Good morning. Here’s what’s happening as Monday begins and markets gets underway in Australia and Asia.
First, the scoreboard (8:05am AEDT):
• Dow: 20624 +4 (+0.02%)
• S&P 500: 2351 +3 (+0.2%)
• SPI 200 Futures (March): 5,760 -3 (-0.05%)
• AUD/USD: 0.7662 -0.0035 (-0.5%)
And the news.
1. Stocks may tread lower at open: Futures point to a slightly weaker open for Australia ahead of another busy earnings day. The stock market will not have much cue from US equities that closed little changed. Still, the S&P 500 staged a late rally to close higher at another record high to round off its strongest weekly performance since the beginning of the year. Treasuries advanced and the dollar erased losses for the week as investors await details on Trump administration tax and spending plans. US markets are closed Monday for Presidents Day.
2. Company news: Brambles, Beach Energy, Blue Scope Steel and Worley Parsons are among companies set to report earnings.
3. Data today: Japan trade balance for January is the biggest data release for the data. Closer home, New Zealand has Business NZ PSI for January and Producers Price Index. Euro zone posts consumer confidence February and UK has Rightmove house prices for February.
4. Aussie dollar: The Australian dollar hold up against the 77 US cents mark. It is 0.5% lower at $US0.7662 as the greenback recovered ground. Dozens of currency traders at some of the world’s biggest banks, including ANZ Bank and Macquarie, have been named in a South African probe into an alleged scheme by the dealers to manipulate the value of the rand.
5. Iron Ore: Iron ore has managed to stay above the $US90 a tonne though the the enthusiasm of last week’s early surge is vanishing.
6. The tax chatter that won’t go away: Business leaders urged the Turnbull government to seize the debate over the capital gains tax to reboot the broader tax reform agenda, according to the AFR. Government MP John Alexander insisted capital gains tax changes were still under active consideration.
7. Deal talk: Kraft Heinz and Unilever are calling off their plans to merge, just two days after news of Kraft Heinz’ interest broke. Kraft withdrew its US$143 billion bid for Unilever two days after the approach became public and as the Anglo-Dutch firm called the offer low and refused to open discussions. SoftBank, the Japanese telecom company that owns Sprint, is looking to make a second run at T-Mobile US, Reuters reported. For regulatory reasons, the two companies will be able to begin negotiations in April, the report said.
8. Buy the pound says Morgan Stanley: The pound is undervalued and actually represents a solid buying opportunity right now, according to Forex analysts working for banking giant Morgan Stanley.
9. Household debt, this time in the US: US household debt rose by 1.8%, or $US226 billion, to $US12.58 trillion in the fourth quarter, according to the New York Fed. Outstanding student loans — the largest source of debt besides mortgages — increased by $US31 billion to a record $US1.31 trillion.
10: Wanted next gen deal makers: UBS is on the lookout for the next generation of dealmakers in the US. The bank has historically been strong in Asia and in its home continent of Europe, but the US is a tough market to crack. CEO Andrea Orcel said that while the firm had made quick progress in equities and fixed income in the US, it was going to take a while for investments in traditional investment banking to show up. Still, the bank plans to hire 40 of “the right bankers each year.” Separately, over two-thirds of bankers and financial services workers are “bored” in their jobs, according to new research released by salary benchmarking site Emolument.