Underwhelming quarterly from Goldman and Citigroup weigh on market sentiment

Stock Markets

Australian shares are poised to open lower today after US stocks retreated following the release of underwhelming quarterly earnings from Goldman Sachs (GS) and Citigroup (C) amid developments in US/China trade negotiations. Shares of Goldman Sachs and Citigroup fell 3.9% and 0.4% respectively after the two financial powerhouses both reported revenue which fell below consensus estimates. This week will see 48 companies comprising the S&P 500 reporting their first quarter earnings including the likes of Netflix, IBM, BlackRock and Morgan Stanley. Over the weekend, US Treasurer Steven Mnuchin reassured investors that the US and China were moving closer towards a trade agreement and said that the US and China held phone discussions last week. Australian investors will be anticipating the RBA's April meeting minutes which are scheduled to be released today. It is expected that the meeting minutes will reinforce the RBA's dovish policy stance.

Wall Street's major indexes closed in negative territory overnight, with the Dow Jones being dragged lower by the lackluster earnings from Goldman and Citigroup.  The Dow Jones, S&P 500 and NASDAQ 100 closed down27.53 (-0.10%), 1.83 (0.06%), and 8.152 (-0.10%) points respectively.  

The benchmark S&P/ASX200 index closed flat on Monday with the index closing up a tenth of a point. Miners, health care stocks, utilities and consumer discretionary shares were down, while consumer staples, energy stocks, and the financial sector was up. Gold miners were hit hard as precious metal prices softened in the face of strong overseas equities markets.

ASX 200 futures are currently down 18 points.

Today's data releases:  RBA board meeting minutes, Euro zone ZEW expectations April, UK ILO unemployment rate, US industrial production March, US NAHB housing market index April

Commodities and Currencies

The rally in oil prices appears to be losing momentum after Russia's finance minister Anton Siluanov said Russia and OPEC may decide to boost production to fight for market share with the US, where output remains at record highs. Brent and WTI crude prices are currently sitting at US$71.18 (-0.52%) and US$63.51 (+0.17%).

Iron ore prices are down 1.1% at US$95.42 per tonne.

The spot price of gold is currently down 0.15% at US$1288.47.

The AUD is currently marginally down 0.03% at US71.71¢.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.