Bureau of Statistics’ business indicators for the June quarter is also due out, as is the TD Securities-Melbourne Institute inflation gauge for August and Housing Industry Association new home sales for July.
In equities news, Atlas Iron and Australian Ethical Investment are expected to post full year results.
– SPI futures up 14pts to 5248
– AUD at 71.71 US cents, 87.27 Japanese yen, 64.12 Euro cents and 46.52
– On Wall St, S&P 500 flat, Dow flat, Nasdaq +0.3%
– In Europe, Stoxx 50 +0.2%, FTSE +0.9%, CAC +0.4%, DAX +0.2%
– Spot gold up $US8.60 or 0.8% to $US1133.60 an ounce
– Brent crude up $US2.49 or 5.2% to $US50.05 a barrel
What’s on today:
Australia business indicators for June quarter, private sector credit, inflation gauge
Stocks in focus:
Deutsche Bank says the message from results season seems to be that earnings momentum is not weak (the June half beat/miss ratio of 50 per cent is around average). “But the prevalence of downgrades to forecasts (for two-thirds of companies) suggests that momentum isn’t particularly strong either. The share price reaction for much of August looked overdone, but relative performance has perked up.”
Bell Potter upgraded Vocus Communications to “hold” from “sell” and moved the price target to $5.50 a share from $5.75 previously.
Deutsche Bank has a “buy” recommendation on Flight Centre and a target price of $46 a share. “While it was disappointing to see profit decline, the result was within the guidance range that preceded the recent downgrade and the situation is not nearly as dire as what management’s commentary and the sharp share price decline implied only two months ago. The outlook seems to have improved and the guidance range suggests the group is now sufficiently diverse to deliver reasonable earnings growth despite subdued Australia leisure demand.”