* US stock markets reversed a five session slide (its longest since September), due to better than expected employment data.
* European stock markets ended higher, but the gains were insufficient to recover the prior five sessions of losses (their longest losing streak in over five months), after the ECB talked of the risks over eurozone growth.
* Asian stock markets ended lower again, recording their biggest fall in four months, but Japanese stocks bucked the regional trend. The MSCI Pacific Index fell -1.7% last week. Look for a rebound today.
* Commodities prices higher, Gold prices are now trading around $US1,229, while crude-oil traded higher around $US97.
The ASX market is looking to open higher today, with the 5200 level key near-term, as markets rebound across Europe and the US markets ended higher, after the NFP employment report on Friday surprised.
Last week the ASX recorded its biggest one day sell off since early August, wiping off $20 billion from the market’s capitalisation and is now down -5% below the October peak. The ASX lost 2.5 per cent last week, making it the market’s worst five days since early June, the worst week for shares in six months as nervous investors awaited the crucial US jobs report that is set to determine the course of Fed stimulus policy in coming months. However this recent pullback could be setting up nicely for a Christmas rally.
The SPI 200 futures were up 0.5% at 5,209, giving a positive lead for the ASX market today. The Australian dollar edged higher up from around three month lows at US91.3c, this surprised as the Fed moves towards taper and the market begins to start the countdown towards eventually tightening in policy.
Is the ASX 200 setting up for Christmas Rally? Read more here...
US stock markets reversed a five session slide (its longest since September), due to better than expected employment data. Traders had shown caution as economic data continues to improve raising concerns over Fed tapering ahead of the FOMC meeting on 17-18 December.
The three benchmark indexes rebounded ending flat for the week, as traders digested the monthly employment figures, Volatilty slumped -8.6% backing off six week highs. The S&P500 recovered nearly all the losses of the the past five session. The index is up 26% for the year and is on track for its best annual performance since 1999.
All ten S&P500 sectors ended higher again, with the gains dominated by the Financials, Materials, Healthcare and Consumer Discretionary were up over 1.3%, all other sectors wet up over 0.5%. Ten year interest rates held after spiking higher earlier in the week.
In economic news the NFP monthly jobs report surprised as 203,000 jobs were added to payrolls and the unemployment rate fell to 7.0% (better-than-expected), while consumer spending rose 0.3%, more than expected in October. Earlier in the week the US economy expanded at a faster pace in the third quarter, as GDP jumped to an annualised 3.6% (up from 2.8%), its strongest reading since 1Q 2012, while inventories increased the most since 1998.
For the session Dow Jones closed up 1.3% at 16,020, the S&P500 closed up 1.1% at 1,805, and the NASDAQ closed up 0.7% at 4,062, while on 10-year Treasury notes jumped again to 2.86%.
European stock markets ended higher, but the gains were insufficient to recover the prior five sessions of losses (their longest losing streak in over five months), after the ECB talked of the risks over eurozone growth.
The Europe Stoxx 600 fell 2.7% last week. On Friday across the region all ten sectors ended in the green again, with gains led by the Energy up 1.7%, closely followed by the Tech, Industrials and Financials sectors up around 1.0%, while other sectors rose over 0.4% fro the session. The index is still up around 13% for the year and is still on track for its best annual gain since 2009.
Traders focused on the US employment figures, which outweighed the concern expressed by the ECB President who said there are downside risks to the eurozone growth prospects, citing weaker domestic demand, increasing commodity prices and slowing export growth.
The German market ended higher, rebound towards all-time highs again. The index is up around 21% for the year, but valuations are at their highest levels since 2009, which has promoted some profit taking earlier in the week.
The London market rebounded off six weeks lows, as the UK the BoE left their rates at a record low of 0.5% and government officials raised their forecast growth rate for 2013 to 1.4 percent (up from 0.6 percent redacted back in March) and now expect the UK economy to grow 1.8 percent in 2014.
For the session the German DAX 30 closed up 0.8% at 9,172, the UK the FTSE 100 closed up 0.8% at 6,551, the French CAC 40 closed up 0.7% at 4,129, while the Spain market closed 0.1% 9,400.
Asian stock markets ended lower again, recording their biggest fall in four months, but Japanese stocks bucked the regional trend. The MSCI Pacific Index fell -1.7% last week. The index is still up 8% for the year.
The Chinese market edged lower again trading down -0.8% for the week, with the selling led by the coal and telecom companies, while the financials traded lower ahead for the US NFP report, but the index remains around three month highs. The Hong Kong market ended flat, again holding below the 24,000 level, backing off its highest level since April 2011.
The Japanese market has been strong, even though it saw some profit taking last week, which triggered its largest two day drop in four months, but it remains around its highest level since December 2007.
For the session the Chinese Shanghai Composite closed down -0.4% at 2,237, the Hong Kong Hang Seng closed up 0.1% at 23,743, and the Japanese Nikkei closed up 0.8% at 15,299, while the South Korean KOSPI closed down -0.2% at 1,980.
The Dollar Index was higher 80.3 on a lower Euro, and the Aussie Dollar closed higher at US91.3c. Commodities prices were higher.
Overnight the COMEX WTI Crude for DEC13 delivery closed up 0.3% at $US97.65, the COMEX Copper for DEC13 delivery closed up 0.6% at 3.248, the COMEX Gold for DEC13 delivery closed down -0.2% at $US1,229.00.
ASX News Today
ANN – Ansell Limited issued 18.2 million fully paid ordinary shares at an issue price of $18.50/share to institutional and professional investors under the institutional placement announced on 26 November 2013.
BHP – Potash Corp is cutting more than 1,000 jobs, about 18 percent of its workforce, because of slumping demand for potash and phosphate, two key fertiliser ingredients.
BXB – The Federal Court of Australia has approved a scheme of arrangement for the split of the Brambles pallets and documents management businesses.
CSL – CSL the blood products and vaccines developer, has granted US firm Janssen Biotech a licence to develop and commercialise its treatment for acute myeloid leukaemia.
FLT – Flight Centre shares sold off after the ACCC consumer watchdog won a price fixing case against it in the federal court.
NEC – Nine Entertainment Co has made a subdued debut on the ASX down -3.4%.
NUF – Nufarm shares fell after Credit Suisse downgrade the stock to neutral (from outperform).
QAN – The Standard and Poor’s ratings agency, has lowered Qantas’s credit rating for airline to BB+, which is considered below investment grade. Qantas share were punished last week, after it said it expects to to cut 1000 jobs and post a half-year pre-tax loss of between $250 million and $300 million for the six months to end-December.
QBE – QBE Insurance Group will return from a trading halt after a company up date release.
ASX – to open higher
US & UK/Europe – higher
US ADRs – Broadly higher!!…
ANZ +0.8%, NAB +0.6%, NWS -0.1%
AWC +3.3%, BHP +1.4%, RIO +1.4%, NEM -0.8%
By Michael Hevern
D2MX Investment Advisor
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