Cautious trading is likely to continue today as dark clouds form on the market horizon. Looming deadlines on China / US
trade, Brexit and US / Mexico border wall negotiations all represent market threats. Overnight trading could be politely
described as mixed, but more robust commentators might reach for inconsistent and erratic.
European shares rose, but US markets were flat after trading in the red for most of the session. Oil and industrial
metals dropped, but so did bonds and gold. A common theme is the strengthening US dollar, extending to an eight session
run higher, curious in light of the Fed’s clearly signalled dovishness. Asia Pacific investors are looking at a mixed
start, with futures markets indicating opening falls in Tokyo and Hong Kong, but gains in Shanghai and Sydney.
US reporting season is two thirds complete. Earnings growth around 14.5% so far is about 3% over forecasts, and giving
some support to the higher index levels gained this year. The Australian season hits the quarter way mark today, with
Challenger Financial and toll road manager Transurban fronting investors. Both have missed estimates by a very wide
margin, Challenger reporting a 97% fall in profit and Transurban a 54% slump.
Oil traders are on high alert as both OPEC and the EIA are due to deliver outlook statements. The 0.5% fall in overnight
trading is uncharacteristically small, and energy markets may see a big lift in volatility.