Posts Tagged ‘Nikkei’

Stock Market Analysis: Financials Rise As European Debt Concerns Ease

Thursday, September 9th, 2010

Stock Market Analysis

Financials Rise As European Debt Concerns Ease

Overseas markets continued their “melt-up” overnight, led by financials and miners.  In Europe the debt concerns eased after a successful auction of Portuguese government debt. The ASX is set to trade higher today as the ABS releases their Employment report.

The SPI Futures is just below the key resistance level of 4600. The ASX is set to open higher as the SPI Futures closed up 0.7% (or 30 pts) at 4,568.  The key levels for our index today are 4600 and 4500. M&A activity continues to drive specific stocks. Gold prices are pushing towards new record highs.

US Markets

US stocks resumed their rally overnight, as European debt concerns eased after a successful auction of Portuguese government debt. The gains were tempered by comments from the US Federal Reserve “Beige Book” which indicated more regions of the nations experienced slower growth late in the summer, as 5 of the 12 regions tracked by the US central bank showed mixed or slowing activity compared with just two during the most recent report in July. The gains were broad-based as Financials, Miners, Energy and Industrials sectors all rose around 1 percent. The Dow closed up 0.5% (or 46 points) at 10,387, while in the broader market the S&P 500 index up 0.6% (or 7 points) at 1,099 and the tech-heavy Nasdaq ended up 0.9% (or 20 points) at 2,229.

European Markets

European stock markets closed higher (after early weakness).  The banking and commodities sectors rebounded.  In London and Europe stocks rebounded from early losses on the back of reports: on the German economy, news of a successful sovereign bond issue in debt laiden Portugal and positive comments from the head of the German central bank.  These reports triggered support of the Fiancials and subsequently the overall markets. In London the FTSE 100 index closed up 0.4% (or 22 points) at 5,430, the German DAX up 0.8% (or 47 points) at 6,164, while in France the CAC was up 1.0% (or 36 points) at 38.

Asian Markets

Asian stocks closed lower. Japanese share prices closed down as the yen rose to a fresh 15-year high against the US dollar, sparking further fears for export company profits. Chinese shares closed flat as gains by the mining sector due to industry consolidation offset earlier losses in financial stocks.  However Chinese steel mills and mobile phone factories were idle as local governments order power cuts to meet energy-saving targets set by Beijing.  Chinese will be reporting on August trade data this week. In China the SSE Composite closed down marginally -0.1% (or -3 points) at 2,695, while in Hong Kong the Hang Seng Index was down -1.5% (or -313 points) at 21,089 and in Japan the Nikkei 225 Index was down -2.2% (or -201.40 points) at 9,025.

Commodities

The Dollar Index down -0.3% at 82.57 on higher Euro, while the Australian Dollar last traded higher at 91.82. Commodities were generally higher.

Oil prices are above $US74.  The benchmark crude NYMEX for September delivery was up 0.4% (or $US0.33) to settle at $US75.00. Copper prices lower, Copper for September delivery was up 0.9% (or 3 cents) at $US3.4905. Gold prices are around 2-month highs, are around key $US1,250 level, with December gold down marginally -0.1% at $US1,255.60.

Key News International Drivers Today

US – 5 of the 12 regions tracked by the US central bank showed mixed or slowing activity. Companies continue to report earnings this week.
EU –   Banks may need to raise EUR105 billion of extra capital under planned Basel rules.
CHINA –  China flat. Government stands firm on access to credit.
JAPAN –  Japan exporters hurt as yen rose to a fresh 15-year high .

Markets Overview

Financials Rise As European Debt Concerns Ease

Market

Movement

The Dow Jones Industrial Average

Up 0.5% (or 46 pts)  at 10,387

The S&P 500

Up 0.6% (or 7 pts)  at 1,099

The Nasdaq

Up 0.9% (or 20 pts)  at 2,229

The FTSE 100

Up 0.4% (or 22 pts)  at 5,430

The German DAX

Up 0.8% (or 47 pts)  at 6,164

The Fench CAC

Up 1.0% (or 36 pts)  at 38

The Dollar Index

Down -0.30% at 82.57

The Australian Dollar

Last traded at 91.82

The Commodities Index

Up  Marginally 0.17% at 274.3

Crude Oil Futures

Up 0.4% at $75.00

Gold Futures

Down  Marginally -0.14% at $1,255.60

Copper Futures

Up 0.86% at $3.4905

SPI Futures

Up 0.7% (or 30 pts) at 4,568

Market

Movement

SSE Composite (China)

Down  Marginally -0.1%  at 2,695

Hang Seng Index (Hong Kong)

Down -1.5%  at 21,089

Nikkei 225 Index (Japan)

Down -2.2%  at 9,025

SPI: Just Below key Level 4600 – SPI up 0.7% at 4,568…

ASX News Today

The SPI Futures is just below the key resistance level of 4600 the ASX is set to open higher as the SPI Futures closed up 0.7% (or 30 pts) at 4,568.  The key levels for our index today are 4600 and 4500. M&A activity continues to drive specific stocks. Gold prices are pushing towards new record highs.

AND- Andean Resources the gold explorer, Eldorado Gold has dropped out of the bidding war.

APA- APA Group has been upgraded to BUY by UBS, citing the company’s balance sheet well positioned.

AXA- ACCC is set set to make its final decision on NAB’s $13.3 billion bid, on Thursday.

AWB- AWB the agribusiness,says drought in Russia and weather damage in Europe has helped lift interest for Australian wheat.

CFE- Cape Lambert Resources the iron ore explorer, has begun legal action it says could stall a multi-billion dollar magnetite operation in the Pilbara region, WA.

CEU- ConnectEast Group says August traffic and revenue on Melbourne’s Eastlink toll road rose by more than 10 percent.

CTM- Centaurus Metals the iron ore explorer, will raise up to $18 million to advance its projects in Brazil.

DLS- Drillsearch Energy and Innamincka Petroleum have agreed to a “friendly merger” through a scheme of arrangement.

FGL- Foster’s Group has rejected a non-binding proposal to buy its Treasury Wine Estates wine assets for $2.3 to $2.7 billion.

MBN- Mirabela Nickel the Perth-based miner, is seeking to raise over $148 million through an institutional share placement.

OGC- OceanaGold CEO Paul Bibby has resigned for personal reasons after less than a year in the role.

RIO- Japan’s Kobe Steel has confirmed a deal with Rio Tinto Ltd for a 13 percent cut in the price of iron ore.

RSG- Resolute Mining announced a record for monthly production from its Syama Gold mine in Mali with 14,855 ounces produced during August 2010.

SDL- Sundance Resources Ltd has signed a deal with a Chinese firm regarding rail facilities for the iron ore explorer’s flagship project in West Africa.

SPN- SP Australia Networks the energy infrastructure business, is unaware why its share price has recently risen 9 percent.

STO- Santos could be facing a rights issue of about $2.8 billion according to JPMorgan.  JPMorgan STO target is now $17.

WYL- Wattyl the paint supplier is in a trading halt as its shareholders considering a $142 million takeover offer (at $1.67/share).

Economic Reports:

ABS Unemployment data (at 11:30am) (est. 5.2%)

RBA assistant governor Guy Debelle is scheduled to address the Westpac Research and Strategy Forum in Sydney.

AOFM will auction $300 million  22 Oct’10 T-Notes, auction $600 million  17 Dec’10 T-Notes, auction $600 million  11 Feb’10 T-Notes.

Companies:
New Listing – credit guarantor Zheng He Global Capital Ltd

Dividends
GWT – GWA International Ltd Full year 2010 Ex-dividend date
RIO – Rio Tinto Ltd Interim 2010 Dividend payment date

Market Summary
ASX – to open Higher
US & UK/Europe – Higher
US ADRs –  Broadly Higher!!!…

BHP up 1.4% &

RIO up 0.9%;

AWC up 4.6%

ANZ up 1.8% &

NAB up 0.8%

NEM down 0.8%,

Commodities Stock Index up 0.9%
Gold Stocks Index down 0.9%
Oil Stocks Index up 1.5%

By Michael Hevern
Head of Research<

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Posted in Morning Wrap, Stock Market Analysis | No Comments

Stock Market Analysis: Overseas Markets Pause, Financials Sell-off

Wednesday, September 8th, 2010

Stock Market Analysis

Overseas Markets Pause, Financials Sell-off

Overseas markets closed lower overnight, led by financials and miners. In Europe there are concerns that the bank “stress tests” fell short on allowing for government debt implications, and Basel III may require banks to raise EUR105 billion of extra capital under planned Basel rules.  The ASX is set to trade lower today as the RBA left rates on hold yesterday and investors assess the implications of the new Minority Labor Government.

The SPI Futures is just below the key resistance level of 4600 the ASX is set to open lower as the  SPI Futures closed down -0.6% (or -28 pts) at 4,549. The key levels for our index today are 4600 and 4500. M&A activity continues to drive specific stocks. Gold prices are pushing towards new record highs.

US Markets

U.S. markets gave back the gains of last Friday.  Investor sentiment appears to have reverted, after the Dow had its best pre-Labor Day week in two decades last week.  However, September is typically the worst month for U.S. equities markets, so we would expect at the very least some consolidation this week.  The pullback was broad-based but Financials down over 2.5 percent and Energy and Consumer Discretionary sectors were down over 1.6 percent.  Oracle was a standout in a sea of red though, as they announced Mark Hurd, formerly of Hewlett-Packard, will become its co-president and will sit on its board. Oracle shares rose 6% on the news. The shadow of the “flash crash” on 6 May still lingers and the SEC is still trying to avoid a similar situation arising and is considering changes to the trading halts in the face of abnormal market volatility. The Dow closed down -0.7% (or -69 points) at 10,379, while in the broader market the S&P 500 index down -0.8% (or -9 points) at 1,096 and the tech-heavy Nasdaq ended down -1.1% (or -25 points) at 2,209.

European Markets

European stock markets closed lower. The banking and commodities sectors led the falls. Banks sold off as EU regulators met in Basel to finalize new global rules on capital requirements and after reports that the region’s recent stress tests underestimated some lenders holdings of government debt. The Federal Association of German Banks had estimated that Germany’s 10 largest lenders may need as much as EUR105 billion of extra capital under planned Basel rules.  In Germany banks could be required to hold a Tier 1 capital level of 9% under new rules dubbed Basel III,  potentially rising to 12% in boom years in order to build reserves to pay for a downturn.  The EU finance ministers are near agreement on plans for stronger sanctions against countries that violate the EU budget rules and closer scrutiny of total national debt levels, in response to reining back the stimulus monies doled out in the GFC.  In the U.K. stocks fell for the first day in 8-sessions, led by banks and miners.  In London the FTSE 100 index closed down -0.8% (or -42 points) at 5,397, the German DAX down -1.0% (or -59 points) at 6,096, while in France the CAC was down -1.1% (or -42 points) at 3,643.

Asian Markets

Asian stock markets ended mixed, on low volumes.  In Japan exporters ended a 4-day rally on renewed worries about the strength of the yen, while steel makers rose around the region on expectations for higher Chinese steel prices. The BoJ held its policy interest rate unchanged and left open the possibility of additional emergency action to support the economy. Chinese shares ended flat ahead of their report on August trade data later this week.  In China the SSE Composite closed down marginally 0.1% (or 2 points) at 2,698, while in Hong Kong the Hang Seng Index was up marginally 0.2% (or 46 points) at 21,402 and in Japan the Nikkei 225 Index was down -0.8% (or -75 points) at 9,226.

Commodities

The  Dollar Index up 1.0% at 82.90 on lower Euro, while the Australian Dollar last traded lower at 90.93 . Commodities were generally steady.

Oil prices fell below $US74.  The benchmark crude NYMEX for September delivery was down -1.1% (or $US-0.82) to settle at $US73.78. Copper prices lower, Copper for September delivery was down -0.9% (or -3.0 cents) at $US3.4590. Gold prices are around 2-month highs, are around key $US1,250 level, with December gold was up 0.7% at $US1,257.10.

Key News International Drivers Today

US – Consolidation  after the best pre-Labor Day week in two decades . Companies continue to report earnings this week.
EU – Banks may need to raise EUR105 billion of extra capital under planned Basel rules.
CHINA – China flat. Government stands firm on access to credit.
JAPAN – Japan exporters ended a 4-day rally.

Markets Overview

Markets Pause, Led By Financials

Market

Movement

The Dow Jones Industrial Average

Down -0.7% (or -69 pts)  at 10,379

The S&P 500

Down -0.8% (or -9 pts)  at 1,096

The Nasdaq

Down -1.1% (or -25 pts)  at 2,209

The FTSE 100

Down -0.8% (or -42 pts)  at 5,397

The German DAX

Down -1.0% (or -59 pts)  at 6,096

The Fench CAC

Down -1.1% (or -42 pts)  at 3,643

The Dollar Index

Up 1.03% at 82.90

The Australian Dollar

Last traded at 90.93

The Commodities Index

Up 0.38% at 273.8

Crude Oil Futures

Down -1.1% at $73.78

Gold Futures

Up 0.65% at $1,257.10

Copper Futures

Down -0.86% at $3.4590

SPI Futures

Down -0.6% (or -28 pts) at 4,549

Market

Movement

SSE Composite (China)

Down  Marginally 0.1%  at 2,698

Hang Seng Index (Hong Kong)

Up  Marginally 0.2%  at 21,402

Nikkei 225 Index (Japan)

Down -0.8%  at 9,226

SPI: Just Below key Level 4600 – SPI down -0.6% at 4,549…

ASX News Today

The SPI Futures is just below the key resistance level of 4600 the ASX is set to open lower as the  SPI Futures closed down -0.6% (or -28 pts) at 4,549. The key levels for our index today are 4600 and 4500. M&A activity continues to drive specific stocks. Gold prices are pushing towards new record highs.

ADU- Adamus Resources shares are suspended pending an announcement regarding financing.

AND- Andean Resources the gold explorer, Eldorado Gold has dropped out of the bidding war.

AWB- AWB the agribusiness,says drought in Russia and weather damage in Europe has helped lift interest for Australian wheat.

CEU- ConnectEast Group says August traffic and revenue on Melbourne’s Eastlink toll road rose by more than 10 percent.

DLS- Drillsearch the oil and gas producer, has increased its interest in four wet gas discoveries in the Cooper Basin, SA.

DMP- Domino the pizza franchise has no intention to purchase Crust Pizza.

MQG- Macquarie Group Ltd shares fell after four brokers cut price targets on the stock following the investment bank’s profit warning.  Share down 2.2%.

OGC- OceanaGold CEO Paul Bibby has resigned for personal reasons after less than a year in the role.

QBE- QBE Insurance has been upgrade to BUY by UBS, citing earnings deterioration is set to moderate. Target now $20.00.

SBM- St Barbara is proposing to consolidate its share base, in a bid to attract international institutional investors.

WSA- Western Areas the nickel miner is seeking expansion opportunities in China.

strong>Economic Reports:

Minority Labor Government

Companies:

MML – Medusa Mining Ltd releases full year results.

Dividends

SHL – Sonic Healthcare Full year 2010 Ex-dividend date

Market Summary

ASX – to open Lower
US & UK/Europe – Lower
US ADRs –  Broadly Lower!!!…

BHP down 1.5% & RIO down 3.4%; AWC down 2.0%
ANZ down 1.2% & NAB down 0.5%
NEM up 2.0%, JHX up 3.7%, NWS down 2.5%

Commodities Stock Index down 0.8%
Gold Stocks Index up 0.6%
Oil Stocks Index down 2.2%

By Michael Hevern
Head of Research

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Posted in Morning Wrap, Stock Market Analysis | No Comments

Stock Market Analysis: US Markets Closed, Europe Markets Flat

Tuesday, September 7th, 2010

Stock Market Analysis

US Markets Closed, Europe Markets Flat

U.S. markets were closed overnight for the Labor Day Holiday, which will mean that our markets will have low trading volumes. The ASX is set to trade flat today as the RBA is expected to leave rates on hold, but they may foretell at least one rate higher by Christmas.

The SPI Futures is just below the key resistance level of 4600 the ASX is set to open flat again as the SPI Futures closed flat (or -1 pts) at 4,591. The key levels for our index today are 4650 and 4550. M&A activity continues to drive specific stocks. The earnings season comes to an end (see below).  Expect to trading volumes to be low again today.

US Markets

U.S. markets were closed overnight. The Dow was closed at 10,448, while in the broader market the S&P 500 index was closed at 1,090 and the tech-heavy Nasdaq was closed at 2,234.

European Markets

European stock markets closed marginally higher overnight, though trading volumes were thin.   The European Central Bank (ECB) President Jean-Claude Trichet said that European growth is lagging behind the U.S. and has underscored the need for structural reforms. German Banks are trying to digest realisation that the introduction of a leverage ratio as a regulatory norm may require German banks to raise EUR36 billion in extra capital. Utilities stocks were among the top performers after a broker upgrade and a German decision to extend the life of nuclear-power stations, prompted a 2 percent rise in electricity stocks. The German nuclear power plant operators will have to pay around EUR30 billion for being allowed to run their reactors longer.  In France the water and waste-management firm Veolia Environmental climbed 3.3% after an upgrade.  In London the FTSE 100 index closed up marginally 0.2% (or 11 points) at 5,439, the German DAX up 0.3% (or 20 points) at 6,155, while in France the CAC was up 0.3% (or 11 points) at 3,684.

Asian Markets

Asian shares traded higher. China’s shares ended at their highest level in almost 4-months, as the market broke out of its current trading range. The gains were led by steel makers and financial firms after better-than-expected U.S. jobs data helped ease concerns about the global economic recovery. China and the U.S. are due to release their August trade data later this week, which will impact investor sentiment.  Japanese stocks rose sharply yesterday,  but there is still investor caution on the view that the BoJ may be tested in its resolved to ease monetary policy in order to weaken the yen. Japanese stocks made broad gains led by the exporters, such as Advantest, TDK, Toshiba and Mazda Motor all up over 3 percent. There were rumours that a Nikkei report had drawn up for emergency cost reduction measures to soften the impact of yen strength, and that they expected the steps to boost fiscal 2010 earnings. In China the SSE Composite closed up 1.5% (or 41 points) at 2,696, while in Hong Kong the Hang Seng Index was up 1.8% (or 384 points) at 21,356 and in Japan the Nikkei 225 Index was up 2.1% (or 187.19 points) at 9,301.

Commodities

The Dollar Index was steady at 82.07 on higher Euro, while the Australian Dollar last traded higher at 91.47. Commodities were generally steady.

Oil prices held still above $US74.  The benchmark crude NYMEX for September delivery was down -0.7% (or $US-0.52) to settle at $US74.08.  Copper prices rose, Copper for September delivery was up 0.5% (or 1.9 cents) at $US3.5120. Gold prices are around 2-month highs, are around key $US1,250 level, with December gold was flat at $US1,249.20.

Key News International Drivers Today

US – U.S. Labor Day holiday. Companies continue to report earnings this week.
EU – Finance and Energy stocks in focus.
CHINA – China demand for copper continues. Government stands firm on access to credit.
JAPAN – Rebounded off 16-month lows.

Markets Overview

US Markets Closed, Europe Markets Flat

Market

Movement

The Dow Jones Industrial Average

Closed  at 10,448

The S&P 500

Closed  at 1,090

The Nasdaq

Closed  at 2,234

The FTSE 100

Up  Marginally 0.2% (or 11 pts)  at 5,439

The German DAX

Up 0.3% (or 20 pts)  at 6,155

The Fench CAC

Up 0.3% (or 11 pts)  at 3,684

The Dollar Index

Down  Marginally -0.04% at 82.07

The Australian Dollar

Last traded at 91.47

The Commodities Index

Down  Marginally 0.00% at *272.77

Crude Oil Futures

Down -0.7% at $74.08

Gold Futures

Flat at $1,249.20

Copper Futures

Up 0.53% at $3.5120

SPI Futures

Flat (or -1 pts) at 4,591

Market

Movement

SSE Composite (China)

Up 1.5%  at 2,696

Hang Seng Index (Hong Kong)

Up 1.8%  at 21,356

Nikkei 225 Index (Japan)

Up 2.1%  at 9,301

SPI: Just Below key Level 4600 – SPI flat at 4,591…

ASX News Today

The SPI Futures is just below the key resistance level of 4600 the ASX is set to open flat again as the SPI Futures closed flat (or -1 pts) at 4,591. The key levels for our index today are 4650 and 4550. M&A activity continues to drive specific stocks. The earnings season comes to an end (see below).  Expect to trading volumes to be low again today.

AMC- Will investment $400 million for an upgraded paper recycling facility in Sydney.

AVX- Avexa is hiring a corporate advisory firm to undertake a review of the biotech firm.

AND- Andean Resources the Sydney-based gold explorer, have jumped after it emerged from a trading halt following a takeover bid from Goldcorp Inc.  Shares surged 9.4%.

AVE- Aevum reminded shareholders to reject a the “inadequate” takeover offer from Stockland.

BHP- The Zambian government has reversed a decision to cancel BHP’s (JV) Mumbwa prospecting license, which it canceled on Wednesday.

BXB- Brambles says CHEP Automotive has secured the tender to provide pooling services to GM Europe until July 2016.

GFF- Goodman Fielder says the NZ earthquake effects on their operations are minor.

GLC- Gloucester Coal raised $7 million from a retail entitlement offer, bringing funds garnered to $441 million.

IAG- IAG expects claims from the NZ earthquake to be “entirely covered” by reinsurance arrangements and reaffirmed earnings guidance for this year.

JET- Jetset Travelworld the travel agency, says shareholders have voted overwhelmingly in favour of a merger with Stella Travel Services.

LYC- Lynas Corp the rare earths mine developer announced a substantial increase in the mineral resource estimate for its Mount Weld project near Laverton in WA.

MQG- Macquarie Group has forecast that 1H10 profit will be down by 25 percent because conditions in the markets have been weak.Shares dropped 4.7%.
|
MSL- The MAC Services Group mining services provider will build a workers accommodation village in Narrabri to service the area’s growing coal industry.

NGF- Norton Gold Fields the gold miner, has completed a litigation settlement with Lehman Brothers related to its hedging arrangements.  Shares surged 20%.

NZO- NZ Oil & Gas will buy back 8.5 million of its ordinary shares to boost its share price, as its shares are “significantly below fair value”.

STU- Stuart Petroleum Ltd says the company’s first oil had flowed from its Worrior 7 well in South Australia’s Cooper Basin. Shares surged 18%.

SUN- Suncorp-Metway says it will be “some time” before an accurate assessment can be made.

WHS- The Warehouse says the NZ earthquake effects on their operations are minor.

WOW- Woolworths Ltd will offload $900 million of its retail sites from the company’s property portfolio, though no timetable has been formalised.

Economic Reports:
RBA Interest Rate Decision
August Home Loans Report
Australia should find out today who will form the next minority government.

Companies:
MML – Medusa Mining Ltd releases full year results.
Xstrata Coal Ltd CEO Peter Freyberg speaks at a business lunch in Sydney.
Shell Development (Australia) Pty Ltd executive vice president Ann Pickard speaks in Perth.

Dividends
HIL – Hills Industries Ltd   Full year 2010 Ex-dividend date

Market Summary
ASX – to open Higher
US & UK/Europe – higher

By Michael Hevern
Head of Research

Tags: , , , , , , , , , , , , ,
Posted in Morning Wrap, Stock Market Analysis | No Comments

Stock Market Analysis: US Markets Higher On Encouraging Unemployment Report

Sunday, September 5th, 2010

Stock Market Analysis

US Markets Higher On Encouraging Unemployment Report

Overseas markets finish higher on Friday, ending a cracking week, as economic news worldwide surprised to the upside. On Friday U.S. markets finished the week higher as government data showed U.S. job losses mounted at a more modest pace than expected in August. The ASX is set to start the week higher, but trading volumes may be impacted by the Labor Day holiday in the U.S.

The SPI Futures is just below the key resistance level of 4600, the ASX is set to open higher again as the SPI Futures closed up 1.1% (or 50 pts) at 4,587 (up 4.5% for week). The key levels for our index this week are 4650 and 4300. M&A activity continues to drive specific stocks. The earnings season comes to an end (see below).  Expect the trading volumes to be low early on in the week.

US Markets

U.S. stocks climbed Friday, snapping a 3-week losing streak. All of the sectors rose, led by financials. The markets had their best pre-Labor Day week in 2-decades. All 30 of the Dows components rose, with J.P. Morgan up 2.7%, Caterpillar up 2.3% and IBM up 2%, the best performers. The Dow rose 2.9% this week, having its biggest weekly gain since 23 July. U.S. unemployment rates edged higher to 9.6%, but the worse than expected service sector data contrasted with the better than expected U.S. labor report, which showed job losses continued to rise, but at a slower pace. Non-farm payrolls fell by 54,000 last month, better than the loss of 110,000 economists had forecast. The jobs data followed reports on housing and manufacturing last week that came in above expectations, easing concerns of a double-dip recession. The Dow closed up 1.2% (or 128 points) at 10,448  (up 2.9% for week), while in the broader market the S&P 500 index up 1.3% (or 14 points) at 1,105  (up 3.7% for week) and the tech-heavy Nasdaq ended up 1.5% (or 34 points) at 2,234  (up 3.7% for week).

European Markets

European stocks posted their biggest weekly gains since July as economic reports from the U.S. and China surprised to the upside. Rio and Xstrata led the advance in resource stocks as manufacturing in China grew at a faster pace in August. The German market is still out performing and bounced off key monthly support levels overnight, as stocks are now trading at their cheapest levels relative to earnings since 2008. The rises were restrained by reports that growth in Europe’s manufacturing industry slowed in August and export demand fell to the lowest in seven months. Most U.K. stocks advanced, (led by banks) extending the benchmark index’s biggest rally in almost two months. In London the FTSE 100 index closed up 1.1% (or 57 points) at 5,428  (up 4.4% for week) , the German DAX up 0.8% (or 51 points) at 6,135  (up 3.1% for week), while in France the CAC was up 1.1% (or 42 points) at 3,672  (up 4.7% for week).

Asian Markets

Asian stock markets generally advanced Friday, ending the week with the biggest weekly increase in three.  Japanese stocks posted their third consecutive gain on the back of strong exporters, while in China weakness in Chinese banking and property stocks weighed on the markets.  Chinese banks broadly declined after reports that loans with potentially high credit risk increased at four of China’s five biggest banks during the second quarter from the preceding three months.  Food demand is increasing in China with reports that China may boost their corn imports 3-fold in the the next twelve months.  In China the SSE Composite closed flat at 2,655 (up 1.7% for week), while in Hong Kong the Hang Seng Index was up 0.5% (or 103 points) at 20,972  (up 1.8% for week) and in Japan the Nikkei 225 Index was up 0.6% (or 5129 points) at 9,114 (up 1.4% for week).

Commodities

The Dollar Index down marginally -0.2% at 82.018 on higher Euro, while the Australian Dollar last traded higher at 91.65. Commodities were generally higher.

Oil prices held still above $US74.  The benchmark crude NYMEX for September delivery was down -0.6% (or $US-0.42) to settle at $US74.34  (down -1.6% for week).  Copper prices rose, Copper for September delivery was up 0.2% (or 0.6 cents) at $US3.4935  (up 3.3% for week). Gold prices are around 2-month highs, are above key $US1,250 level, with December gold was down marginally -0.2% at $US1,247.40 (up 0.9% for week).

Key News International Drivers Today

US – U.S. unemployment rate edges higher to 9.6%. Companies continue to report earnings this week.
EU – End of a bad month.  U.K. manufacturing suffered a sharp slowdown last month.
CHINA – China may boost their corn imports 3-fold in the the next year. Government stands firm on access to credit.
JAPAN – Rebounded off 16-month lows.

Markets Overview

US Markets Higher On Encouraging Unemployment Report


Market

Movement

The Dow Jones Industrial Average

Up 1.2% (or 128 pts)  at 10,448 (up 2.9% for week)

The S&P 500

Up 1.3% (or 14 pts)  at 1,105 (up 3.7% for week)

The Nasdaq

Up 1.5% (or 34 pts)  at 2,234 (up 3.7% for week)



The FTSE 100

Up 1.1% (or 57 pts)  at 5,428 (up 4.4% for week)

The German DAX

Up 0.8% (or 51 pts)  at 6,135 (up 3.1% for week)

The Fench CAC

Up 1.1% (or 42 pts)  at 3,672 (up 4.7% for week)



The Dollar Index

Down  Marginally 0.00% at *82.018

The Australian Dollar

Last traded at 91.65

The Commodities Index

Up 0.60% at 272.8



Crude Oil Futures

Down -0.6% at $74.34 (down -1.6% for week)

Gold Futures

Flat at $1,247.40 (up 0.9% for week)

Copper Futures

Up  Marginally 0.16% at $3.4935 (up 3.3% for week)

SPI Futures

Up 1.1% (or 50 pts) at 4,587 (up 4.5% for week)





Market

Movement

SSE Composite (China)

Down  Marginally 0.0%  at 2,655 (up down 1.7% for week)

Hang Seng Index (Hong Kong)

Up 0.5%  at 20,972 (up down 1.8% for week)

Nikkei 225 Index (Japan)

Up 0.6%  at 9,114 (up down 1.4% for week)

SPI: Just Below key Level 4600 – SPI up 1.1% at 4,587…

ASX News Today

The SPI Futures is just below the key resistance level of 4600 the ASX is set to open higher again as the SPI Futures closed up 1.1% (or 50 pts) at 4,587 (up 4.5% for week). The key levels for our index this week are 4650 and 4300. M&A activity continues to drive specific stocks. The earnings season comes to an end (see below). Expect to trading volumes to be low early in the week.

AMC- Will investment $400 million for an upgraded paper recycling facility in Sydney.

AVX- Avexa is hiring a corporate advisory firm to undertake a review of the biotech firm.

AND- Andean Resources has become the subject of a bidding war between two Canadian global gold majors (Goldcorp and Eldorado at $C6.50/share a 35% premium). Andean has shone over the past two years through the rapid development of its high-grade, low-cost Cerro Negro gold project in Argentina, which contains 2.1 Mill ozs of gold and 20.6 Mill ozs of silver in probable reserves.

BHP- Chinese and other investors have approached Canadian pension manager(s) about a rival bid for Canada’s Potash Corp (BHP Billiton’s hostile offer stands at $US39 billion)

FMG- Fortescue Metals has rejected a claim for damages from its third largest shareholder in relation to a 2006 loan agreement.

NGM- NGM Resources the minerals explorer, has advised shareholders to accept a takeover bid from Paladin Energy, giving them a more diversified company.

NQM- Heemskirk says it will allow its bid for North Queensland Minerals (NQM) to lapse when it expires on 10 Sept.

NUF- Nufarm has been placed on credit watch by ratings agency S&P, on concerns about its rising debt and future profitability.  NUF also faces a class action against suit for misleading conduct relating to profit forecasts.

QAN- Qantas says global operating conditions have rebounded, but the industry remains competitive.

STO – Santos will meet credit investors in Europe and is considering an issue of hybrid debt, UBS and DB are arranging the investor presentations.

TLS – Telstra will sell its 50.5 percent stake in SouFun Holdings when the Chinese real estate website has an IPO later this year.

Economic Reports:

AIG Construction Index
Negotiations continue to resolve hung parliament

Companies:

DOM – Dominion Mining LtdmFull year 2010 Preliminary results

Dividends:

AMP – AMP Ltd Interim 2010 Ex-dividend date
AWC – Alumina Ltd Interim 2010 Dividend payment date
BHP – BHP Billiton Limited Full year 2010 Ex-dividend date
AGK – AGL Energy Limited Full year 2010 Ex-dividend date
KCN – Kingsgate Consolidated Ltd Full year 2010 Ex-dividend date
LEI – Leighton Holdings Full year 2010 Ex-dividend date
LLC – Lend Lease Corp Full year 2010 Ex-dividend date -
OST – OneSteel Limited Full year 2010 Ex-dividend date
RIC – Ridley Corporation Ltd Full year 2010 Ex-dividend date
WAN – West Australian Newspaper Full year 2010 Ex-dividend date

Market Summary
ASX – to open Higher
US & UK/Europe – higher
US ADRs –  Broadly Higher!!!…

BHP up 0.9% & RIO up 1.6%; AWC up 2.8%
ANZ up 0.3% & NAB up 0.3%
NEM down 0.8%, JHX up 1.1%, NWS up 1.3%<

Commodities Stock Index up 0.8%
Gold Stocks Index up 0.4%
Oil Stocks Index up 1.3%

By Michael Hevern
Head of Research

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Posted in Morning Wrap, Stock Market Analysis | No Comments

Stock Market Analysis: Weekly Market Wrap

Friday, September 3rd, 2010

Weekly Market Wrap

The market started the week lower as investors ruled off the worst August performance in almost a decade, trading volumes were also anemic which was a concern as well. However a huge turnaround in investor sentiment was triggered by better-than-expected economic data in the US, China and Australia, and markets in the US, Europe and Asia are all ending the week higher.

The ABS confirmed that Australia’s economic growth for the June quarter rose a surprising 1.2 percent which is the biggest quarterly gain in economic growth for 3 years. This translates to a 3.3 percent annual GDP growth which significantly exceeded analysts’ forecasts. Asian economic data triggered a surge in share prices worldwide after a surprisingly upbeat trading and economic growth report.

US Markets

US markets ended sharply higher this week on the back of surprisingly good economic data. Investors were spooked early in the week after the Federal Reserve said that the outlook for the US economy would have to deteriorate “appreciably” to warrant any fresh support from the central bank. This eliminated hope of another stimulus package for the US. Then a report that US manufacturing activity expanded in August for a 13th straight month triggered investor optimism that the dreaded “double dip” may be averted.

The CBOE Volatility Index, known as the market fear gauge, has been falling to 23.19 this week, confirming the reversal of investor sentiment. Overnight, the Dow closed up 0.5% at 10,320, while in the broader market the S&P 500 index up 0.9% at 1,090 and the tech-heavy Nasdaq ended up 1.1% at 2,200.

European Markets

European stocks started the week flat but then surged as the new month unfolded. EU economic data has continued to point to a slowing recovery, with the UK manufacturing suffering a sharp slowdown last month amid uncertainty about the extent of public spending cuts. Growth in Europe’s manufacturing industry slowed in August and export demand fell to the lowest levels in seven months. Investors chose to take their leads from the US and Asian economies and followed these markets higher. Overnight in London, the FTSE 100 index closed up marginally 0.1% at 5,371. The German DAX was flat at 6,084, while in France the CAC was down marginally 0.1% at 3,631.

Asian Markets

Asian markets traded higher this week. Chinese markets held on to recent gains, after reports that manufacturing in China grew at a faster pace in August following the weakest performance since early 2009, indicating that the Chinese government-engineered economic slowdown will be limited. Even Japan managed to end the week higher after rebounding off 16-month lows earlier in the week, after the Bank of Japan (BoJ) announced emergency moves to address the strength of the yen. Overnight in China the SSE Composite closed up 1.3% at 2,656, while in Hong Kong the Hang Seng Index was up 1.2% at 20,869 and in Japan the Nikkei 225 Index was up 1.5% at 9,063.

Commodities

Wheat prices are again trading around 2-year highs. Oil prices bounced this week jumping above $US74 again. Overnight the benchmark crude NYMEX for September delivery was up 1.4% (or $US1.05) to settle at $US74.96.

Copper prices also rose. Copper for September delivery was up 0.4% (or 1.4 cents) at $US3.4820. Gold prices rose to 2-month highs, above the key $US1,250 psychological level, and look to be heading for new record highs with December gold up 0.4% at $1,251.00.

ASX News

The ASX market has been boosted by “outstanding” economic reports from the Australian Bureau of Statistics (ABS). On Tuesday, the ABS confirmed that Australia’s economic growth for the June quarter rose a surprising 1.2 percent, the biggest quarterly gain in economic growth for 3 years. This translates to a 3.3 percent annual GDP growth which significantly exceeded analysts’ forecasts. The ABS also confirmed that Australia recorded its smallest current account deficit since the first quarter of 2002.

The seasonally adjusted deficit improved by almost $11 billion to $5.64 billion in the June quarter, as commodity exports boosted earnings. The improvement was primarily driven by a sharp rise in the value of commodity exports which was largely due to a shift to shorter-term contracts. The value of iron ore and mineral exports surged 43 percent with a 39 percent jump in prices, while coal exports jumped 52 percent with a steep rise in both prices and volumes. This sale of rural goods also rose 6 percent on the quarter. Investor sentiment turned around on this news and pushed the markets significantly higher.

Our View
Markets have surged higher this week after a dismal August, and the ASX is testing the top of the trading range that has been in place for the past four months. We would expect to see some consolidation next week, where the 4600 level will be key.

The US releases its Non-Farm Payrolls report tonight which will set the tone for next week.

The S&P ASX200 is currently trading at 4540, at the upper quarter of the current trading range. The key resistance level on the ASX is around 4600 and the key levels for our index next week are 4650 and 4400, with pivot at 4500. The momentum is to the upside and the 4600 level is key resistance near term.

By Michael Hevern
Head of Research

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Posted in Stock Market Analysis, Trader Dealer News | No Comments

Stock Market Analysis: Dismal August Ends; Gold at 2-Year Highs

Wednesday, September 1st, 2010

Stock Market Analysis

Dismal August Ends; Gold at 2-Year Highs

U.S. markets ended the month down for a third month in four. The Mining and Financial sectors recovered over 0.5%, as gold prices reached 2-month highs and crude oil sells-off on weakening demand. European stocks recovered overnight, but most indices recorded their largest monthly decline in August since May. Asian markets generally had a weak August, except for China which ended the month flat. The ASX will likely recover today on the back a some good economic news yesterday, be prepared to protect your portfolios.

The SPI Futures is above the key level of 4400 the ASX is set to open higher as the SPI Futures closed up 0.9% (or 41 pts) at 4,428 (down -2.6% for August). The key levels for our index today are 4500 and 4350. M&A activity continues to drive specific stocks. Expect to see our market trade higher as the earnings season comes to an end (see below). Gold stocks set to shine. The market will be digest yesterday’s rosey economic reports from the RBA and the ABS, with the current account deficit contracting to levels not seen in nearly 50 years.

US Markets

U.S. stocks ended flat as the S&P 500 again bounced off the key technical level of 1,040. US consumer confidence rose more than expected in August, while home prices rose in June, though a separate report showed business activity in the US Midwest grew in August a less-than-expected. The Federal Reserve said the outlook for the US economy would have to deteriorate “appreciably” to warrant fresh support from the central bank. The positive data surprises supported the markets early, but the Fed’s comments and declines in technology shares capped overall gains. Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 5 to 4, while on the Nasdaq the ratio was about about even. The S&P 500 fell 4.7 per cent in August, and has been down 3 of the past 4-months, also of concern is that the month saw 5 of the lowest daily trading volumes for the year. For the month, the Dow fell 4.31 per cent while the Nasdaq tumbled 6.24 per cent. The S&P 500 lost 4.75 per cent, posting its worst August since 2001 in terms of per centage declines. The Dow closed up marginally 0.1% (or 5 points) at 10,015, while in the broader market the S&P 500 index up marginally 0.0% (or 0 points) at 1,049 and the tech-heavy Nasdaq ended down -0.3% (or -6 points) at 2,114.

European Markets

European stocks recovered overnight, but most indices recorded their largest monthly decline in August since May. For the month, the FTSE fell 0.8 per cent while the in Germany the markets tumbled 3.4 percent and in France the market declined 4.5 percent. The German market is still out performing but is now trading a key support levels that have been in place for the 6-months now. European market movements will be dictated by sovereign debt issues and the U.S. ISM manufacturing and employment data, plus Chinese PMI manufacturing data. Ireland will be auctioning debt later this week. In London the FTSE 100 index closed up 0.5% (or 24 points) at 5,225, the German DAX up marginally 0.2% (or 13 points) at 5,925, while in France the CAC was up 0.3% (or 10 points) at 3,491.

Asian Markets

Asian markets generally traded lower. Japan led the decliners, falling 3.6 percent to a 16-month closing low, the worst session since June. Declining shares outnumbered advancing ones by 32 to 1. Investors rushed for the exits after the Bank of Japan’s (BoJ) emergency moves the day before failed to impact the yen’s strength. Japanese markets slid 7.5 per cent this month, its worst month since May. Hong Kong stocks traded lower too, with the market down 2.8 percent for the month. China’s stock fell, but are still holding in a trading range,ending August flat. In China the SSE Composite closed down -0.5% (or -14 points) at 2,639, while in Hong Kong the Hang Seng Index was down -1.0% (or -201 points) at 20,536 and in Japan the Nikkei 225 Index was down sharply -3.6% (or -32520 points) at 8,824.

Commodities

The Dollar Index down marginally -0.1% at 83.10 on higher Euro, while the Australian Dollar last traded higher at 89.21. Commodities were generally lower.

Oil prices fell again. The benchmark crude NYMEX for September delivery down sharply -3.7% (or $US-2.78) to settle at $US71.68. Copper prices bounced off monthly lows, Copper for September delivery was down -1.5% (or -5.2 cents) at $US3.3700. Gold prices are above key $US1,200 level, with December gold was up 0.9% at $US1,247.50.

Key News International Drivers Today

US – Economic data tepid. Companies continue to report earnings this week.

EU – End of a bad month.
CHINA – Government stands firm on access to credit.
JAPAN – Markets sell-off heavily as BoJ is rendered impotent.

Markets Overview

Market

Movement

The Dow Jones Industrial Average

Up Marginally 0.1% (or 5 pts) at 10,015

The S&P 500

Up Marginally 0.0% (or 0 pts) at 1,049

The Nasdaq

Down -0.3% (or -6 pts) at 2,114



The FTSE 100

Up 0.5% (or 24 pts) at 5,225

The German DAX

Up Marginally 0.2% (or 13 pts) at 5,925

The Fench CAC

Up 0.3% (or 10 pts) at 3,491



The Dollar Index

Down Marginally -0.07% at 83.10

The Australian Dollar

Last traded at 89.21

The Commodities Index

Down -1.33% at 264.2



Crude Oil Futures

Down Sharply -3.7% at $71.68

Gold Futures

Up 0.91% at $1,247.50

Copper Futures

Down -1.52% at $3.3700

SPI Futures

Up 0.9% (or 41 pts) at 4,428





Market

Movement

SSE Composite (China)

Down -0.5% at 2,639

Hang Seng Index (Hong Kong)

Down -1.0% at 20,536

Nikkei 225 Index (Japan)

Down Sharply -3.6% at 8,824


Dismal August Ends; Gold at 2-Year Highs

SPI: Above key Level 4400 – SPI up 0.9% at 4,428….

ASX News Today

The SPI Futures is above the key level of 4400 the ASX is set to open higher as the SPI Futures closed up 0.9% (or 41 pts) at 4,428 (down -2.6% for August). The key levels for our index today are 4500 and 4350. M&A activity continues to drive specific stocks. Expect to see our market trade higher as the earnings season comes to an end (see below). Gold stocks set to shine. The market will be digest yesterday’s rosey economic reports from the RBA and the ABS.

BHP- Japanese steelmakers have agreed with BHP to a seven percent cut in coking coal prices for the three-month period ending 31 Dec’10.

CBA- CommBank has overtaken Bank Ltd (NAB) as the country’s biggest business lender, as its market leading satisfaction levels pay dividends.

CNP- Centro Properties Group posted a $653 million annual loss as it continues to address debt issues.

GRR- Grange Resources the magnetite producer, full year profit was hit hard by the GFC down 50.4%, with revenues down 35.7%, but a move to index pricing is improving its fortunes.

MAP- MAp Group will be down-weighted on the MSCI standard index.

MRE- Minara Resources reported swing to 1H10 profit (of $30 million) on lower volumes, but says nickel and cobalt prices remain volatile.

NCM- Newcrest Mining outperformed the broader ASX shares ahead of an up-weighting of Newcrest in the MSCI standard index. Shares jumped 3.4%.

PSA- Petsec Energy says restrictions on drilling in the Gulf of Mexico and a shut-in at its largest field have hit its operations, causing an earnings drop, with 1H10 loss now $34 million.

QAN- Qantas says passenger numbers rose 9.1 per cent in July.

RCY- Rivercity Motorway the operator of Brisbane’s Clem 7 toll road, faces serious financial concerns after writing down the value of the cross-city tunnel by over $1.5 billion.

SXL- Southern Cross Media recorded an FY10 $82.7 million loss and is cautiously optimistic about this year.

UNS- Unilife Medical Solutions the medical device maker, reported surge in losses with FY10 loss of $33 million, due to a drop in revenue and costs associated with the company’s move to the U.S.

Economic Reports:

Quarterly GDP (forecast is 0.9%)
AIG Manufacturing Index
July Building Approvals
July Retail Trade
2Q International Investment Position
2Q Balance of Payments Jul International Reserves & Foreign Currency Liquidity

Negotiations to resolve hung parliament
Companies:

IIF – ING Industrial Fund Full year 2010 Results
PDN – Paladin Energy Ltd Full year 2010 Preliminary results

Dividends

APN – APN News & Media
BDG – Bendigo Mining Ltd
CTX – Caltex Australia
FWD – Fleetwood Corp
PPT – Perpetual Limited
STO – Santos Ltd
OZL – OZ Minerals
IFL – IOOF Holdings Ltd
TTS – Tatts Group Ltd
AMC – Amcor Limited

Market Summary
ASX – to open Higher
US & UK/Europe – Mixed
US ADRs – Mixed!!!…

BHP up 1.3% &

RIO up 2.3%;

AWC down 0.7%

ANZ up 0.2% &

NAB up 0.2%

NEM up 2.3%,

JHX up 0.2%,

NWS up 1.2%

Commodities Stock Index up 0.4%
Gold Stocks Index up 0.9%
Oil Stocks Index down 0.2%

By Michael Hevern
Head of Research

Tags: , , , , , , , , , , , ,
Posted in Morning Wrap, Stock Market Analysis | No Comments

Stock Market Analysis: Caution Ahead of U.S. ISM and Employment Reports

Tuesday, August 31st, 2010

Stock Market Analysis

Caution Ahead of U.S. ISM and Employment Reports

U.S. and European stocks fell overnight. Reports on U.S. consumers spending and house failed to inspire investors, as the U.S. trading volume was the lightest for the year. Commodity prices were continued higher as investors looked to add risk to their portfolios.

The ASX will follow overseas leads lower, but their is plenty of enconomic data to digest throughout the day.

The SPI Futures is below the key level of 4400 the ASX is set to open lower as the SPI Futures closed down -1.2% (or -54 pts) at 4,392. The key levels for our index today are 4450 and 4350. M&A activity continues to drive specific stocks. Expect to see our market trade lower as the earnings season comes to an end (see below). We have busy data for economic reporting with the RBA releasing GDP data and the financial aggregates data for July, and the Australian Bureau of Statistics (ABS) issuing retail trade data, building approvals, and data on Australia’s international investment position, all for July, and Australia’s balance of payments and government spending data, both for the June quarter.

US Markets

U.S. stocks traded lower despite the growing deal activity. Concerns over a faltering economic recovery overshadowed data showing a rise in consumer spending and income, as the Commerce Department reported Consumer spending for July roses 0.4%, but their incomes increased less than expected (up 0.2%). This confirms Americans are spending a little more this northern summer, but hardly enough to jump start the weakening economy. U.S. home purchase prices rose 3.1% in the 2Q, and 13% annualised rate, but prices will come under pressure as first-time home-buyer tax credit incentives are no longer available. Elsewhere, business conditions in Texas-area August manufacturing production remain in contraction, as production stayed almost flat and employment worsened. The selling was broad-based with Mining, Energy, Consumer Discretionary and Financial sectors all down over 1.5%. On the NYSE declining stocks outnumbered advancing ones by 7 to 2, while on the Nasdaq the ratio was 4 to 1. The key data this week will be U.S. unemployment on Friday night. The Dow closed down -1.4% (or -141 points) at 10,010, while in the broader market the S&P 500 index down -1.5% (or -16 points) at 1,049 and the tech-heavy Nasdaq ended down -1.6% (or -34 points) at 2,120.

European Markets

European stock markets closed lower, in light trading. London markets were closed. The European Commission reported, economic confidence in the 16 EU countries rose to its highest level in nearly two and a half years during August. This report suggests that the euro-zone recovery remains on track, with the economic sentiment indicator continuing to improve in August, rising to 101.8, after a surge in July. BHP’s hostile $US39 billion bid for Canada’s Potash Corp is still the only one on the table. In London the FTSE 100 index was closed at 5,202, the German DAX down -0.7% (or -39 points) at 5,912, while in France the CAC was down -0.6% (or -22 points) at 3,487.

Asian Markets

Asian markets traded generally higher. Japanese shares rose as much as 3.2% but ended well off the day’s highs as traders were disappointed by the Bank of Japan’s new easing measures aimed at addressing their depressed economic recovery and a high yen. The Yen continued to rise as markets want policymakers to do more. Chinese shares rose after investor confidence in the durability of the global recovery was boosted by Fed’s promise to take action if the U.S. economy falters. But monetary policy remains in a tightening bias, as the Ag Bank of China said it has temporarily suspended property market loans to counter a surge in real-estate lending, but insisted the country’s property sector was “healthy.” In China the SSE Composite closed up 1.6% (or 42 points) at 2,653, while in Hong Kong the Hang Seng Index was up 0.7% (or 140 points) at 20,737 and in Japan the Nikkei 225 Index was up 1.8% (or 158 points) at 9,149.

Commodities

The Dollar Index up 0.3% at 83.17 on lower Euro, while the Australian Dollar last traded higher at 89.14. Commodities were generally higher.
US wheat prices jumped 5 per cent. Oil prices fell. The benchmark crude NYMEX for September delivery was down -0.6% (or $US-0.47) to settle at $US74.08. Copper prices bounced off monthly lows, Copper for September delivery delivery was up 1.5% (or 5.0 cents) at $US3.3900. Gold prices are above key $US1,200 level, with December gold was up marginally 0.1% at $US1,236.90.

Key News International Drivers Today

US – Rise in consumer spending and income tepid. Companies continue to report earnings this week.
EU – economic confidence in the 16 EU countries at 2-ana-a-half year highs.
CHINA – Government stands firm on access to credit, falls led by real estate and steelmakers.
JAPAN – BoJ applies new easing measures. Companies continue to report earnings this week.

Markets Overview

Caution Ahead of U.S. ISM and Employment Reports

Market

Movement

The Dow Jones Industrial Average

Down -1.4% (or -141 pts) at 10,010

The S&P 500

Down -1.5% (or -16 pts) at 1,049

The Nasdaq

Down -1.6% (or -34 pts) at 2,120



The FTSE 100

Up 0.9% (or 46 pts) at 5,202

The German DAX

Down -0.7% (or -39 pts) at 5,912

The Fench CAC

Down -0.6% (or -22 pts) at 3,487



The Dollar Index

Up 0.30% at 83.17

The Australian Dollar

Last traded at 89.14

The Commodities Index

Up Marginally 0.18% at 267.8



Crude Oil Futures

Down -0.6% at $74.08

Gold Futures

Up Marginally 0.12% at $1,236.90

Copper Futures

Up 1.49% at $3.3900

SPI Futures

Down -1.2% (or -54 pts) at 4,392





Market

Movement

SSE Composite (China)

Up 1.6% at 2,653

Hang Seng Index (Hong Kong)

Up 0.7% at 20,737

Nikkei 225 Index (Japan)

Up 1.8% at 9,149


SPI: Below key Level 4400 – SPI down 1.2% at 4,392….

ASX News Today

The SPI Futures is below the key level of 4400 the ASX is set to open loweer as the SPI Futures closed down -1.2% (or -54 pts) at 4,392. The key levels for our index today are 4450 and 4350. M&A activity continues to drive specific stocks. Expect to see our market trade lower as the earnings season comes to an end (see below). We have busy data for economic reporting with the RBA releasing GDP data and the financial aggregates data for July, and the Australian Bureau of Statistics (ABS) issuing retail trade data, building approvals, and data on Australia’s international investment position, all for July, and Australia’s balance of payments and government spending data, both for the June quarter.

AJL- AJ Lucas Group posted a full year loss (of $7.3 million), Revenue fell 28.2%, and replaces senior management after a “disappointing” year of “uncertainty and project delays”.

ALD- Allied Gold posted a 244 percent profit rise (to $10.3 million), after substantially upgrading the value of its Solomon Islands project.

AMC- Amcor posted a 13.6% full year loss (of $183 million), due to the Aussie dollar strength. The CEO described the result as “solid”.

BPT- Beach Energy the oil and gas firm, posted an 87 percent fall in net profit (of $33.4 million), but is well placed for growth after a solid year.

KAR- Karoon the energy explorer has acquired a 20 percent interest in 2 Brazilian oil wells, with drilling results expected end-September.

KCN- Kingsgagte the gold miner, has more than doubled annual profit (of $73 million), Revenue surged 54%, but forecast a slight fall in gold production this year.

MQA- Macquarie Atlas Roads posted a half-year loss but it expects revenue to increase this year.

NCM- Has taken the reigns of Lihir Gold.

NWH- NRW Holdings the civil and resources services contractor, reported a lower annual profit, but expects to rebound on the improving mining activity.

RIO- Rio Tinto will invest $1.8 billion to develop the Hope Downs 4 iron ore project in WA, to link it with existing rail, power and port infrastructure in the Pilbara.

SKC- Sky City Entertainment will invest up to $198 million in its Adelaide Casino.

STO- Santos has signed a deal with Texan company Apache Energy Ltd to produce gas from the Halyard and Spar fields offshore from WA.

TSE- Transfield Services won a contract to expand Caltex’s fuel terminal at Port Hedland in north-west WA.

WOW- Woolworths upgraded to a BUY by Citi.

Economic Reports:

Quarterly GDP (forecast is 0.9%)
AIG Manufacturing Index
July Building Approvals
July Retail Trade
2Q International Investment Position
2Q Balance of Payments Jul International Reserves & Foreign Currency Liquidity

Negotiations to resolve hung parliament

Companies:

CNP – Centro Properties Group Full year 2010 Results
SXL – Southern Cross Media Full year 2010 Results

Dividends

ANN – Ansell Ltd Full year 2010 Ex-dividend date
EHL – Emeco Holdings Ltd Full year 2010 Ex-dividend date
IIF – ING Industrial Fund Full year 2010 Dividend payment date
IOF – ING Office Fund Full year 2010 Dividend payment date
NVT – Navitas Ltd Full year 2010 Dividend payment date
ORG – Origin Energy Ltd Full year 2010 Ex-dividend date
RHC – Ramsay Health Care Full year 2010 Ex-dividend date
SGP – Stockland Full year 2010 Dividend payment date
SPT – Spotless Group Ltd Full year 2010 Ex-dividend date
WDC – Westfield Group Interim 2010 Dividend payment date

Market Summary
ASX – to open lower
US & UK/Europe – Lower
US ADRs – Broadly Lower!!!…

BHP down 1.3% &

RIO down 2.2%;

AWC up 0.2%

ANZ down 1.2% &

NAB down 1.1%

NEM flat,

JHX up 1.4%,

NWS down 0.4%

Commodities Stock Index down 1.3%
Gold Stocks Index down 0.7%
Oil Stocks Index down 1.6%

By Michael Hevern
Head of Research

Tags: , , , , , , , , , ,
Posted in Morning Wrap, Stock Market Analysis | No Comments

Stock Market Analysis: Weekly Market Wrap

Friday, August 27th, 2010

Weekly Market Wrap – Market “Flash Crash” Lows Looming

Markets are generally trading lower for a third week, particularly in the US and Europe. In Asia the markets have been mixed, but they are still trading below their levels of 3 weeks ago. Most markets look set to test the “flash crash” lows of last May, near term. M&A activity in August has been the busiest in decades, however this has not been enough to support the underlying markets.

This week Australian company earnings reports were mixed, and this was reflected in shares activity. Forecast earnings are generally uncertain.

Within this weekly market wrap, we have outlined below some investment themes to consider.

US Markets

US markets generally traded lower this week on the back of weak economic data. Overnight, concerns remained over the uncertain outlook for jobs. There was also caution as the Fed Chairman, Ben Bernanke, will speak tonight, and also the gross domestic product data (GDP) is due to be released (estimates are for 1.4% growth).

Overnight the CBOE Volatility Index, known as the market fear gauge, has risen to 27.4, reflecting investor concerns and expectation of more drops in stocks. The Dow closed down -0.7 at 9,986, while in the broader market the S&P 500 index was down -0.8% at 1,047 and the tech-heavy Nasdaq ended down -1.1% at 2,119.

European Markets

European stocks have fallen for a third straight week. Concerns over the faltering US recovery have outweighed any good news from Europe. Financials have been under pressure on continuing worries over sovereign debt, particularly in Italy and Spain, with a debt rating downgrade. Overnight in London the FTSE 100 index closed up 0.9% at 5,156. The German DAX up marginally 0.2% at 5,913, while in France the CAC was up 0.8% at 3,475.

Asian Markets

Asian markets generally traded lower this week. Japan continues to trade below its 8-month lows and below the key 9,000 level. The Japanese export-driven economy is still suffering from the Yen trading new 15-year highs.

Hong Kong stocks are also being sold down and are trading at 5-week lows. Chinese investors remain cautious as uncertainty remains over whether the government will relax the tight credit polices which it is using to rein in growth. Overnight in China, the SSE Composite closed up 0.3% at 2,603, while in Hong Kong the Hang Seng Index was down marginally -0.1% at 20,612 and in Japan the Nikkei 225 Index was up 0.7% at 8,906.

Commodities

Wheat prices are again trading towards 2-year highs. Oil prices continued to trade below key support levels, as a weakening outlook on the economic recovery stoked fears of dropping oil demand. Overnight the benchmark for crude NYMEX for September delivery was up 0.8%, to settle at $US73.09; Copper prices have backed off 3-month highs. Copper for September delivery was up 9.5 cents at $US3.3010. Gold prices rose above the key $US1,200 psychological level and look to be heading for new record highs, with December gold down marginally -0.2% at $US1,237.70.

Overnight the US Dollar Index was down -0.4% at 82.90 but is still at 5-week highs against the Euro, while the Australian Dollar last traded lower this week at 88.33.

Investment Themes to Consider

As mentioned earlier, this week Australian shares have been mixed as company earnings reports were also mixed, and forecast earnings are generally uncertain. However there are still some opportunities in this market, including:

* Gold: For the past 10 years Gold has made two thirds of its annual gains in the last one third of the year and September has been the best performing month. So traders should keep gold and gold stocks in their sights in the next month.

* Agricultural: overseas investors are active in this segment of the market and BHP’s hostile bid for Canada’s Potash Corp has also helped. Refer to our review of  trading by sectors.

ASX News

An election outcome is still at least a week away. Investors do not like uncertainty and the Australian stock market has been trading lower as a result.

At the same time investors have had to digest another barrage of company reports. The reporting season has been mixed, but the key theme is that companies remain uncertain about the economic outlook for the rest of the year.

Our View

Markets have traded lower this week. Asian, European and US markets are all trading at or below their key support levels. In the US the Fed and GDP will be reporting tonight. Markets look set to trade down to their “flash crash” lows. The key driver will be the investor reaction to the slowing global economic growth. The earnings season has been mixed this week and the cautious company forecasts for future earnings have continued to weigh on investor sentiment. Investors need to concentrate on those companies that continue to grow their earnings with strong balance sheets.

The S&P ASX200 is currently trading at 4335, the lower third of the current trading range. The bear flag pattern mentioned last week resolved itself to the downside. The key support level on the ASX is still around 4,200 and the key levels for our index next week are 4450 and 4200, with pivot at 4300. The momentum is to the downside and the 4200 will be key for support near term.

by Michael Hevern
Head of Research

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Posted in ASX Trading News | No Comments

Stock Market Analysis: Markets Lower on Poor US Housing Data

Wednesday, August 25th, 2010

Stock Market Analysis

Markets Lower on Poor US Housing Data

U.S. markets fall sharply on the back of shocking home sales data.  European markets dropped sharply to 1-month lows.  The Australian market is set to follow overseas markets lower.

The SPI Futures is below the key level of 4400 the ASX is set to open sharply lower as the SPI Futures closed down -1.3% (or -57 pts) at 4,312. The key levels for our index today are 4400 and 4250. M&A activity continues to drive specific stocks. Expect to see our market trade sharply lower as investors continue to digest the ramifications of a hung parliament.Our company reporting season will continue to be in focus this week. Investors need to concentrate on those companies that continue to grow their earnings with strong balance sheets.

US Markets

The DOW dips briefly below 10,000 for the first time in 7-weeks, as the deluge of corporate deals failed to support the markets.  U.S. Stocks fell for a fourth day after another disappointing report on housing showed Existing Home Sales fell 27 percent last month, the lowest level in a 11 years.  One third of households are in negative equity. As the investors grow increasing concerned over the slowing economy and the possibility of a “double dip” recession, and we approach the second anniverary of the collapse of Lehman Brothers.  Three stocks fell for every one that rose on the NYSE.  All sectors fell but the Miners, Industrials and Healthcare were the worst, all down over 2 percent. The Dow closed down -1.3% (or -134 points) at 10,040, while in the broader market the S&P 500 index down -1.5% (or -15 points) at 1,052  and the tech-heavy Nasdaq ended down -1.7% (or -36 points) at 2,124.

European Markets

European stock markets closed sharply lower. European markets dropped to a 1-month low, led by miners and construction companies. In London miners led the falls with BHP and RIO down over 4 percent.   In London the FTSE 100 index closed down -1.5% (or -79 points) at 5,156, the German DAX down -1.3% (or -75 points) at 5,935, while in France the CAC was down -1.8% (or -66 points) at 3,491.

Asian Markets

Asian stocks ended lower.  Japan continues to underperform and is now at 15-month lows, as the Yen remains at 15-year highs impacting the export-driven economy.  Chinese markets drifted higher, on hopes the government will ease access to credit, led by real estate and steelmakers. There are also reports that chinese companies are looking at becoming involved in the Potash Corp takeover, this would impact BHP’s hostile bid.  In China the SSE Composite closed up 0.4% (or 11 points) at 2,650, while in Hong Kong the Hang Seng Index was down -1.1% (or -230 points) at 20,659 and in Japan the Nikkei 225 Index was down -1.3% (or -12155 points) at 8,995.

Commodities

The Dollar Index down marginally -0.2% at 82.96 still around six-week highs against the Euro, while the Australian Dollar last traded lower at 87.98. Commodities were generally lower.

Oil prices are below support. The benchmark crude NYMEX for September delivery was down -2.2% (or $US-1.64) to settle at $US71.46. Copper prices still are trading below 3-month highs, Copper for September delivery delivery was down -1.6% (or -5.2 cents) at $US3.2375. Gold prices are above key $US1,200 level, with December gold was up 0.4% at $US1,231.00.

Key News International Drivers Today

US – July Existing Home Sales fell 27 percent, the lowest in 11 years. GM has filed for a $US10 billion IPO. Companies continue to report earnings this week.
EU – ECB rumored to be considering further monetary easing.  German PMI report showing a decline in manufacturing to 56.1 in June.
CHINA – Hopes that the government will ease access to credit, rise led by real estate and steelmakers.  China  overtakes Japan as the world’s second largest economy.
JAPAN – Japan continues to under-perform at 15-month lows and the Yen at 15-year highs hurts. Companies continue to report earnings this week.

Markets Overview

Markets Lower on Poor US Housing Data

Market

Movement

The Dow Jones Industrial Average

Down -1.3% (or -134 pts)  at 10,040

The S&P 500

Down -1.5% (or -15 pts)  at 1,052

The Nasdaq

Down -1.7% (or -36 pts)  at 2,124



The FTSE 100

Down -1.5% (or -79 pts)  at 5,156

The German DAX

Down -1.3% (or -75 pts)  at 5,935

The Fench CAC

Down -1.8% (or -66 pts)  at 3,491



The Dollar Index

Down  Marginally -0.20% at 82.96

The Australian Dollar

Last traded at 87.98

The Commodities Index

Down -1.21% at 262.8



Crude Oil Futures

Down -2.2% at $71.46

Gold Futures

Up  Marginally 0.4% at $1,231.90

Copper Futures

Down -1.6% at $3.2375

SPI Futures

Down -1.3% (or -57 pts) at 4,312





Market

Movement

SSE Composite (China)

Up 0.4%  at 2,650

Hang Seng Index (Hong Kong)

Down -1.1%  at 20,659

Nikkei 225 Index (Japan)

Down -1.3%  at 8,995


SPI: Below key Level 4400 – SPI down 1.3% at 4,312….

ASX News Today

The SPI Futures is below the key level of 4400 the ASX is set to open sharply lower as the SPI Futures closed down -1.3% (or -57 pts) at 4,312. The key levels for our index today are 4400 and 4250. M&A activity continues to drive specific stocks. Expect to see our market trade sharply lower as investors continue to digest the ramifications of a hung parliment.Our company reporting season will continue to be in focus this week. Investors need to concentrate on those companies that continue to grow their earnings with strong balance sheets.

AVM- Takeover target Aevum has returned to profit and wants to expand further in the eastern states, and says it confirms the “inadequacy” of Stockland Group’s $266 million cash bid.

AWE- AWE the oil and gas producer, reported a FY10 net loss and a plunge in revenues due to lower production.

BHP- BHP report results tonight. Canada’s Potash Corporation, the world’s largest fertiliser maker, has formally rejected a hostile bid from mining giant BHP worth $US40 billion.

CHC- Charter Hall Group  the property fund manager and developer, has returned to full-year profit saying it is optimistic about the property outlook.

FGL- Foster’s Group says it remains on track for a possible demerger of its wine business and that benefits from restructuring will flow through in the next 12 months.

FLT- Flight Center the travel agency group, says net profit more than tripled in 2009/10 on record ticket sales and improved margins.

GPT- GPT Group the property developer, has recorded a net profit in 1H10, rebounding from the over $1 billion loss of a year earlier, and lifted its guidance for this calendar year.

MCC- Macarthur Coal is raising $429 million from institutional investors to acquire most of a contract miner that plans to buy a central Queensland coal tenement that could produce as much as Macarthur’s current output.

MGR – Mirvac the property developer and investor returned to profit and forecasts strong earnings growth as the residential and office markets continue to firm.

ORG- Origin Energy says a coalition government win following the federal election could affect the timing of a major project in Queensland.

OSH- Oil Search has reported 1H10 profit and revenues up 49 percent, driven by higher oil prices and increased sales, and has maintained its full year production guidance.

PPT- Perpetual to more than double its FY10 profit and dividend, with cash from op activities up 243% and flag that weary institutional investors are returning to the market.

SEK- Seek says its diversified earnings base and paradigm shift to online job advertising see it well placed for future earnings growth.

SVW- Seven Group Holdings is expected to meet earnings guidance for its Caterpillar dealership WesTrac when it reports today.

SHL- Sonic Healthcare the Pathologist and radiologist, posted a 71 percent rise in FY10 profit, and says it expects more growth this year.

SPH- Sphere Minerals the iron ore junior has a friendly takeover at $2.50/share from Swiss mining giant XstrataWHC – Whitehaven Coal’s FY10 profit fell 53% as lower coal prices hit revenue down 16%.

Economic Reports :

ABS – Releases data on construction work done in the June quarter.
Negotiations to resolve hung parliament

Companies:

APA – APA Group Full year 2010 Results
AIO – Asciano Group Full year 2010 Results
BHP – BHP Billiton Limited Full year 2010 Preliminary results
EHL – Emeco Holdings Ltd Full year 2010 Results
HST – Hastie Group Ltd Full year 2010 Results
MAP – MAP Airports International Ltd Interim 2010 Results
OZL – OZ Minerals Interim 2010 Results
PBG – Pacific Brands Ltd Full year 2010 Results
ROC – Roc Oil Ltd Interim 2010 Results
SUN – Suncorp-Metway Limited Full year 2010 Results
TTS – Tassal Group Full year 2010 Preliminary results
WOR – WorleyParsons Ltd  Full year 2010 Results
WTF – Wotif com Holdings Ltd Full year 2010 Result

Dividends:

ABC – Adelaide Brighton Ltd Special ex-dividend date (seen 0.02500)
ABC – Adelaide Brighton Ltd Interim 2010 Ex-dividend date (seen 0.07500)

Expect to see our market trade sharply lower today, as focus remains on the ramification of a hung parliament.  Our earnings season continues.

Market Summary

ASX – to open sharply lower
US & UK/Europe – Lower

US ADRs –  Sharply Lower!!!…

BHP down 2.6% &

RIO down 5.7%;

AWC down 4.1%

ANZ down 3.1% &

NAB down 3.4%

NEM down 0.8%,

JHX down 2.7%,

NWS down 1.9%

Commodities Stock Index down 1.9%
Gold Stocks Index down 1.2%
Oil Stocks Index down 1.7%

By Michael Hevern
Head of Research

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Posted in Morning Wrap, Stock Market Analysis | No Comments

Stock Market Analysis: Weekly Market Wrap

Friday, August 13th, 2010

Weekly Market Wrap – Faltering World Economies

Investors have spent the week de-risking their portfolios, pricing in slower economic growth into their investment outlook. This week, Australian shares have taken a hit from poor earnings reports from key bellwethers, while overseas poor economic data continued to weigh on European, U.S. and Asian markets, sending investors out of growth and risk sensitive assets. In the U.S. high unemployment persists and the Fed confirmed that uncertain times will continue for the foreseeable future. Asian markets reported further data confirming their recovery is slowing. European markets are suffering from the austerity measures that were implemented earlier this year. Central banks have all left their rates on hold and have downgraded their view of the prospects for economic growth near term.

US Markets

US stocks traded lower this week, as investors sold-off on the back of sobering comments from the Fed (“unusually uncertain” economy), high unemployment (at 9.5 percent) and a widening trade deficit. Data also showed a decline in consumer credit amid increased saving by American households, which is an issue as consumer spending makes up 70% of economic activity. The U.S. markets dropped the most in 6 weeks, with all major markets down over 3.5 percent for the week, however trading volumes continue to be light. The sell-off was broad-based with the Energy, Materials, Financial and Industrial sectors all well down. Overnight The CBOE Volatility Index known as the “market fear gauge” has been rising to 25.7, reflecting the investor concern and that they are expecting more drops in stocks. The Dow closed down -0.6% at 10,320, while in the broader market the S&P 500 index was down -0.5% at 1,084 and the tech-heavy Nasdaq ended down -0.8% at 2,190.

European Markets

European stock markets closed lower this week on concerns that economic data is confirming faltering economic growth. Industrial production in the EU unexpectedly fell in June as a result of declines in output from France and Germany, according to data from the EU Eurostat statistics office. Sovereign debt concerns resurfaced as the European Central Bank (ECB) reportedly had to purchase short-dated Irish government bonds, in an attempt to calm market volatility stemming from concerns of the creditworthiness of Irish banks. Across in Greece the economy contracted sharply (1.5%) in the second quarter as government austerity measures savaged incomes. The U.K. housing-market gauge signaled the first monthly decline in prices for a year and the Bank of England (BoE) downgraded growth forecasts.

German June trade figures showed a sharp pick-up in imports, which helped German stocks test 2-year highs, but it has finished for the week lower. Overnight in London the FTSE 100 index closed up 0.3% at 5,263, the German DAX down -0.3% at 6,135, while in France the CAC was down marginally -0.1% at 3,621.

Asian Markets

Asian markets fell this week. The Japanese export-driven economy was hit by the Yen reaching 15 year highs. Hong Kong’s GDP slowed more than expected last quarter at 6.3 percent (versus estimates of 8.2 percent), this weighed on the index. Chinese investors also continued selling amid concerns over slowing growth. China’s imports rose 22.7 per cent in July, sharply slower than June’s 34.1 per cent increase. The data showed that Chinese import growth slowed for a fourth consecutive month raising concerns that slowing Chinese growth will impact the global recovery, as its internal economic growth could decelerate amid a government engineered slowdown in investment and consumption. Overnight in China the SSE Composite closed down -1.2% at 2,575, while in Hong Kong the Hang Seng Index was down -0.9% at 21,106 and in Japan the Nikkei 225 Index was down -0.9% at 9,213.

Commodities

The US dollar advanced this week due to rising fears of a global economic slowdown, which weighed on the euro and increased the appeal of the U.S. currency as a flight to safety. This put pressure on commodities prices. Wheat prices continued to be a highlight, though they have pulled backed off 2-year highs. Oil prices fell as a weakening outlook on the economic recovery stoked fears of dropping oil demand. Overnight the benchmark crude NYMEX for September delivery was down -2.9% to settle at $US75.80; Copper prices have backed off 3-month highs, Copper for September delivery was up 0.9% at $US3.272 a pound; Gold prices rose above the key $US1,200 psychological level, with December gold up 1.4% at $US1,215.30.

ASX News

The election is only a week away, and both parties are yet to fully inform voters of their final set of promises. The Australian stock market has suffered this week from the negative leads from overseas markets, while commodities have generally pulled back.

Our company reporting season has also weighed on the markets with many bellwethers such as James Hardie, Tabcorp, Telstra and Computershare disappointing. Other companies like CommBank, JB Hi-Fi and Bendigo Bank are still performing well.

Our View
Markets have sold-off this week, as investors come to the realisation that the outlook of slowing global economic growth is a reality. The earnings season has weighed on the Australian shares and the cautious company forecasts for future earnings has weighed on investor sentiment. Investors need to concentrate on those companies that continue to grow their earnings with strong balance sheets.

The S&P ASX200 is currently trading at 4410, the mid-level of the current trading range. The key support level on the ASX is still around 4,200 and the key levels for our index next week are 4500 and 4250, with pivot at 4400. The momentum is to the downside but the 4200 will be key for support near term.

By Michael Hevern
Head of Research

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Posted in Stock Market Analysis, Trader Dealer News | No Comments

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