Posts Tagged ‘trading’

Stock Market Analysis: Markets Drifting Up Into Key Levels

Friday, February 3rd, 2012

* US stock markets eased overnight, as traders digested mixed earnings reports and showed caution ahead of the US Non-Farm payolls report due out tonight. Â
* European stock markets edged higher overnight, as the European Stoxx 600 index held at 6-month highs.
* Asian stock markets were broadly higher yesterday, led by commodity and financial stocks.
* Commodities prices traded mixed, as Gold prices higher to around $US1,760  and while crude-oil closed down around $US96.
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The SPI Futures is trading above the key pivot level of 4180, ending flat at 4,240. The key levels for our index today are 4180 to 4230.

Yesterday Aussie shares played catchup with their overseas counterparts, but today traders should be looking to protect recent profits, as investors wait for some conclusive news on the Greek debt talks and the US monthly employment figures due out tonight.  We had generally positive leads from the US and European markets overnight.Â
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See below for ASX listed companies in the news today.

US Markets

US stock markets eased overnight, as traders digested mixed earnings reports and showed caution ahead of the US Non-Farm payolls report due out tonight.  

The Dow industrials finished down for the seventh time in past 9 sessions.  In the broader markets the S&P 500 ended flat, while the tech-heavy Nasdaq edged higher and continues to outperform, jumping 9.8% this year, trading at six-month highs.  

Federal Reserve Chairman Ben Bernanke addressed US lawmakers overnight, describing the pace of the US economic recovery as “frustratingly slow” and warned of the importance of addressing the US’s fiscal challenges highlighting the eurozone sovereign-debt crisis as an example of out-of-control fiscal policies. Bernanke fell short of reaffirming a QE3 package.  

In corporate news big-pharma sold down after Merck reported 4Q revenue that were below expectations.  A number of retailers were hammered after Abercrombie & Fitch plunged -11%, after the apparel retailer said that fiscal 4Q earnings would fall well short of expectations. Another retailer, Ann, plunged -8.5% after saying its fiscal 4Q results would be below expectations as well. On the flip side, MasterCard rose 6.7% after increased card spending helped the company turn in core earnings ahead of expectations.  

Commodities were generally weak with crude-oil down on falling US demand and increases in supplies and copper retraced, but gold continues its rise on the back of eurozone debt concerns.

The ten company groups that make up the S&P index traded mixed with Materials down -0.5%, Energy up 0.8%, Financials up 0.5%, Industrials up 0.1%, Technology up 0.3%, while Consumer Staples were down -0.1%.

The Dow Jones closed down -0.1 % (or -11 points) at 12,705, the S&P 500 index was up 0.1% (or 1 point) at 1,325, the Nasdaq ended up 0.4% (or 11 points) at 2,860 and the smaller cap Russell 2000 was up 0.4%.

European Markets

European stock markets edged higher overnight, as the European Stoxx 600 index closed 0.2% higher, holding at 6-month highs.  

Traders pushed share prices higher after US data showed productivity was up 0.7% in the fourth quarter of 2011 and initial jobless claims were down 12,000. Sentiment was also helped by successful bond auctions with the Spanish Treasury selling nearly EUR4.6 billion of government debt with borrowing costs declining, while France successfully sold EUR7.96 billion of government debt.  However investors continued to await a conclusion to talks between Greece and its private-sector creditors.

Mining stocks were in focus after Xstrata PLC (up 10%) confirmed it is in merger talks with Glencore International PLC (up 7%), while Vedanta Resources PLC gained 5.8% and Rio Tinto PLC rose 1.8%. Energy stocks weighed on the back of lower crude-oil prices.

In London the FTSE 100 index closed up 0.1% (or 5 points) at 5,796, the German DAX was up 0.6% (or 39 points) at 6,655 while in France the CAC was up 0.3% (or 9 points) at 3,376. Spain was up 0.8% and Italy ended up 0.1%.

Asian Markets

Asian stock markets were broadly higher yesterday, led by commodity and financial stocks after an improvement in manufacturing data buoyed global sentiment.  

Across the region commodity stocks were higher as positive manufacturing data is seen as a positive for global growth.  Financials also pushed markets higher.  It was “risk on” and the Chinese and Hong Kong markets surged 2% for the session. 

In China the SSE Composite was closed up 1.9% at 2,313, while in Hong Kong the Hang Seng Index was up 2.0% at 20,739 and in Japan the Nikkei 225 Index closed up 0.8% (or 67 points) at 8,877. The South Korean KOSPI was up 1.3% for the session, while the Indian market up 0.8%.

Commodities

The Dollar Index was higher at 78.99 on a higher Euro, while the Australian Dollar last traded higher at 1.0713. Commodities prices traded generally lower.

For the session the benchmark crude NYMEX was down -1.1% (or -$US1.03) settle at $US96.58.  Copper prices are seeking a support level as Copper was down -1.4% (or -5.3 cents) at $US3.7855.  Gold was up 0.6% (or $US9.70) at $US1,759. 

ASX News Today

BHP – BHP Billiton has committed $US779 million to a port project that could increase its WA iron ore exports by 100 million tonnes each year.

BLD – Boral the building materials maker has sold its Indonesian business for $US135 million ($A127.87 million) and confirmed its previous expectations for its half-year profit.

ERA – Energy Resources Australia has posted a $153.6 million loss for 2011 and says production is still having problems with wet weather.

FXJ – Australia’s richest person Gina Rinehart has increased her stake in Fairfax by an estimated 10 percent, at a 10% premium.

LYC – Lynas, the rare earths miner, received a temporary license for its rare earths refinery in Malaysia and says it has a responsibility to the Malaysian community to operate a newly-approved plant in a safe manner.

PMP – PMP, the publisher and direct marketer, has cut its earnings guidance and implemented further restructuring due to poor trading conditions and weaker printing orders.

RIO – Rio Tinto has reported its 40-year-old aluminium smelter at Tiwai Point, near Bluff, had its biggest production year ever in 2011.

STO – Santos says its Wortel operation in Indonesia has produced its first gas, the fourth project in the company’s base business to begin output in the past eight months.

WES – Wesfarmers says Coles had its best ever Christmas sales in 2011, which contributed to a 7.3 percent rise in first half sales to $17.5 billion.

Ex-dividend Date

None

Market Summary 

ASX – to open higher
US & UK/Europe – higher
Commodities Stock Index  up 0.8%
Gold Stocks Index up 1.3%
Oil Stocks Index up 0.4% 

US ADRs – Broadly Higher

BHP up 0.6%,  RIO up 1.5%; AWC up 0.4%
ANZ up 2.1% & NAB up 0.5%
NEM   down -1.9%, JHX up 2.4%, NWS  down -1.2%

By Michael Hevern
Head of Research

For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

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Stock Market Analysis: Traders Cheer Improving Global Manufacturing Figures

Thursday, February 2nd, 2012

* US stock markets jumped overnight and are approaching multi-year highs, as traders cheered improving worldwide manufacturing reports.
* European stock markets jumped higher overnight, as financials and energy stocks pushed indices higher on the back of improving manufacturing data.Â
* Asian stock markets ended mixed yesterday, but are likely to play catch-up today.
* Commodities prices traded mixed, as Gold prices rose higher to around $US1,744. Crude-oil closed down around $US97.

The SPI Futures is trading above the key pivot level of 4180, ending up 1.3% (or 55 points) at 4,248. The key levels for our index today are 4200 to 4280.

Yesterday Aussie shares sold down, led by the miners and financials, as investors waited for news on European debt talks, and stocks traded cautiously ahead of the Chinese PMI figures, which beat expectations.

Aussie shares are expected to jump today and traders will be looking to play catch up with positive leads from the US and European markets.

See below for ASX listed companies in the news today.

Economics News Today

* Dec     Building Approvals
* Dec     International Trade in Goods & Services

US Markets

US stock markets jumped overnight, approaching multi-year highs, as traders cheered improving worldwide manufacturing reports.  

The three major indices continued to rise after posting their best January performance in 15 years. All 10 S&P 500 sectors traded in the green, with the gains led by financial and industrial stocks, while technology stocks shook off the disappointing results from Amazon.  

Economic news buoyed sentiment after weekly jobs data showed US employment ahead of the monthly Non-farms employment report due out Friday.  Manufacturing figures improved globally, and a reading on US manufacturing came in at 54.1 for January (up from 53.1).

Facebook has announced its IPO to the tune of $5 billion through Morgan Stanley; the company made $1 billion in profit with revenue of $3.7 billion last year.

All ten company groups that make up the S&P index traded mixed with Materials up 1.0%, Energy up 0.4%, Financials up 1.6%,  Industrials up 1.1%, Technology up 1.0%, while Consumer Staples were up 0.4%.

The Dow Jones closed up 1.0% (or 125 points) at 12,757, the S&P 500 index up 1.2% (or 16 points) at 1,327, the Nasdaq ended up 1.2% (or 34 points) at 2,848 and the smaller cap Russell 2000 was up 1.9%.

European Markets

European stock markets jumped higher overnight, as financials and energy stocks pushed indices higher on the back of improving manufacturing data.  The Stoxx 600 index closed at a six-month high, up 2%.  

Investors cheered improving manufacturing data from China, Germany, the U.K. and the eurozone which came in slightly better than expected (but with the exception of London and China the figures were below the key 50 level which signifies expansion).

Financials performed well, with Italian banks surging after yields on 10-year Italian government bonds fell 22 basis points to 5.64%.  Growth-sensitive stocks performed well as commodities prices rose with gold, silver, copper and aluminium prices all higher, boosting the mining sector to solid gains.  The news on manufacturing figures sparked buying.  

European shares continued higher after data showed that the ISM manufacturing index climbed to 54.1% in January.  Additionally manufacturing data from Germany, the U.K. and the eurozone all boosted sentiment as the German PMI rose to 51.0 in January (up from 48.4), while eurozone PMI rose to 48.8 in January (above estimates of 48.7), while in London the UK PMI hit an eight-month high of 52.1 in January (up from 49.7).

In London the FTSE 100 index closed up 1.9% (or 109 points) at 5,790, the German DAX was up 2.4% (or 158 points) at 6,616, while in France the CAC was  up 2.1% (or 69 points) at 3,368. Spain was up 2.2% and Italy ended up 2.7%.

Asian Markets

Asian stock markets ended mixed yesterday, but are likely to play catch-up today.  

In China the Shanghai Composite Index underperformed down over 1%, despite Chinese manufacturing activity figures coming in better-than-expected, as this raised concerns that the government may not need to immediately ease its monetary policy. The Chinese official Purchasing Managers Index (PMI) was reported at 50.5 in January, up from 50.3 in December (above expectations of a drop to 49.5). The 50 level that delineates expansion and contraction.

The news prompted traders to sell-down resource and property stocks which finished broadly lower.  Elsewhere Japan, South Korea and Hong Kong finished flat.

In China the SSE Composite was down -1.1% at 2,268, while in Hong Kong the Hang Seng Index was down -0.3% at 20,333 and in Japan the Nikkei 225 Index closed up 0.1% (or 7 points) at 8,809. The South Korean KOSPI was up 0.2% for the session, while the Indian market up 0.6%.

Commodities

The Dollar Index was higher at 78.91 on a higher Euro, while the Australian Dollar last traded higher at 1.0711. Commodities prices traded generally higher.

For the session the benchmark crude NYMEX was down -1.2% (or -$US1.13) settle at $US97.35. Copper prices are seeking a support level as Copper was up 1.4% (or 5.1 cents) at $US3.8300.  Gold was up 0.4% (or $US6.40) at $US1,744.

ASX News Today

BLD – Boral, the building materials maker, has sold its Indonesian business for $US135 million ($A127.87 million) and confirmed its previous expectations for its half-year profit.

ERA – Energy Resources Australia has posted a $153.6 million loss for 2011 and says production is still having problems with wet weather.

FXJ – Australia’s richest person Gina Rinehart has increased her stake in Fairfax by an estimated 10 percent, at a 10% premium.

QAN – Qantas says it is in a strong financial position despite having its credit rating downgraded by Moody’s ratings agency.

STO – Santos says its Wortel operation in Indonesia has produced its first gas, the fourth project in the company’s base business to begin output in the past eight months.

WES – Wesfarmers says Coles had its best ever Christmas sales in 2011, which contributed to a 7.3 percent rise in first half sales to $17.5 billion.

Market Summary 

ASX – to open higher
US & UK/Europe – higher
Commodities Stock Index  up 0.6%
Gold Stocks Index up 0.1%
Oil Stocks Index up 0.3% 

US ADRs – Broadly Higher

BHP up 1.3%,  RIO up 2.0%; AWC up 0.7%
ANZ up 1.4% & NAB up 1.1%
NEM   down -0.6%, JHX up 0.5%, NWS  up 1.9%

By Michael Hevern
Head of Research

For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

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Stock Market Analysis: Market Caution Remains Due to Greek Bond Standoff

Tuesday, January 31st, 2012

* US stock markets have recovered from an early sell-off ending modestly lower for the session.
* European stock markets fell overnight as investors grew increasingly concerned about the lack of a Greek debt-restructuring deal.
* Asian markets fell yesterday as investors were cautious ahead of a key summit of European leaders later in the day and Chinese PMI out Wednesday.
* Commodities prices traded mostly lower, as Gold prices dropped to around $US1,730, while crude-oil closed up around $US99.

The SPI Futures is trading above the key pivot level of 4180, ended down -0.2% (or -7 points) at 4,238. The key levels for our index today are 4180 to 4230.

Last week the Australian share market ended up for a fourth consecutive week, with shares up around 5.5 percent so far in 2012.

Yesterday Aussie shares fell, led down by the financials, as investors waited for news on Europe debt talks.

Aussie shares are expected to ease today and traders are should be looking to protect recent profits, after weaker leads again from the US and European markets.

See below for ASX listed companies in the news today.

Economics News Today

*  Dec     Financial Aggregates, including Private Sector Credit�
*  Dec     NAB Business Survey�
*  Dec     International Reserves & Foreign Currency Liquidity.

US Markets

US stock markets have recovered from an early sell-off ending modestly lower for the session. Traders are showing concern that the standoff between Greece and its private creditors is still not resolved, as well as an alarming surge in Portugal’s borrowing costs.

Financial companies led stocks lower as investors remain wary of the potential for Europe’s debt issues to spread causing contagion across the global financial system. Eight of 10 sectors on the S&P 500 finished in the red for the session, with the only exceptions being the telecommunication and technology sectors. Trading volumes were down as fund managers are looking to hold on to their January profits as the month end nears.

The ten company groups that make up the S&P index traded mixed with Materials down -0.2%, Financials down -0.9%, Energy down -0.5%, Industrials down -0.4%, Technology up 0.3%, while Consumer Staples were down -0.3%.

The Dow Jones closed down -0.1% (or -6 points) at 12,654, the S&P 500 index down -0.3%  (or -3 points) at 1,313, the Nasdaq ended down -0.2% (or -5 points) at 2,811 and the smaller cap Russell 2000 was down -0.6%.

European Markets

European stock markets fell overnight as investors grew increasingly concerned about the lack of a Greek debt-restructuring deal. The Stoxx Europe 600 Index closed down -1.1%.  All the key markets were down over -1% for the session.

Across the region the financials led the sell-down with the Stoxx Europe 600 Index Banking sector closing down -3.1%. Investors were worried due to Friday’s Fitch ratings agency downgrade of Italy, Spain, Belgium, Slovenia and Cyprus and cut its outlook in Ireland. 

Investors are concerned over the Greek debt negotiation and are now shifting their attention to Portugal, which could be the next in line for a bailout after their borrowing costs surged with the 10-year government bond yield reaching euro-era highs, with the 10-year Portuguese government bond yield at 17.39%.

The meeting of the European Union leader’s summit is underway in Brussels. It aims to endorse a permanent bailout fund with a lending capacity of EUR500 billion, and to finish details of a “fiscal pact” aiming at budget deficits.  There is some good news as all European Union countries, except Britain and the Czech Republic, have agreed to sign a new treaty designed to stop overspending in the eurozone and put an end to the bloc’s disastrous debt crisis, while also pledging to stimulate growth across the region.  The eurozone’s 17 nations hope that the tighter rules will convince investors that all countries will get their debts under control and restore confidence in their joint currency.

In London the FTSE 100 index closed down -1.1% (or -62 points) at 5672, the German DAX was down -1.1% (or -67 points) at 6,444 while in France the CAC was down -1.6% (or -53 points) at 3,265. Spain was down -1.6% and Italy ended down -1.2%.

Asian Markets

Asian stock markets fell yesterday as investors were cautious ahead of a key summit of European leaders later in the day and Chinese PMI out Wednesday.  Japanese stocks closed lower.

Chinese traders returned in a sombre mood and sold down stocks, due to disappointment over a lack of policy easing from the government. The Hong Kong market was also lower, as shares of developers and Chinese banks fell sharply on fears over the property sector’s outlook in the absence of any policy easing. The Taiwanese market bucked the trend, rising sharply as the market returned after a long Lunar New Year holiday. 

In China the SSE Composite closed down -1.5% at 2,285, while in Hong Kong the Hang Seng Index was up -1.7% at 20,160 and in Japan the Nikkei 225 Index closed down -0.5% (or -48 points) at 8,793, while the Indian market was down 2.2%.

Commodities

The Dollar Index was lower at 78.36 on a higher Euro, while the Australian Dollar last traded higher at 1.0667. Commodities prices traded lower.

For the session the benchmark crude NYMEX for January delivery was down -0.6% (or -$US0.63) to settle at $US98.93.  Copper prices are seeking a support level as Copper for January delivery was down -1.6% (or -6.4 cents) at $US3.8263.  January gold was down -0.1% (or -$US1.70) at $US1,730.

ASX News Today

GGP – Golden Gate Petroleum, with a market cap of just $44 million, says it no longer needs to raise further capital and is forecasting Golden Gate will produce close to 1000 barrels of oil a day, in the next 9 months.

OST – OneSteel will receive $64 million to help it prepare for the introduction of the federal government’s carbon tax in July.

ROC – ROC Oil lifted production in the December quarter, but for the year it was down.  4Q production increased by 7 percent on the previous quarter to 708,675 barrels of crude oil, bringing full-year total to 2.73 million barrels of oil equivalent, compared to 3.1 mmboe in 2010.

WES – Wesfarmers to release second-quarter sales figures on Thursday.

WOW – Woolworths, Australia’s biggest supermarket chain, releases second-quarter sales figures today.  Woolworths has appointed Christine Cross, David Mackay and Michael Ullmer as non-executive directors.

Ex-dividend Date

None

Market Summary 

ASX – to open lower
US & UK/Europe – lower
Commodities Stock Index  down -0.5%
Gold Stocks Index down -1.3%
Oil Stocks Index down -0.1% 

US ADRs – Broadly Lower

BHP down -0.9% & RIO down -0.2%; AWC down -1.1%
ANZ down -0.9% & NAB down -1.4%
NEM   down -0.5%, JHX down -2.3%, NWS  up 0.3%

By Michael Hevern
Head of Research

For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

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Stock Market Analysis: Markets Ease – Still No Greek Resolution

Monday, January 30th, 2012

* US stock markets ended mixed on Friday, after the GDP figures disappointed.
* European stock markets eased back from 5-month highs Friday, as the Stoxx Europe 600 fell -1%.
* Many Asian stock markets were closed for the Lunar New Year holidays.
* Commodities prices traded lower, as Gold prices were around $US1,738. Crude-oil closed around $US98.

The SPI Futures is trading below the key pivot level of 4180, ending up 0.6% (or 26 points) at 4,148. The key levels for our index this week are 4080 to 4250.

Aussie shares are expected to ease and traders are expected to join their overseas counterparts in protecting their profits today, after negative leads from the US and European markets.

See below for ASX listed companies in the news today.

US Markets

US stock markets ended mixed on Friday, after the GDP figures disappointed.  The Dow Jones Industrial Average ended up 3.6% YTD, while for the week, the S&P and the Nasdaq ended in positive territory for the fourth week in a row.  The materials and health care sectors led the S&P, while utilities and consumer staples lagged.

In economic news US gross domestic product (GDP), the value of all goods and services produced, expanded at an annual rate of 2.8% from the final quater of 2011, which was below expectations. However the GDP figures are confirming the US economy expanded at the fastest pace since the second quarter of 2010.  US growth is expected to slow in the first half of 2012 which tempered trader enthusiasm.

In corporate news, Facebook could file as early as next week for an initial public offering that would raise $10 billion and value the company at $75 billion to $100 billion.  The Nasdaq CEO said that this market has the biggest number of IPO applications in a decade, which is a positive for investor sentiment.

This week earnings continue, and the monthly jobs figures will be released Friday night.

All ten company groups that make up the S&P index traded mixed with Materials up 0.1%, Financials down -0.4%, Energy down -0.2%, Industrials down -0.1%, Technology was flat, while Consumer Staples were down -0.7%.

European Markets

European stock markets eased back from 5-month highs Friday, as the Stoxx Europe 600 fell -1%.  Stocks eased as the Fitch Ratings Agency downgraded the sovereign credit ratings for Spain, Belgium and Italy.  Greece is still said to be close to closing its debt restructuring deal with private creditors.

The German market was up again for the week and is up 7.6% YTD, and in France the CAC-40 has risen 5.2% YTD, while in London YTD the FTSE 100 is up 2.9%.

This week investors will be watching for the outcome of the EU summit meeting to be held next week.

In London the FTSE 100 index closed down -1.1% (or -62 points) at 5733, the German DAX was up 1.8% (or 118 points) at 6,539 while in France the CAC was down -1.3% (or -1.3 points) at 3,319. Spain was down -0.7% and Italy ended down -1.0%.

Asian Markets

Many Asian stock markets were closed for the Lunar New Year holidays.  Across the region the resource sector led markets higher as buyers as trading resumed after a break.

Investors cheered the Federal Reserve announcement that benchmark US interest rates will likely remain at ultra-low levels until 2014, and commodities prices rose on the news. Much of the buying in the region was led by resource and banking stocks.   However traders remain cautious over the Greek debt restructuring talks and mixed earnings reports.

In Japan shares were hurt by poor earnings reports from Nintendo and NEC, while Hong Kong stocks rose as the Hang Seng Index was up for a sixth straight day, with gains led by banking and telecommunication shares.

In China the SSE Composite was closed at 2,319, while in Hong Kong the Hang Seng Index was up 0.3% at 20,501 and in Japan the Nikkei 225 Index closed down -0.1% (or -8 points) at 8,841. The South Korean KOSPI was up 0.4% for the session, while the Indian market up 0.5%.

Commodities

The Dollar Index was lower at 78.36 on a higher Euro, while the Australian Dollar last traded higher at 1.0667. Commodities prices traded lower.

For the session the benchmark crude NYMEX for January delivery was down -0.1% (or -$US0.14) to settle at $US99.76.  Copper prices are seeking a support level as Copper for January delivery was down -0.3% (or -1.3 cents) at $US3.8855.  January gold was up 0.3% (or $US5.50) at $US1,738.

ASX News Today

AGO – Atlas Iron managing director David Flanagan said Atlas is not for sale, but delivered downgraded production and export results for the December quarter and has cut its production targets for the financial year, because of the impact of Tropical Cyclone Heidi.

ALS – Alesco Corporation, the building products distributor has more than tripled its first half profit but says trading conditions are tough.

CPA – Commonwealth Property Office Fund expects its first-half profit to grow and has boosted its forecasts for distributions.

EPW – ERM Power has received the go-ahead to build a $500 million gas-fired power station west of Brisbane.

LYC – Lynas Corp is back, surging another 5% after reporting it has secured enough funds ($US225 million in unsecured convertible bonds) to complete construction and start-up of its delayed rare earths processing plant in Malaysia.

RMD -  Resmed the US-based sleep disorder specialist reported a better than expected profit result in the quarter of last year as profit dropped modestly for the first half of this financial year (July to December 2011) to US$113.4 million.

TOL – Toll Holdings is facing union action in Los Angeles as truck drivers who accuse their Australian employer of treating them like “second-class citizens”, have announced plans to hold union elections at their workplace.

WHC – Whitehaven Coal has increased production by two per cent in the December quarter, but sales have fallen.

WPL – Woodside Petroleum denies it is looking to sell a major part of its stake in the proposed Browse basin liquified natural gas (LNG) project.

Market Summary

ASX – to open flat
US & UK/Europe – lower
Commodities Stock Index  up 0.5%
Gold Stocks Index up 1.9%
Oil Stocks Index down -0.8% 

US ADRs – Broadly Lower

BHP down -0.3% & RIO down -1.0%; AWC up 0.4%
ANZ down -0.2% & NAB down -1.1%
NEM  up 1.8%, JHX down -1.4%, NWS  up 0.1%

By Michael Hevern
Head of Research

For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

Written on 30 January, 7:15am

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Stock Market Analysis: Aussie Market To Play Catch-up

Friday, January 27th, 2012

* US stock markets drift higher to levels not seen since mid last year.
* European stock markets climbed to 5-month highs overnight, as the US Federal Reserve said it would keep U.S. interest rates low until at least 2014.
* Many Asian stock markets are closed for the Lunar New Year holidays.
* Commodities prices traded mostly lower, as Gold prices lower to around $US1,668 and while crude-oil closed up around $US100.

The SPI Futures is trading above the key pivot level of 4180, ended down -0.3% (or -11 points) at 4,240. The key levels for our index today are 4150 to 4230.

The Australian share market continued to melt-up Wednesday, led by strong moves in the financials sector.  Investors remain optimistic, even though the negotiations over the Greek bailout have not been concluded and the US Fed reserve meet tonight.  Locally the case for a rate cut when the RBA board meets on 7th February, has been boosted by today’s CPI reading and some internet jobs figures.  The ABS reported that inflation was unchanged for the December quarter, following a 0.6 per cent rise in the third quarter of 2011. Seasonally adjusted CPI rose 0.2 per cent in the December quarter, and was up 3.0 per cent in the 12 months to December.  This is the reading is the lowest since the final three months of 2008 at the height of the GFC. In other news the Westpac-Melbourne Institute Leading Indexes of Economic Activity forecast a modestly lower pace of economic activity in the next 3 to 9 months, as the index fell -0.2 percent in November, following a rise of 0.1 percent in October.  The Department of Education, Employment and Workplace Relations internet vacancy index fell by 3 per cent in December, was 84.1 points, 8.7 percent, lower in seasonally adjusted terms than in December 2010.  Shares in the All Ordinaries (XAO) traded higher today, closing up 1.0% at 4329, as the S&P/ASX 200 (XJO) closed up 1.1% at 4271.

Aussie shares are expected to play catch up today and traders are expected to continue to look for bargains today, after positive leads from the US and European markets.�

See below for ASX listed companies in the news today.

US Markets

US stock markats eased after an initial surge.  Investors had cheered the Federal Reserve’s pledge to hold down interest rates till 2014. 
 
The Dow Jones Industrial Average reached its highest level since May 2008 holding around 12,700, while in the broader market the S&P 500 held above 1300 and the Nasdaq outperformed aroud 2800. 
 
Profit takers stepped in after some disappointing economic data and corporate earnings reports.  Selling began after data showed sales of new homes unexpectedly fell 2.2% in December (versus expectation of a rise of 1.9%) and also the Conference Board’s leading economic index rose 0.4% in December (below estimates of a 0.7% rise).   In corporate news AT&T, E*Trade Financial, SanDisk, Logitech International and Colgate-Palmolive earnings disappointed.
 
However there was positive news with weekly jobless claims coming in-line with expectations, rising 21,000 to 377,000 and orders for long-lasting goods surging 3% in December (above estimates of 2%).  
 
All ten company groups that make up the S&P index traded down with the Materials down -0.2% , Financials sector down -1.0%, Energy sector was down -1.3%, Industrials sector was down -0.2%, Technology was down -0.8%,  while  Consumer Staples were down -0.6%.
 
The Dow Jones closed down -0.2% (or -22 points) at 12,734, the S&P 500 index down -0.6%  (or -8 points) at 1,318, the Nasdaq ended down -0.5% (or -13 points) at 2,805 and the smaller cap Russell 2000 was down -0.3%.

European Markets

European stock markets climbed to 5-month highs overnight, as the US Federal Reserve said it would keep U.S. interest rates low until at least 2014.  The Stoxx 600 index gained 1.1%. 
 
Across the region banking and mining shares performed well in the back of the news from th US Fed.  Italian banck jumped over 5% and in  London banks rose around the same.  Resource stock surged with Kazakhmys up 7.8%, Rio Tinto rose 4.8% and Fresnillo was up 3.1%. 
 
Investors are still awaiting for news of progress in negotiations between Greece and its private creditors, as the parties resumed talks over the det crisis.  The Greek market jumped 4.4%, outperforming the rest of the eurozone, while the Italian market rose as the government sold EUR5 billion of 2-year debt at lower borrowing costs.
 
In London the FTSE 100 index closed up 1.2% (or 70 points) at 5793, the German DAX was up 1.8% (or 118 points) at 6,539 while in France the CAC was  up 1.5% (or 50 points)  at 3,363, Spain was up 1.2% and Italy ended up 1.2%.

Asian Markets

Many Asian stock markets are closed for the Lunar New Year holidays. 

Hong Kong stocks jumped though, as traders returned from a long Lunar New Year holiday to celebrate the Federal Reserve’s projection of ultra-low interest rates through late 2014. Japanese shares eased from a near three-month high as investors did some profit-taking, paricularly in the exporters, while in South Korea the Kospi eased on weaker-than-expected economic growth data.

In China the SSE Composite was closed at 2,319, while in Hong Kong the Hang Seng Index was up 1.6% at 20,439 and in Japan the Nikkei 225 Index closed down -0.4% (or -34 points) at 8,850, South Korean KOSPI was up 0.2% for the session, while the Indian market up 0.5%.

Commodities

The Dollar Index was lower  at 79.41 on a higher Euro, while the Australian Dollar last traded higher at 1.0622. Commodities prices traded lhigher.

For the session the Benchmark crude NYMEX for January delivery was up 0.3% (or $US0.39) settle at $US99.79.  Copper prices are seeking a support level as Copper for January delivery was up 1.5% (or 6 cents) at $US3.8805.  January gold was dowup 1.6% (or $US26.50) at $US1,729.

ASX News Today

 
AIO – Asciano has restructured its Patrick ports division, resulting in a significant reshuffle of its executive team.
AGO – Atlas Iron managing director David Flanagan delivered downgraded production and export results for the December quarter and has cut its production targets for the financial year because of the impact of Tropical Cyclone Heidi, the MD Mr Flanagan says he is committed to building Atlas into an iron ore force in its own right.
ALS – Alesco Corporation  the building products distributor has more than tripled its first half profit but says trading conditions are tough and will continue to be so.
CPA – Commonwealth Property Office Fund expects its first-half profit to grow and has boosted its forecasts for distributions.
EPW – ERM Power has received the go-ahead to build a $500 million gas-fired power station west of Brisbane.
 
LYC – Lynas Corp is back, surging another 5% after reporting it has secured enough funds ($US225 million in unsecured convertible bonds) to complete construction and start-up of its delayed rare earths processing plant in Malaysia.    
WHC – Whitehaven Coal has increased production by two per cent in the December quarter, but sales have fallen.

 

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

Commodities Stock Index  down -0.6%
Gold Stocks Index up 0.7%
Oil Stocks Index down -1.6% 

US ADRs – Broadly Lower!!… 

By Michael Hevern
Head of Research

 
For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

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Stock Market Analysis: Markets Cautious About Greek Outcome

Wednesday, January 25th, 2012

* US stock markets eased overnight.
* European stock markets ended lower overnight, as the Greek negotiations continue, as the Greek market plunged -5.5%.
* Many Asian stock markets remain closed for the Lunar New Year holidays.
* Commodities prices traded mostly lower, as Gold prices lower to around $US1,668 and while crude-oil closed up around $US100.

The SPI Futures is trading above the key pivot level of 4180, ended up 0.1% (or 4 points) at 4,196. The key levels for our index today are 4150 to 4230.

Yesterday Australian shares have held on to recent gains, as we had early expiry for equities options.  The energy and gold sectors provided some support for the market on the back of rising commodities prices overnight.  Crude-oil traded back above $US100, after news that the European Union (EU) had placed an embargo on Iranian exports, gold also traded around 5-month highs.Financials rose in overseas markets overnight, due to increasing confidence that talks to restructure Greece’s debt were progressing and reports that France and Germany were calling for a relaxation of global bank capital rules.   Shares in the All Ordinaries (XAO) traded flat  today, as the index closed flat at 4286, and as the S&P/ASX 200 (XJO) closed flat at 4224.

Aussie shares are expected to trade lower and after negative leads from the US and European markets.

See below for ASX listed companies in the news today.

Economics News Today
*  Nov     Westpac-Melbourne Institute Indexes of Economic Activity Leading Index
*  Jan     DEEWR Vacancy Report 
*  Q4      CPI Data.

US Markets

US stock markets eased overnight.  The Dow Jones Industrial Index posted its second consecutive decline for the first time in three weeks, but remains up 3.8% from the start of the year. In the broader market the S&P 500 closed in the red for the first time in a week, while the Nasdaq finished modestly higher.  The VIX is below 20 indicating investors are comfortable with this steady melt up of markets.
Investors showed caution as Greece’s debt-reduction talks are yet to be resolved.  In corporate news McDonald’s 4Q earnings rose 11% as the fast food company beat expectations; DuPont was flat after the diversified manufacturer’s 4Q earnings beat estimates; Johnson & Johnson finished flat after the consumer-products company reported 4A earnings and revenue that exceeded expectations and Apple reported after market that fiscal 1Q first-quarter earnings more than doubled, as both profit and revenue hit record highs, led by strong sales of the iPhone and iPad.
In commodities prices were generally lower as oil futures edged lower, as traders reassessed the impact of the European Union’s ban on Iranian crude-oil imports, gold prices slipped and base metals closed mixed.
All ten company groups that make up the S&P index traded mixed with the Materials flat , Financials sector down -0.1%, Energy sector was down -0.3%, Industrials sector was up 0.1%, Technology was down -0.1%,  while  Consumer Staples were down -0.6%.
 
The Dow Jones closed down -0.3% (or -33 points) at 12,676, the S&P 500 index down -0.1%  (or -1 points) at 1,314, the Nasdaq ended up 0.1% (or 2 points) at 2,786 and the smaller cap Russell 2000 was up 0.7%.

European Markets

European stock markets ended lower overnight, as the Greek negotiations continue.  The Stoxx 600 index fell -0.4% down from from a 5-month high.  
Across the region shares prices eased as Greece has yet to conclude debt talks with its private debt holders to write down the country’s debt by EUR100 billion. A resolution is crucial as Greece must repay EUR14.5 billion of maturing debt in March to avoid a default. The Greek market plunged -5.5%, due to the stalemate.

In London the FTSE 100 index closed down -0.5% (or -30 points) at 5752, the German DAX was down -0.3% (or -17 points) at 6,419 while in France the CAC was  down -0.5% (or -16 points)  at 3,322, Spain was down -0.3% and Italy ended up 0.1%.

Asian Markets

Many Asian stock markets are closed for the Lunar New Year holidays.  Many regional markets, including those in Shanghai, Hong Kong and Seoul, were closed for Lunar New Year holidays.
Japanese stocks rose on the back of higher energy stocks as crude- oil futures hovered around $US100 per barrel, though trading volumes were light.  The Bank of Japan kept interest rates on hold at near zero, noting that activity in the Japanese economy has flat due to a slowdown in overseas economies and appreciation of the yen. 
In China the SSE Composite was closed at 2,319, while in Hong Kong the Hang Seng Index was closed  at 20,110 and in Japan the Nikkei 225 Index closed up 0.2% (or  19 points) at 8,785, South Korean KOSPI was closed for the session, while the Indian market up 1.5%.

Commodities

The Dollar Index was lower  at 79.78 on a higher Euro, while the Australian Dollar last traded higher at 1.0491. Commodities prices traded mostly lower.

For the session the Benchmark crude NYMEX for January delivery was down -0.3% (or $US0.35) settle at $US99.24.  Copper prices are seeking a support level as Copper for January delivery was up 0.5% (or 1.8 cents) at $US3.8125.  January gold was down -0.8% (or $US13.80) at $US1,668.

ASX News Today

BBG – Billabong shares plunged today after surging due to recent speculation that the company could be the latest target from private equity buyers.

GUD –  GUD Holdings the consumer and industrial products supplier, says trading conditions are expected to remain tough in the second half of the financial year, in the wake of a fall in profits in the first half.

LYC – Lynas shares remains in a trading halt, as the rare earths miner is seeking to finalize a funding deal, which analysts estimate to be up to $100 million.  The halt comes a week before a meeting of Malaysia’s Atomic Energy Licensing Board, which is to decide whether to approve a temporary license for Lynas to commission a rare earths processing plant in central Malaysia.

NCM – Newcrest reported today it has a big year ahead, with two major expansion projects: the Cadia East project in New South Wales and the Lihir upgrade in PNG, which are set to be delivered in 2012 at costs beyond $1 billion each, weather permitting.  The company has had to downgrade its annual gold production forecasts by 6 percent.  Although on the current high gold prices, Newcrest is making more than $1000 of profit on each ounce of gold it produces, which helps cushion the fall in production. Newcrest plans to set up a secondary listing on the Toronto Stock Exchange and is on on track to launch this in the first quarter of 2012.

ORI – Orica says its restart of its ammonia plant near Newcastle has been put on hold for several weeks.

OSH – Oil Search shares jumped after the PNG-focused oil and gas producer reported a 26 percent rise in revenue for the year to December 31 to $US732.9 million thanks to higher oil prices and went on to forecast steady production in 2012.  The rise in revenue was driven by a 45 percent increase in realised oil prices.

PNA – PanAust the copper and gold miner has forecast an increase in production from its major operation in Laos and a rise in earnings.

QAN – Qantas has enjoyed monopoly status in the corporate travel arena since the collapse of Ansett, but now with Virgin Australia’s introduction of eight cushy padded leather clad business class seats across each of its domestic fleet of Boeing 737s, Qantas will now face competition for business class passengers for the first time in a decade.

Ex-dividend Date

None
 
Market Summary 
ASX – to open flat
US & UK/Europe – lower

Commodities Stock Index  down -0.7%
Gold Stocks Index down -1.9%
Oil Stocks Index down -0.4% 

US ADRs – Broadly Lower!!…

BHP down -0.9% & RIO down -0.5%; AWC down -3.5%
ANZ down -0.3% & NAB down -1.1%
NEM  down -0.1%, JHX down 1.4%, NWS down -0.5%

By Michael Hevern
Head of Research

 
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Stock Market Analysis: Markets Mixed Awaiting Greek Solution

Tuesday, January 24th, 2012

* US stock markets ended flat and are headed for their best January performance since 1997.
* European stock markets reached 5-month highs overnight. The European Stoxx 600 index closed 0.5% higher.
* Many Asian stock markets are closed for the Luinar New Year holidays.
* Commodities prices traded mostly higher, as Gold prices higher to around $US1,677 and while crude-oil closed up around $US100.

The SPI Futures is trading above the key pivot level of 4180, ended up 0.4% (or 16 points) at 4,208. The key levels for our index today are 4150 to 4230.

Yesterday Australian shares ended slightly lower, as lacklustre local producer pricing figures and eurozone uncertainty over a Greek debt deal pushed investors to take profits after the rally last week.  This is a holiday shortened week, as a number of Asian markets will be closed for the Lunar New Year holidays. The Australian Bureau of Statistics has reported today that producers prices rose at a slower pace than economists forecast last quarter as cheaper agriculture costs partly offset more expensive industrial machinery. The producer price index (PPI) rose 0.3 percent in Q4 2011 from the previous quarter, when it gained 0.6 per cent and the PPI index rose 2.9 percent in the fourth quarter from a year earlier. Drilling into the report showed the cost of industrial machinery and equipment manufacturing gained 3.2 percent, while prices dropped -21.8 percent in a category called other agriculture. 

The interest rate futures market is still forecasting the chances of another rate cut when the RBA next meets on February 7, at about an 80 percent chance.  Shares in the All Ordinaries (XAO) traded eased again today, closing down -0.4% at 4288, as the S&P/ASX 200 (XJO) closed down -0.3% at 4225.

Aussie shares are expected to hold on this option expiry day and traders are expected to continue to look for bargains today, after mixed leads from the US and European markets.�

See below for ASX listed companies in the news today.

Economics News Today

*   None.

US Markets

US stock markets ended flat and are headed for their best January performance since 1997.  US investors watched Europe for developments in its debt crisis. Investors monitored Greece as it endeavours to negotiate a debt-restructuring agreement with its private creditors.
All three benchmarks have posted weekly gains for the past three weeks, and traders cited profit-taking for the flat session.  Energy stocks were in focus as crude-oil continues to hold around $US100.  Chesapeake Energy jumped on 6.3% after the natural-gas producer said it plans to further reduce dry-gas drilling activity by 50% and to curtail its gross gas production by about 8% in response to a drop in natural-gas prices.

All ten company groups that make up the S&P index traded mixed with the Materials down -0.1%, Financials sector up 0.4%, Energy sector was up 0.8%, Industrials sector was down -0.1%, Technology was up 0.3%,  while  Consumer Staples were down -0.1%.

The Dow Jones closed down -0.1% (or -12 points) at 12,709, the S&P 500 index up 0.1%  (or 1 points) at 1,316, the Nasdaq ended down -0.1% (or -2 points) at 2,784 and the smaller cap Russell 2000 was down -0.2%.

European Markets

European stock markets reached 5-month highs overnight. The European Stoxx 600 index closed 0.5% higher.  Investors remain  optimistic as they await the resolution between Greece and its creditors over an agreement on a deal to write down debt with proposed haircuts of up to 70%.  
Across the region bank shares across Europe surged after FT reports that Germany and France are urging the relaxation of global bank-capital rules to prevent a lending slowdown. In Germany banks surged with Commerzbank AG jumped 13% and Deutsche Bank AG rose 3.1%, while in Italy, Banca Monte dei Paschi de Siena SpA surged 14% and UniCredit SpA advanced 10%.  
In Greece the market surgeded 5.1%, as the government is reported to be getting closer to an agreement with private creditors,as they seek to cut Greek debt by as much as EUR100 billion.  Resolution and agreement is critical for Greece to avoid a default when EUR14.4 billion comes due 20th March. The IMF has warned that the global economy could slip into a “1930s moment” unless Europe deals with its debt crisis.  
In London the FTSE 100 index closed up 0.9% (or 54 points) at 5782, the German DAX was up 0.5% (or 32 points) at 6,437 while in France the CAC was  up 0.5% (or 17 points)  at 3,338, Spain was up 0.7% and Italy ended up 1.8%.

Asian Markets

Many Asian stock markets are closed for the Luinar New Year holidays.  Many regional markets, including those in Shanghai, Hong Kong and Seoul, were closed for Lunar New Year holidays. Japanese stocks ended flat, with rising exporter shares offset by losses in energy sector shares. Exporters mostly advanced in Japan with Toshiba climbing 4.3% and Sony jumping 4%. 

In China the SSE Composite was closed at 2,319, while in Hong Kong the Hang Seng Index was closed  at 20,110 and in Japan the Nikkei 225 Index closed flat (or  -1 points) at 8,766, South Korean KOSPI was closed for the session, while the Indian market up 0.1%.

Commodities

The Dollar Index was lower  at 79.77 on a higher Euro, while the Australian Dollar last traded higher at 1.0525. Commodities prices traded mostly higher.

For the session the Benchmark crude NYMEX for January delivery was up 1.6% (or $US1.61) settle at $US99.94.  Copper prices are seeking a support level as Copper for January delivery was up 1.4% (or 5.4 cents) at $US3.7930.  January gold was up 0.9% (or $US14.30) at $US1,677.  

ASX News Today

 
AFI – African Iron’s major shareholder Cape Lambert Resources has formally accepted a take-over offer from South African miner Exxaro.
   
APA may be forced to significantly sweeten its offer price for rival pipeline owner and operator Hastings Diversified, according to a UBS note to clients today.  The investment bank said units in Hastings could be worth as much as $2.45 each, which is significantly higher than the bid price of around $2.00 per unit offered by APA.

ANN – Ansell the gloves and condoms supplier appointed Koreca Industries to distribute Ansell’s personal protective equipment products in the Republic of Korea.

BHP – BHP Billiton is progressing along with its Pilbara,WA,  port expansion plans.  The plan to spend over $20 billion over eight years in expanding its port facilities in the Pilbara region are a step closer today, after the company received approval from the WA’s Environment Protection Authority for its Outer Harbour plan at Port Hedland.  At full capacity, the Outer Harbour plan is designed to lift BHP’s Pilbara iron ore exports to 350 million tonnes by 2020, which is more than double this year’s 159 million tonnes forecast shipments.

EXT – A Chinese nuclear company is a step closer to making a bid for Australian uranium firm Extract Resources after gaining a 30 percent stake in its biggest shareholder.

LYC- Lynas shares are in a trading halt, as the rare earths miner is seeking to finalize a funding deal, which analysts estimate to be up to $100 million.  The halt comes a week before a meeting of Malaysia’s Atomic Energy Licensing Board, which is to decide whether to approve a temporary license for Lynas to commission a rare earths processing plant in central Malaysia.

MBN – Mirabela Nickel says the record production in the December quarter has helped it meet its 2011 targets, and the company expects higher production in 2012.

NCM – Newcrest Mining reported gold production rose 3 percent in the December quarter, compared with the previous three months, but was down 20 percent on the prior corresponding period.

NXS – Nexus Energy announced it will form a joint venture with oil major Royal Dutch Shell and Osaka Gas to develop its Crux field in the Browse Basin, WA.
   
ORG – Orgisn says the Australia-Pacific LNG gas project in Queensland is nearing a positive final investment decision after a sales deal with China’s Sinopec was made legally binding.

WSA – Western Areas hopes to become Australia’s second largest nickel producer through the expansion of its existing domestic output and new mines in Finland and Canada.

Ex-dividend Date
None
 

Market Summary 
ASX – to open flat
US & UK/Europe – mixed

Commodities Stock Index  up 0.4%
Gold Stocks Index up 1.7%
Oil Stocks Index up 0.8% 

US ADRs – Broadly Mixed!!…

BHP up 0.9% & RIO up 1.7%; AWC up 3.5%
ANZ up 0.4% & NAB up 0.1%
NEM  down -0.1%, JHX down , NWS up 0.6%

By Michael Hevern
Head of Research

For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

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Stock Market Analysis: Markets Drift Higher On Succesful EU Debt Auctions

Friday, January 20th, 2012

* US stock markets continued to gain overnight, ending at 6-month highs, as corporate earnings, jobs data and bank earnings reports kept stocks moving higher.
* European stock markets rose overnight, as the financials sector led the gains after successful Spanish and French debt auctions.
* Asian stock markets pushed higher yesterday,  after the International Monetary Fund (IMF) said it planned to boost its lending resources and China moved to ease.
* Commodities prices traded mostly lower, as Gold prices lower to around $US1,654 and while crude-oil closed down around $US100.

The SPI Futures is trading below the key pivot level of 4180, ended up 0.7% (or 29 points) at 4,226. The key levels for our index today are 4180 to 4280.

Australian shares have trimmed their early gains after the jobs numbers showed unemployment remained steady.  Investor sentiment started the day buoyed by news that the IMF may raise $US1 trillion in additional funds to fight the eurozone debt crisis, positive US economic news on the housing sector and a better-than-expected earnings report by Goldman Sachs.

The markets have ignored the World Bank’s bleak picture for 2012, were it cut its outlook for global growth in 2012, when in its half yearly assessment of global economic prospects it has slashed its global growth forecast for 2012 from 3.6 percent to 2.5 percent.  News the that  International Monetary Fund (IMF) would seek up to $US500 billion in additional funds to combat the European debt crisis, was well received by traders.

In today’s job report, the Australian Bureau of Statistics (ABS) reported that the unemployment rate was 5.2 percent in December, compared with a revised 5.2 percent in November. The Australian economy shed 29,300 jobs, with the loss of 53,700 part-time jobs, and a gain of 24,500 full-time position, while the participation rate, was lower at 65.2 percent in December (down from 65.5 percent in November). Shares in the All Ordinaries (XAO) traded eased today, closing down -0.1% at 4279, as the S&P/ASX 200 (XJO) closed down -0.1% at 4215

Aussie shares are expected to continue to rise and traders are expected to continue to look for bargains today, after positive leads from the US and European markets.  

See below for ASX listed companies in the news today.

US Markets

US stock markets continued to gain overnight, ending at 6-month highs, as corporate earnings, jobs data and bank earnings reports kept stocks moving higher. 
The Dow Jones Industrial Average finished above 12,600, while in the broader markets the S&P 500 and the tech-heavy Nasdaq rose another 0.5%.  Financials, Technology and the Industrials all led the gains.  Bank of America was up 2.4%, after reporting 4Q revenue that exceeded expectations, while Morgan Stanley gained 5.4% after reporting a fourth-quarter loss that still topped forecasts.
Weekly jobless claims fell the most in over six years.
There were a raft of earnings reports. Union Pacific’s railways rose 2.4%, as fourth-quarter earnings jumped a higher-than-expected 24% as freight revenue rose across all major segments, outpacing higher fuel costs.
Tech stocks were in focus, with F5 Networks posting the strongest gains in the S&P 500 as the Internet networking equipment maker said fiscal 1Q earnings rose 19% and the company also gave an upbeat earnings outlook. Shares rose 11%. EBay jumped 3.9% as the online auctioneer said 4Q earnings and revenue beat expectations, offsetting a downbeat outlook for the current quarter.  
After market earning reports included: Google which disappointed, Intel came inline,  IBM has a positive 2012 forecast and Microsoft reported well.

All ten company groups that make up the S&P index traded higher   with the Materials up 1.1%, Financials sector up 1.5%, Energy sector was up 1.6%, Industrials sector was up 0.9%, Technology was up 1.5%,  while  Consumer Staples were up 1.6%.

The Dow Jones closed up 0.8% (or 96 points) at 12,578, the S&P 500 index up 1.1%  (or 14 points) at 1,308, the Nasdaq ended up 1.5% (or 42 points) at 2,770 and the smaller cap Russell 2000 was up 1.8%.

European Markets

European stock markets rose overnight, as the financials sector led the gains after successful Spanish and French debt auctions. The Stoxx Europe 600 index ended up 1.2%.
The Debt sales in Spain and France buoyed sentiment as demand was firm and borrowing costs fell.  The Spanish government exceeded its target of auctioning between EUR3.5 to EUR4.5 billion and it raised EUR3 billion in its first 10-year bond sale this year, for a total auction sale of EUR6.6 billion.  The French government sold approximately EUR8 billion of medium-term bonds and as yields declined across the board compared with recent auctions.  
The Greek market jumped 3.2% as the talks between the Greek government and its private debt holders appeared to be close to an agreement on fresh proposals.

In London the FTSE 100 index closed up 0.7% (or 39 points) at 5741, the German DAX was up 0.9% (or 62 points) at 6,416 while in France the CAC was  up 2.0% (or 64 points)  at 3,264, Spain was up 2.2% and Italy ended up 0.6%.

Asian Markets

Asian stock markets pushed higher yesterday,  after the International Monetary Fund (IMF) said it planned to boost its lending resources and the Chinese central bank moved to ease liquidity in the money markets.

Markets across the region rose around 1.2%.  Financial stocks led the gains.  Investors cheered the news from the People’s Bank of China which offered CNY183 billion in 14-day reverse repurchase agreements, pushing short-term borrowing rates lower in Chinese interbank money markets. Remember Chinese trading will be closed next week due to the Lunar New Year holidays.

In China the SSE Composite was closed up 1.3% (or 29 points) at 2,296, while in Hong Kong the Hang Seng Index was up 1.3% (or 256 points)  at 19,942 and in Japan the Nikkei 225 Index closed up 1.0% (or  89 points) at 8,639, South Korean KOSPI was up 1.2% for the session, while the Indian market up 1.2%.

Commodities

The Dollar Index was lower  at 80.08 on a higher Euro, while the Australian Dollar last traded higher at 1.0430. Commodities prices traded mostly lower.

For the session the Benchmark crude NYMEX for January delivery was down -0.2% (or -$US0.20) settle at $US100.37.  Copper prices are seeking a support level as Copper for January delivery was up  1.4% (or 5.0 cents) at $US3.8020.  January gold was down -0.3% (or -$US5.40) at $US1,654.  

ASX News Today

 
BPT – Beach Energy ended 2.6% higher, having renegotiated a royalty agreement with Exxon Mobil subsidiary Esso Australia and resolved a related claim that Beach described as a “win-win” result.   The royalty agreement relates to assets in the Cooper and Eromanga Basins in central Australia that Beach gained in 2006 through its acquisition of Esso Australia subsidiary Delhi Petroleum.  

IVA – Ivanhoe Mines, owner of Mongolia’s Oyu Tolgoi project, will scrap a controversial “poison pill”, clearing the way for its single largest shareholder, Rio Tinto, to take over what could be one of the world’s largest copper-gold mines.  The 49 per cent cap on Rio Tinto’s ownership of Ivanhoe has now expired.

LYC – Lynas Corporation the rare earths miner, continued to surge after yesterday, reporting it has significantly increased the estimated resources at its major Mount Weld project in WA.

LNC – Linc Energy continued to surge yesterday.

STO – Santos ended up 0.3%, after saying its production fell -9 percent in the fourth quarter compared to a year earlier and it maintained its forecast for 2012 production. The fall in output was primarily due to the sale of Santos interest in the $16 billion Gladstone coal seam gas-to-LNG project (GLNG) from 60 per cent to 30 per cent. 

SYD – Sydney Airport has notched up its sixth consecutive month of weaker passenger numbers after growth in international travellers from key Asian markets failed to help offset a decline in domestic travel. China had helped to boost total international travellers by 2.2 per cent in December, but was not enough to offset a 4.5 percent decline in domestic travellers, leading the airport to reporting a 2.2 per cent fall in total passengers in December.

WBC- Westpac is expected to slash as many as 600 positions across its operations this year, adding to job losses for the banking industry.

WPL – Woodside Petroleum finished down -1.9% after posting a -6 percent fall in fourth-quarter production over the same time last year and maintained its forecast for production of between 73 to 81 million barrels of oil equivalent in 2012.

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

Commodities Stock Index  up 0.5%
Gold Stocks Index don -2.3%
Oil Stocks Index up 0.5% 

US ADRs – Broadly Mixed!!…

BHP up 0.2% & RIO up 2.7%; AWC up 1.3%
ANZ up 0.1% & NAB up 0.8%
NEM  down -1.2%, JHX up 4%, NWS up 2.5%

By Michael Hevern
Head of Research

 
For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

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Stock Market Analysis: Markets Drift Higher On Successful EU Bond Auctions

Thursday, January 19th, 2012

* US stock markets drift higher to levels not seen since mid last year.
* European stocks closed modestly higher after a choppy session overnight, as the Greek market jumped 2.8%.
* Asian stock markets ended mixed yesterday, the Chinese market giving back some of its 4% gains from the previous session.
* Commodities prices traded mostly higher, as Gold prices rose to around $US1,660 and crude-oil closed up around $US101.

The SPI Futures is trading below the key pivot level of 4180, ending up 0.7% (or 30 points) at 4,222. The key levels for our index today are 4180 to 4280.

Yesterday Australian shares edged higher, as investors focused on reports out of the mining sector, rather than disappointing consumer confidence data and fresh profit downgrades from insurers and retailers. 

The World Bank reported that the global economy is on the edge of a new financial crisis, that could be more disastrous than the one that followed the collapse of Lehman Brothers in 2008. 

In its half yearly assessment of global economic prospects the World Bank slashed its global growth forecast for 2012 from 3.6 percent to 2.5 percent, while high-income nations are forecast to grow at 1.4 percent, down from 2.7 percent, and the eurozone economy is now forecast to 0.3 percent.  US growth is now forecast to expand 2.2 percent in its presidential election year (down from the forecast 2.9 percent), while the Chinese economy is expected to expand 8.4 percent this year (down from last year’s 9.2 percent).

Aussie shares are expected to continue rising today and traders are expected to continue looking for bargains, after positive leads from the US and European markets.  

See below for ASX listed companies in the news today.

US Markets

US stock markets drift higher to levels not seen since mid last year.

The Dow Jones Industrial Average registered its biggest one-day gain in more than two weeks. The S&P 500 rose above 1300 for the first time since July, for its sixth gain in seven days and the tech-heavy Nasdaq Composite outperformed up 6.3% this year. The Financials, Technology and Energy sectors have led the markets higher in the session.

Financial stocks led the session’s rise, helped by encouraging news at Goldman Sachs Group and strong housing data. A report from the National Association of Home Builders showed confidence among home builders in January rising to a stronger-than-expected reading of 25 (the highest since June 2007).

Goldman Sachs jumped 6.8% after earnings and revenue slumped, although their profits topped lowered forecasts, and Yahoo rose 3.2% after the company announced co-founder Jerry Yang has resigned from the board.

All ten company groups that make up the S&P index traded higher with Materials up 1.1%, Financials up 1.5%, Energy up 1.6%, Industrials up 0.9%, Technology up 1.5%, while Consumer Staples were up 1.6%.

The Dow Jones closed up 0.8% (or 96 points) at 12,578, the S&P 500 index was up 1.1% (or 14 points) at 1,308, the Nasdaq ended up 1.5% (or 42 points) at 2,770 and the smaller cap Russell 2000 was up 1.8%.

European Markets

European stocks closed modestly higher after a choppy session overnight.  The European Stoxx 600 index was up 0.1%.

The Greek market jumped 2.8%, as the Greek government resumed talks with bondholders to discuss a voluntary write-down on the country’s sovereign debt and as the Prime Minister said that he would consider forcing a private sector haircut on the debt if a deal cannot be reached.

Across the region stocks jumped as the International Monetary Fund (IMF) reportedly proposed expanding its lending fund to $US1 trillion. Financials had a strong session on the back of successful bond auctions.

Investor sentiment was boosted by a successful bond auction in Germany, which paid the lowest interest rate on record to sell 2-year treasury notes, while the Portuguese government sold EUR2.5 billion in short-term debt with borrowing costs declining slightly.

In London the FTSE 100 index closed up 0.2% (or 8 points) at 5702, the German DAX was up 0.3% (or 22 points) at 6,355 while in France the CAC was down -0.2% (or -5 points) at 3,264. Spain was down -1.7% and Italy ended up 1.3%.

Asian Markets

Asian stock markets ended mixed yesterday. The Chinese market gave back some of its 4% gains from the previous session, as concerns Beijing may not ease its monetary policy encouraged traders to lock in profits ahead of the week-long Lunar New Year holiday.

In Japan the Nikkei Stock Index ended 1% higher, outperforming in the region, as fears about the global economic outlook abated, despite the gloomy World Bank forecasts.  In China traders took profits, after the market surged with its biggest gain since October 2009 in the previous session.  Growth-sensitive stocks eased, but energy stocks advanced, as benchmark New York crude-oil futures rose back above $101 a barrel. 

In China the SSE Composite was closed down -1.4% (or 32 points) at 2,226, while in Hong Kong the Hang Seng Index was up 0.3% (or 59 points) at 19,687 and in Japan the Nikkei 225 Index closed up 1.0% (or 84 points) at 8,550. The South Korean KOSPI was flat for the session, while the Indian market eased to be flat.

Commodities

The Dollar Index was lower at 80.52 on a higher Euro, while the Australian Dollar last traded higher at 1.0404. Commodities prices traded mostly higher.

For the session the benchmark crude NYMEX for January delivery was up 0.4% (or $US0.36) to settle at $US101.07.  Copper prices are seeking a support level as Copper for January delivery was up 0.6% (or 2.1 cents) at $US3.7480.  January gold was up 0.3% (or $US4.30) at $US1,660.

ASX News Today

BHP – BHP Billiton is set to break its first-half profit records despite softer iron ore prices, as BHP reported iron ore production for the half year to December 31 of 80.6 million tonnes (Mt), up 23 percent on the same period in 2010.

OZL – OZ Minerals has lifted gold output to 160,007 ounces of gold in the final quarter of 2011 while copper production fell 107,744 tonnes, but it still achieved full-year production in line with guidance.

LYC – Rare earths miner Lynas Corporation reported it has significantly increased the estimated resources at its major Mount Weld project in WA.  The mineral resource estimate at Mt Weld is now 23.9 million tonnes, up 37 percent from its previous estimate in September 2010, after an extended drilling program at Mt Weld. Lynas is in the development phase of two rare earths projects, a concentration plant at Mt Weld and the Lynas Advanced Materials Plant (LAMP) in Malaysia.

ORI – NSW Environment Minister Robyn Parker says she is deeply concerned by yet another emissions breach at one of Orica’s plants and wants answers.

SGM – Sims Metals, the metals recyler, reported it has made a move into the Chinese market, outlaying $US137 million for a 18 percent stake in a Hong Kong company, Chiho-Tiande Group, which has operations in both Hong Kong and mainland China.

SFH – Retailer Speciality Fashion Group says its Christmas performance was disappointing, with sales lower than the previous year.

WES – Wesfarmers expects a 74 percent drop in first-half earnings from its insurance division because of a high number of natural disasters.

Market Summary 

ASX – to open higher
US & UK/Europe – EU higher
Commodities Stock Index  up 1.6%
Gold Stocks Index up 0.5%
Oil Stocks Index up 1.3% 

US ADRs – Broadly Higher

BHP up 2.7% & RIO up 2.7%; AWC up 0.9%
ANZ up 1.1% & NAB up 1.1%
NEM  down -1.0%, JHX up , NWS up 1.5%

 By Michael Hevern
Head of Research

For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

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Stock Market Analysis: Markets Drift Higher On Positive Chinese GDP Figures

Wednesday, January 18th, 2012

* US stock markets finished higher overnight, as investors played catchup after a public holiday.
* European stock markets rose for a second session overnight, as investors chose to focus on the positive growth data from China, the US and Germany.
* Asian stock markets rallied yesterday as the Chinese economy expanded at a better-than-expected 8.9% during the fourth quarter.
* Commodities prices traded mostly higher. Gold prices rose higher to around $US1,658 and crude-oil closed up around $US100.

The SPI Futures is trading below the key pivot level of 4180, ending down -0.2% (or -9 points) at 4,177. The key levels for our index today are 4150 to 4250.

Yesterday Australian shares climbed steadily, assisted by the better-than-expected Chinese growth data, with the annual GDP figure coming in at 9.2 percent, down from 10.4 percent a year earlier.  Shares in the All Ordinaries (XAO) traded steadily higher, closing up 1.6% at 4278, as the S&P/ASX 200 (XJO) closed up 1.7% at 4216.

Aussie shares are expected to continue to rise today and traders are expected to continue looking for bargains after positive leads from the US and European markets.  Short-term traders may look to position themselves ahead of earnings reporting season in the US.
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See below for ASX listed companies in the news today.

US Markets

US stock markets finished higher overnight, as investors played catchup after a public holiday.  Investor sentiment was boosted by strong economic data in the US, China and Germany which laid the platform for the highest close since last July, though trading volumes were down.

The financial sector limited the gains, as Citigroup plunged -6.7% after the bank reported fourth-quarter results that missed analyst expectations, as the company struggled with weaker revenue from trading.

Cruise liner operator Carnival plunged -14% after one of the company’s cruise ships capsised off the coast of Italy on the weekend.

In economic news a gauge of New York manufacturing activity beat expectations, as a German economic sentiment indicator also rose to the highest level since July 2011 and China’s economy expanded a better-than-expected 8.9% during the fourth quarter.

All ten company groups that make up the S&P index traded higher except for the Financials sector which was down -0.8%. Materials were up 0.6%, Energy was up 0.7%, the Industrials sector was up 0.5%, Technology was up 0.5%, and Consumer Staples were up 0.3%.

The Dow Jones closed up 0.5% (or 60 points) at 12,482, the S&P 500 index up 0.4%  (or 5 points) at 1,294, the Nasdaq ended up 0.6% (or 17 points) at 2,728 and the smaller cap Russell 2000 was up 0.2%.

European Markets

European stock markets rose for a second session overnight, as investors accepted the well publicised eurozone downgrades, and chose to focus on the positive growth data from China and the US, and good economic news from Germany. The Stoxx Europe 600 index rose 0.9%.

The ZEW indicator of economic sentiment for Germany jumped 32.2 points in January to -21.6 points, its highest level since July.  Successful bond auctions also helped as Spain held its first debt auction since Standard & Poor’s downgraded its credit rating last week. Borrowing costs are falling with 1-year bill yields at 2.049%, down from 4.05% last week.  Commodity prices rose across the board overnight.

In London the FTSE 100 index closed up 0.7% (or 36 points) at 5,694, the German DAX was up 1.8% (or 113 points) at 6,332 while in France the CAC was up 1.4% (or 45 points) at 3,270, Spain was up 1.0% and Italy ended up 0.7%.

Asian Markets

Asian stock markets rallied yesterday as China reported GDP figures showing the economy grew at 8.9 percent for the fourth quarter, the slowest expansion since the June quarter of 2009, but beating analysts’ forecasts of 8.7% growth.

The Chinese growth has slowed for five consecutive quarters, as the government reversed some of its stimulus policies in a bid to keep control inflation. The annual figure came in at 9.2 percent, down from 10.4 percent a year earlier.

Across the region financial stocks also rose and growth-sensitive commodity stocks were bought up after the positive Chinese economic growth news.  In China these stocks were the best performers after dropping in the last four trading days and the Shanghai Composite surged 4.2%, its biggest gain since October 2009. In Japan exporters were among best gainers, as the euro strengthened against the yen.
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In China the SSE Composite was closed up 4.2% (or 92 points) at 2,298, while in Hong Kong the Hang Seng Index was up 3.2% (or 615 points) at 19,628 and in Japan the Nikkei 225 Index closed up 1.1% (or 88 points) at 8,466. The South Korean KOSPI was up 1.8% for the session, while the Indian market surged up 6.5%.

Commodities

The Dollar Index was lower at 81.24 on a higher Euro, while the Australian Dollar last traded higher at 1.0379. Commodities prices traded mostly higher.

For the session the benchmark crude NYMEX for January delivery was up 2.3% (or $US2.25) to settle at $US100.95.  Copper prices are seeking a support level as Copper for January delivery was up 2.6% (or 9.4 cents) at $US3.7260.  January gold was up 1.5% (or $US24.80) at $US1,658. 

ASX News Today

BHP – BHP and Rio Tinto said they are set to report solid iron ore output growth in the December quarter as they continue to expand mining in Australia, betting any loss in China’s appetite for the steelmaking material is only temporary.  Both companies reaffirmed that sales orders to China, the world’s largest buyer, are showing no signs of weakening despite a slowdown in Chinese steel production.

BOL – Boom Logistics has been nominated as the successful bidder for a five-year contract to supply crane services to BHP Billiton’s Olympic Dam operations.

CFE – Cape Lambert Resources says its African Iron’s major shareholder has formally accepted a take-over offer from South African miner Exxaro.

GRR – Grange Resources the iron ore pellet producer forecast a lift in full year output by as much as 15 percent because of better conditions at its Savage River mine in Tasmania.

OMH – OM Holdings the manganese miner expects to post a loss of about $12 million for the 2011 calendar year, due to the high Australian dollar and several one-off costs.

PDN – Paladin Energy the uranium miner surged today, after reporting a 24 percent gain in output and predicting an increase in prices for the nuclear fuel.  They said uranium prices are starting to show signs of strengthening as new demand emerges.

RIO – Rio Tinto has easily beaten its full year iron ore production guidance but copper output was hampered by industrial action.

Market Summary 

ASX – to open higher
US & UK/Europe – EU higher
Commodities Stock Index  up 0.2%
Gold Stocks Index udown -2.1%
Oil Stocks Index up 1.3% 

US ADRs – Broadly Higher

BHP up 1.8% & RIO up 3.2%; AWC up 3.4%
ANZ up 0.1% & NAB up 0.6%
NEM  down -3.9%, JHX up 0.6%, NWS up 1.9%

By Michael Hevern
Head of Research

For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.

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