Originally published by Rivkin Securities
Fortunately there has been no further escalation of North Korea tensions and markets have regained a cautious optimism. The Dow Jones Industrial Average and S&P 500 both opened lower but climbed throughout the session to close marginally higher. The S&P/ASX 200 has had two very weak closes over the last two days and it would be reasonable to expect a bounce today considering the recovery in US stocks throughout last night’s session. The Commonwealth Bank Of Australia (AX:CBA) has been a drag on the market following a series of negative events affecting the bank. The share price is down over 10% from its peak a month ago, which has wiped well over $10bn from its market capitalisation. ASX 200 futures are up 0.5% this morning.
Hurricane Harvey continues to rain on Houston and surrounding areas. Oil tankers are queuing up off the coast as port closures prevent them from delivering their cargo and many refineries are still offline. API oil inventory data was released overnight which showed a large draw in crude inventories (again) while gasoline inventories actually increased. This data covers a period prior to Hurricane Harvey so the real effect of the storm will only appear in next week’s data. Crude prices are remaining stubbornly low despite supply impacts from the hurricane as well as reduced output from Libya because armed factions have taken control of parts of the oil production infrastructure. WTI oil is currently trading at $46.23 per barrel while gasoline reached a multi-year high of $1.8280 per gallon.
It has been a relatively quiet week for economic news but tonight the US releases its second estimate of 2nd quarter GDP which is expected to revised up slightly. Today Australia releases building approvals data which is expected to fall 5.4% relative to the prior month.
Data Releases:
- AU Building Approvals 11:30am AEST