* US stock markets finished flat for the session after paring early losses, as they consolidated recent gains thanks to better corporate earnings. Goldmans cut its rating on stocks to neutral for the next three months.
* European stock markets have eased again overnight, as earnings disappointed and violence escalated in the Gaza Strip and the Ukraine.
* Asian stock markets rose again yesterday, trading at new six years highs, on the back of speculation that the Chinese central bank will movie to add stimulus. Markets are expected to consolidate the gains today.
* Commodities prices eased. Gold prices rose to $US1,305, while crude-oil held below $US102. Copper edged to US3.243c.
The Australian share market finished flat on yesterday, with the ASX200 closing down -0.1% at 5577. Gold stocks recovered, while iron ore miners BHP, Rio and Fortescue all pushed higher after releasing their production figures last week.The big four banks have edged slightly higher. Stocks are attempting to consolidate recent gains this week after almost touching the 5600 level last week. The 5550 level is key near-term for the ASX200, after a subdued lead from overseas overnight.
ANZ has joined UBS in delaying the timing for an RBA hike, from the first quarter of next year to the second, as economists expect the central bank to tighten by 25 basis points in May, instead of February. Local investors are sharpening their pencils ahead of the reporting seasons which gets underway in the next couple of weeks.
The SPI 200 futures eased -0.1% to 5529, giving a subdued lead for the ASX market today, as traders the US corporate earnings season continues. The Australian dollar held at US94.0c on the back of Chinese data.
US stock markets finished flat for the session after paring early losses, as they consolidated recent gains thanks to better corporate earnings. Goldmans cut its rating on stocks to neutral for the next three months.
The three benchmark indexes all finished flat for the session. The Dow Jones and the S&P500 held around record levels after finishing flat last week. The S&P500 is up 7.1% for the year. Seven of the ten S&P500 sectors finished higher, led by gains in the Utility sector up 1.5%, The Materials sector rose 0.3%, while the Industrials and Staples fell -0.5%.
It is a busy week for economic data, with the Fed FOMC two day meeting and the monthly NFP employment report. Last week’s benign inflation figures, are seen to give the Fed some room on when they will have to raise interest rates. Overnight Markit Economics reported US service industry PMI stayed at 61 in Jul, while US pending home sales unexpectedly fell -1.1% in June (compares to a 6% gain in May).
The US earnings seasons continues. Of the S&P500 companies that have reported 79% have beaten on profits, 65% beat on revenues, while 66% beat sales forecast. Companies have reported second quarter profits have risen 11%, the fastest growth rate in three years. Analysts expect S&P500 stocks to report profits up 45%, earnings rose 6.2% and sales up 3.3% in the June quarter, according to Bloomberg.
For the session Dow Jones closed up 0.1% at 16,982, the S&P500 closed up 0.1% at 1,978 and the NASDAQ closed down -0.1% at 4,444, while on 10-year Treasury notes edged up to 2.49%.
European stock markets have eased again overnight, as earnings disappointed and violence escalated in the Gaza Strip and the Ukraine.
The Stoxx Europe 600 Index closed down another -0.2% for the session, after rising 0.7% last week, up for a second week. Trading volumes were down -20% below the monthly average. Across the region the automakers had the biggest declines, while the airliners provided support. Geopolitical tensions continued to weigh on sentiment, with the continuing violence in Ukraine and the breakdown of a cease-fire in Gaza over the weekend.
In earnings of the Stoxx Europe 600 that have reported 57% beat on profits and 51% beat on sales, according Bloomberg. In economic news eurozone we will see a plethora of data this week with CPI, GDP, Retail Sales and manufacturing data due for release.
The London markets retreated again overnight, as four stocks fell for every gainer. There are 27 FTSE 100 companies to report this week, including BP, Shell, Lloyds and Barclays. The German market continued lower. The earnings season is underway in Europe, but any good news is being tempered by the concerns of the geopolitics in the region and caution over the impacts if the EU limits Russia’s access to capital markets.
For the session the German DAX 30 closed down -0.5% at 9,598, the UK the FTSE 100 closed down -0.1% at 6,788, the French CAC 40 closed up 0.3% at 4,344, while the Spanish market closed down -0.1% at 10,879.
Asian stock markets rose again yesterday, trading at new six years highs, on the back of speculation that the Chinese central bank will movie to add stimulus. Markets are expected to consolidate the gains today.
The MSCI Asia Pacific Index was up another 0.2%, after rising 1.4% last week, holding at its highest levels in six years. The index has recorded a tenth weekly gain in the past eleven. In earnings of the corporates that have reported on the MSCI Asia Pacific Index since the start of July, 56% have beat on earnings.
The Chinese market jumped another 3%, building on recent gains, as traders speculated the government is accelerating measures to support the housing market and ahead of corporate earnings which continues to the end of August.
Profits at industrial companies in China rose 18% in June on year, the largest jump since September (up from 8.9% in May). Last week’s Chinese manufacturing data is confirming a “soft” landing for that economy, as the Chinese leadership cut bank reserve requirements and boosted spending on infrastructure. Chinese CPI figures are due out this week and will give a read on the consumer.
The Hong Kong markets finished higher again up to its highest level since mid-April and has entered into bull market territory after rise 20% . The Japanese market recovered again, as investors digest corporate earnings.
For the session the Shenzhen Composite rose 2.8% at 2,323, the Hong Kong Hang Seng closed up 0.9% at 24,216, and the Japanese Nikkei closed up 0.5% at 15,529, while the South Korean KOSPI closed up 0.7% at 2,048.
The Dollar Index edged higher to 81.00 on a lower Euro, and the Aussie Dollar held at US94.0c, edging up towards from its highest level since November. Commodities prices eased.
Overnight the NYMEX WTI Crude delivery down -0.1% at $US101.70, the COMEX Copper closed up 0.1% to 3.243, the COMEX Gold closed up 0.1% at $US1,305.80.
Last week the Chinese Gold Association reported a 19% fall in gold demand from January to June, as demand for gold bars fell 62% during in the first six months of the year and gold coin demand also fell 42%.
AZJ – The federal government has approved Indian mining giant Adani’s proposal to develop one of the world’s biggest coal mines in Queensland.
BCI – BC Iron has flagged a rise in its full year earnings, despite being hit by a slide in iron ore prices.
BLY – Boart Longyear the mining services company, says demand for its products has bottomed out, but warns analysts may be overestimating what the company will make in earnings in 2014.
HSO – Healthscope Australia’s second largest private hospital operator has gained over $200 million (of 5.2%) in value in a successful return to the share market. Its market cap is now $3.83 billion.
LEI – Leighton the construction giant has suffered a 20 per cent slide in first half profit after writedowns and restructuring costs offset an increase in revenue.
NAB – National Australia Bank has sold a piece of its British commercial real estate loans portfolio for STG625 million ($A1.14 billion).
NVT – Navitas the education provider says its full year profit fell over -30%, after writedowns to its university division overshadowed stronger revenues.
QAN – Qantas has no plans to stop flying over Iraqi airspace on its Dubai to London flights, based on its latest security assessments.
REA – REA Group the online real estate giant has acquired a large stake in a South East Asian property business for $106.3 million.
ASX – to open lower
US & UK/Europe – consolidated
ANZ -0.5%, NAB -0.5%, NWS -0.7%
AWC -1.2%, BHP -0.1%, RIO -0.3%, NEM 1.5%
By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email firstname.lastname@example.org.