* US stock markets fell overnight, easing back from another all-time high.
* European stocks markets ended flat, hovering around 5-year highs overnight, as BoE raised its forecasts.
* Asian stock markets ended lower yesterday, backing off its 5-year highs.
* Commodities prices generally higher, Gold prices are trading around $US1,389, while crude-oil closed around $US95.
The Aussie market held at 5-year highs, around the 5200 and is looking to open flat today, as stock prices closed modestly lower in Europe and in the US.
SPI Futures is trading just above the key level of 5200, ended up 0.1% (or 9 points) at 5,177. The key levels for the ASX200 index today are 5130 to 5200. Expect miners to remain under pressure with the falling commodity prices, with gold cracking the $1,400 level and iron ore prices now down over 20% from its February highs.
The Japanese market is at 4 1/2 year highs, driven by moves in the Japanese currency (Yen).
See below for ASX listed companies in the news today.
US stock markets fell overnight, easing back from another all-time high.
The three benchmark indexes all ended up over 0.4%, recovering from earlier selling due to soft manufacturing data. The Dow Jones closed remained above the 15,200 level. The S&P500 again closed held at the 1650 level near all-time highs and has closed higher for ten of the last eleven trading sessions (up 16% for the year). Nearly 200 of the S&P500 stocks are at 52-week highs, the most since 1993. The gains have been broad based as over 85 percent of S&P 500 stocks are trading above their 50 gay moving average, according to Bloomberg (the highest level since 14 March).
All the ten S&P sectors ended lower, except for Technology up 0.5%, with falls led by the Healthcare and Consumer Discretionary sectors down over -1.1%, followed by Materials, Energy and Industrials sectors all ended down around -0.5%. The Homebuilder index slumped -1.9% as all 11 members closed lower.
Traders took profits after the Fed Bank of San Francisco President John Williams said the central bank may begin slowing the pace of its $85 billion in monthly bond-buying amid signs the economy is gradually gaining strength. Stock prices have been rising since the Fed Chairman Ben Bernanke confirmed that the Fed will continue its unprecedented stimulus until the jobless rate falls to 6.5 percent or inflation rises above 2.5 percent.
In economic news reports suggested a slowdown in US economic growth, as manufacturing in the Philadelphia region unexpectedly contracted in May for the first time in three months as new orders retreated and factories cut back on employment and hours, while jobless claims jumped by 32,000 to 360,000 in the week ended 11 May, the most since the end of March and housing starts slumped 16.5 percent in April, the most since February 2011.
For the session Dow Jones closed down -0.3% at 15,233, the S&P500 closed down -0.5% at 1,650, and the NASDAQ closed down -0.2% at 3,465.
European stocks markets ended flat, hovering around 5-year highs overnight.
The Europe Stoxx 600 ended down -0.1% for the session, the index is still up 10% for the year and at its highest level since June 2008. It is clear that the ECB will remain supportive of equities going forward. Across the region the financials and commodity related sectors weighed again, after JPMorgan lowered its forecast for Chinese 2013 gross domestic product growth to 7.6 percent from 7.8 percent, citing weak domestic demand.
Traders have received confirmation that the eurozone is suffering its longest recession since the GFC, as a Eurostat report showed the eurozone economy shrank more than economists had forecast extending its recession to a record sixth quarter, as GDP fell 0.2 percent in the first quarter, after GDP slid 0.6 percent in the final quarter of 2012. The longest recession since 2000, is the 15-month long contraction in 2008-2009.
The German market held a new all-time high and is up 10% for the year, despite German investor confidence rising less than forecast in May. The French CAC held around its highest level since mid-2011.
In London traders took profits after the FTSE reached its highest level since December 2007, after the Bank of England (BoE) said that an economic recovery in the UK is now “in sight”, as it predicted that growth will accelerate to 0.5 percent in the second quarter from 0.3 percent in the first three months of the year.
In the UK the FTSE 100 closed down -0.1% at 6,688, the German DAX 30 closed up 0.1% at 8,370, the French CAC 40 closed down -0.1% at 3,979, while the Italian market closed up 0.3% at 17,544.
Asian stock markets ended lower yesterday, backing off its 5-year highs.
The MSCI Asia Pacific Index ended gained 0.8% for the session. The index is up 10% for the year and is on track for the longest winning streak since September 2009, on optimism over central bank stimulus, Japan will continuing to deploy more measures to beat deflation and as centrals banks remain supportive in the US and Europe.
In Japan the market eased but held above 15,000 at 4 1/2 year highs, on the back of a weaker yen. The pullback was despite Japanese gross domestic product surprising, rising an annualized 3.5 percent in the three months through March, the most in a year (better than the forecast 2.7%), while fourth-quarter growth was revised to 1 percent. The yen has fallen 18% this year and every time the yen falls below a key level, the Nikkei passes reached another milestone because it boosts corporate profits, especially for manufacturers and exporters.
The Chinese market saw some bargain hunting, having its best gain in 2-weeks, as the Shanghai Composite is now only down -0.8% for the year, having fallen around -9% from its February peak. In Hong Kong the market also rose, despite the Chinese Premier Li Keqiang signaled policy makers are reluctant to use stimulus to counter an economic slowdown.
Of the around 420 companies on the MSCI Asia Pacific Index that reported their latest quarterly results since April, 53 percent have beaten analyst forecasts, according to Bloomberg.
For the session the Chinese Shanghai Composite closed up 1.2% at 2,252, the Hong Kong Hang Seng closed up 0.2% at 23,083, and the Japanese Nikkei closed down -0.4% at 15,037, while the South Korean KOSPI closed up 0.8% at 1,987.
The Dollar Index was higher at 83.60 on a lower Euro, and the Aussie Dollar closed up at 0.9825. Commodities prices traded higher.
Overnight the COMEX WTI Crude for MAY13 delivery closed up 0.9% at $US95.16, the COMEX Copper for May 13 delivery closed up 0.9% at 3.295, the COMEX Gold for JUN13 delivery closed down -0.7% at $US1,386.90.
ASX News Today
BHP – BHP Billiton, new chief executive Andrew Mackenzie has outlined plans to slash capital spending by almost 20%.
CBA – CommBank has lifted its third quarter profit by 12 percent to $1.9 billion.
FMG – Iron ore hopeful Brockman Resources is seeking access to Fortescue Metal Group’s rail infrastructure in the Pilbara region of WA.
GNC – Graincorp Australia’s largest grains handler has reported one-third profit drop as regulators consider a takeover bid from an American food giant.
MAH – Macmahon Holdings the mining services provider shares surged, after it detailed positive growth in a “changing and challenging environment”.
NWS – Foxtel says it will compensate its customers who did not receive a promised free television within 10 days as promised as part of a promotional offer.SYD – Sydney Airport has forecast larger distributions for its shareholders as its number of passengers continues to rise.
RIO- Rio is facing union troubles as the maritime union has accused the owners of a Newcastle coal terminal of “continued belligerence” amid an ongoing industrial dispute at the facility.
TAH – Tabcorp the gambling firm has begun legal action against the Victorian government over a poker machine levy set to cost the company millions of dollars.
VAH – Virgin Australia announces a profit warning issued by the airline.
WPL – Woodside Petroleum is keeping an eye on an offshore gas field in Mozambique that is five times bigger than its North West Shelf project.
WRT – Westfield Retail Trust says consumer confidence is improving but shoppers are still cautious and sales growth is still low.
ASX – to open flat
US & UK/Europe – flat.
US ADRs – Broadly lower!!…
ANZ -1.2%, NAB -1.5%
BHP -0.2%, RIO -1.4%, NEM -0.4%
By Michael Hevern
D2MX Investment Advisor
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