Overnight: Europe Down, US Pauses

Sharemarkets in Europe and Asia retreated last night as Wall Street closed little changed.

Greg Peel will resume writing the Overnight Report after Australia Day (next week). 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

The Australian share market is eyeing a positive day of trade after the World Health Organisation (WHO) suppressed some of the fears around the globe about the coronavirus.

The WHO said, it was “too early to consider this event is a public health emergency of international concern.” A bit of a sigh of relief for investors, after the strain of virus has killed 18 people in China and infected over 650.

In the US, stocks recovered from most of their earlier losses on the back of the WHO’s remarks, with airline stocks, anti-virus and vaccine companies seeing some healthy gains. American Airlines shares rose 5.4%, United Airlines closed 1.9% higher, while Inovio Pharmaceuticals surged 11.6%, and Gilead Sciences added 0.8%. We also saw the tech heavy Nasdaq close at a new record high.

Over in Europe, the ECB held its rates steady and launched a review of its monetary policy, as expected. The ECB President, Christine Lagarde didn’t provide any further detail when the market wanted more, which is why EU shares fell further from their record all-time highs.

In terms of local economic news

Yesterday we learnt the unemployment unexpectedly fell to 5.1% in December, which is closer to the RBA’s target of 4.5%. It was good news but caused investors to take local sharemarket profits off the table, with some traders thinking the RBA is now less likely to cut rates next month.

Today, all eyes will be on the manufacturing and services sector data for January.

To Markets

The Aussie share market futures are suggesting a 0.21%/15 point gain. Yesterday the benchmark index, ASX200 fell -0.63% or 45 points, closing at 7,088 points. That’s our second best close on record! Year to date, the market is up 6.76%.

On Wall Street, after their choppy session the Dow Jones closed virtually flat for the second day (0.09%/26 points lower), while the broader S&P500 rose 0.11% and Nasdaq added 0.20%.

European markets closed in the red. The Stoxx 600 lost -0.71%, UK’s FTSE lost -0.85%, the French CAC fell -0.65%, while the German DAX lost -0.94%.

In Asia, stocks in China fell the most, seeing their biggest one-day loss since last May last year, as the deadly virus death toll rose, while the city of Wuhan where the virus spread rapidly, remains in lockdown. China’s Shanghai Comp stumbled -2.75% lower, Hong Kong’s Heng Seng followed, losing -1.52%, while Japan’s Nikkei lost -1%, along with Korea’s Kospi.

Gold firmed US$5.00 higher to US$1,562 an ounce.

Oil continued to fall, losing –1.95% to US$55.65 a barrel, that’s an 11-week low, with China’s virus outbreak causing demand concerns.

Iron ore is -0.04% lower at US$94.80 a tonne.

Australian dollar trades at 68.43 US cents.

The Australian share market over the past thirty days…