ASX poised to open lower on lingering fears of global economic slowdown

Stock Markets

Australian shares are set to open lower today ahead of the release of manufacturing data from Australia, China, Japan, Europe, Britain and the US over the next 24 hours. This data will provide a check on the strength of the global economy at the start of this year. Investors are likely to position themselves for results which are indicative of global economic slowdown following the release of very weak Chinese trade data at the end of 2018 which raised concerns about a slowdown in world growth.

The Dow Jones, S&P 500 and the NASDAQ 100 closed in negative territory as US equities struggled to gain momentum amid weak earnings reports and an abrupt end to a US/North Korean summit, with the indices losing 69.19 (-0.27%), 7.89 (-0.28%) and 19.48 (-0.27%) points respectively.

The benchmark S&P/ASX200 index closed higher on Thursday, finishing up 18.7 (+0.3%) points as the index was bolstered by gains in the health care sector which moved up 2.61%. Financials we up 0.79%, with all major banks closing in positive territory. Conversely, the materials sector struggled to maintain gains following the drop-in iron ore prices which saw large percentage losses by FMG (-5.19%), S32 (-1.01%), and BHP (-1.19%).

ASX 200 futures are currently up 6.0 points. 

Today's data releases:  AiG performance of manufacturing February; Core Logic dwelling prices February; NZ building permits January; Terms of trade fourth quarter; Japan jobless rate January; Nikkei manufacturing PMI February; Euro zone Markit manufacturing PMI February; Unemployment rate January; CPI estimate January; UK Markit manufacturing PMI February; US personal income & spending January; Markit manufacturing PMI February; ISM manufacturing February

Commodities and Currencies

Oil prices rose for a third straight day on Thursday, extending large gains triggered by plunging oil stockpiles in the US and indications that OPEC will not steer away from their objective to drain oversupply. Brent and WTI crude and are currently sitting at US$66.45 (+0.12%) and US$57.25 (+0.42%) respectively.

Iron ore prices are down 2.18% to US$82.56 per tonne.

The spot price of gold is down 0.06% and is currently hovering around US$1312.57.

The AUD is currently up 0.07% at US70.99¢.  

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.