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Commodities diverge, ANZ disappoints

Financial stocks are in focus this morning as local entities report against a backdrop of better financial sector health in the US. Resource stocks are likely to churn as commodity prices diverge, and the session may see an abrupt turn at midday as China releases services PMI data.

92 of 95 US financial sector stocks have reported for this quarter. Aggregated sales growth of 3.5% and an earnings increase of 7.6% place the sector near the top of the performance tree. In contrast, ANZ this morning announced a 24% drop in profit despite steady bad debt provisions. The hit comes from write downs associated with discontinued businesses. These losses were previously flagged, potentially ameliorating the pressure on ANZ’s share price. Investors leaving ANZ’s register may look to funds manager BT after its impressive 12% profit lift on inflows of $4.4 billion.

Gold stocks may continue yesterday’s rally after the spot price crested US $1300 in overnight trading. Iron ore is also higher. However oil prices slumped further as US inventory data recorded one of the largest weekly builds ever, and base metals tumbled as traders re-considered a potential Trump presidency. Energy and materials could lead any local sell down.

Manufacturing PMIs stunned markets with their strength on Tuesday. A repeat performance at the release of the services and composite PMIs could provide a turning point for sentiment and share market indices.

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