Local shares are poised to open little changed, mirroring Wall Street, where investors reshuffled their holdings after some result disappointments in the US, good but not great economic data and expectations of a rate rise in the world's largest economy.
What you need2know
SPI futures up 10pts at 5624
AUD at 72.90 US cents
On Wall St, S&P 500 flat, Dow flat, Nasdaq +0.3%
In Europe, Stoxx 50 +0.2%, FTSE 0.6%, CAC +0.6%, DAX +0.4%
Spot gold down $US8.00 or 0.7% to $US1088.85 an ounce
Brent crude down 11 US cents or 0.2% to $US53.27 a barrel
What's on today
Australia producer price indexes, private sector credit; Canada GDP; Japan CPI
Stocks in focus
Air New Zealand's shares have underperformed relative to Qantas Airways amid fears it faces increasing competition on some of its most profitable routes.
Bell Potter says in general it expects good earnings growth from most of technology, media and telecommunications stocks it covers when they report results next month.
"But we expect the strongest results to come from the following," he writes:
"Altium (ALU): We forecast FY15 EBITDA and NPAT growth of 26 per cent and 38 per cent, respectively, which note is in US$ and after currency headwind.
Integrated Research (IRI): We forecast FY15 EBITDA and NPAT growth of 43 per cent and 65 per cent, respectively, which note is in $A and after currency tailwind.
My Net Fone (MNF): We forecast FY15 EBITDA and NPAT growth of 33 per cent and 24 per cent, respectively, which is in $A and there is no currency headwind/tailwind."
Currencies
John Kicklighter, chief currency strategist at FXCM, says that currencies outperforming are doing so not because of current central bank cash rates, but rather on bets whose rates are expected to rise, and rise first. "Investors are more interested in taking advantage of tide changes in capital flows – also termed 'capital gains' – than they are of passively collective non-existent interest." he said, seeing a buzz around next week's Reserve Bank of Australia rate decision.
The greenback surged to a four-month high as a report showed the US economy grew in the first half of the year, a day after the Federal Reserve took a step closer to raising interest rates. "Do I think the dollar has more strength in it? Absolutely," said Tina Byles Williams, the Philadelphia-based chief executive officer of FIS Group, which has around $US5 billion under management.
The real dropped to a 12-year low as signs Brazil will stop raising interest rates limited the allure of the nation's assets to global investors. Swap rates fell the most since November after the central bank said Wednesday in revised language that borrowing costs are high enough to slow inflation toward the official target following a seventh straight increase.
Commodities
Ore with 62 per cent content delivered to Qingdao dipped 0.4 per cent to $US55.64 on Thursday, after rallying 4.6 per cent on Wednesday, according to Metal Bulletin.
OPEC expects increasing oil demand to prevent a further fall in prices and sees a more balanced market in 2016, its secretary-general said, the latest sign the group is sticking to its policy of defending market share. "I would not expect they (prices) are going to fall because demand is growing," OPEC Secretary-General Abdullah al-Badri told reporters in Moscow.
Victor Thianpiriya, commodity strategist at ANZ says ANZ has made downward revisions to gold forecasts for the next 18 months. "Near term, we expect gold to test $US1020 an ounce by December. A strengthening USD, a recent headwind for prices, will continue to pressure gold. Also physical demand does not look strong enough to support bullion prices in a meaningful way."
United States
Wall Street ended flat on Thursday as investors digested ho-hum corporate earnings and a report that showed that the economy picked up steam in the second quarter.
The S&P 500 is up 2.2 per cent in July, heading for its biggest monthly advance since February, after rallying 2 per cent in the previous two sessions. The index declined in four of the last five weeks, and had lost 2.9 percent in the five sessions ending Monday as a Chinese equities rout spurred concern about the nation's economic growth and some corporate earnings disappointed
Gross domestic product expanded at a 2.3 per cent annual rate in the June quarter, the Commerce Department said on Thursday. First-quarter GDP, previously reported to have shrunk at a 0.2 per cent pace, was revised up to show it rising at a 0.6 per cent rate. Consumer spending, which accounts for more than two-thirds of US economic activity, grew at a 2.9 per cent rate from a 1.8 per cent pace in the first quarter.
Europe
European equities enjoyed their third straight day of gains on Thursday with results from heavyweights Siemens and Nokia underpinning the signs of recovery.
JPMorgan strategists said the earnings season, which is about a third of the way through, pointed to a high number of companies beating expectations. "The proportion of European companies beating estimates is the highest since we started compiling the data in '09," they wrote in a note to clients.
The International Monetary Fund can only approve new loans for Greece after Athens reaches an agreement with European governments that would ensure it can pay its debts, an IMF official said on Thursday. "The IMF can only support a program that is comprehensive," the official said in a telephone briefing with journalists.
What happened yesterday
Firmer commodity prices, gains on Wall Street and in Europe and a settling of the Chinese sharemarket combined to push Australian shares higher on Thursday, with energy stocks leading the way. The benchmark ASX 200 Index lifted 0.8 per cent to 5669.5 and the broader All Ordinaries Index 0.8 per cent to 5653.1.
