* US stock markets held at record levels, consolidate recent gains but trading volumes at the lowest level since early July.
* European stock markets consolidated overnight, after a couple of strong sessions.
* Asian stock markets rose on the back of positive US data and better earnings.
* Commodities prices fell. Gold prices held at US1,285, while crude-oil held near $US94. Copper fell to US3.193c, Iron Ore price fell to $US88.20.
The Australian sharemarket closed up 0.2% to 5651 a new six-year closing high yesterday, as a number of stocks held their dividends (Santos, Woodside) and the banks saw some buying ahead of equities options expiry today. Corporate remain the focus ofor investors (see ASX. The Financials and Materials sectors rose 0.6% for the session.
Local investors are looking at those companies reporting earnings today: Adelaide Brighton (ABC), Paladin (PDN), Mac Atlas Roads (MQA), Perpetual (PPT). Qantas has reported a loss of $2.8 billion after major writedowns.
The SPI 200 futures fell -0.3% to 5,615, giving a negative lead for the ASX market today, as the the US and Europe eased overnight. The 5640 level will be key for the ASX200 today. The Australian dollar rose to US93.3c. Remember options expiry today.
US stock markets held at record levels, consolidate recent gains but trading volumes at the lowest level since early July.
The three benchmark indexes all finished flat for the session, after rising level of the past fourteen sessions. The US market is benefiting from a flight to safety, on the back of optimism that central banks will remain accommodative and the economy continues to improve. The S&P500 held at the 2000 level. The Nasdaq is trading at fourteen year highs.
All ten S&P500 sectors finished in the flat, with the exception of the Utilities sectors which rose 1.1.% for the session. Crude oil held above its seven month low. The Nasdaq Bio-tech index remained at its highest level on record and has now risen over 20% from its February lows.
The US earnings season is complete with the S&P500 stocks, showing 7% on year growth. Of the S&P500 companies reported 75% have beaten on profits, 65% beat on revenues, while 66% beat sales forecast, according to Bloomberg.
For the session Dow Jones closed up 0.1% at 17,122 the S&P500 flat at 2,000 and the NASDAQ closed flat at 4,569, while the 10-year Treasuries eased to 2.36%, around twelve month lows.
European stock markets consolidated overnight, after a couple of strong sessions. Russian and Ukrainian talks are progress, but traders were cautious after reports that the ECB May not by introducing QE in its next September meeting.
The Stoxx Europe 600 rose another 0.1%, building on the 1.8% gains from the prior two session, to reach a one month high, as investors celebrated the ECB posture on a QE program by the end of the year. The index has now risen nearly 6% from its five month low, hit in early August, as geopolitical concerns have eased and the possibility of deflation near-term gives the ECB room to add stimulus to the eurozone.
Earnings of the Stoxx Europe 600 that have reported 57% beat on profits and 51% beat on sales, according Bloomberg. The earnings season is complete so traders are looking for additional new catalysts to support the recent rises. Across the region the Telecoms were in focus on the back of M&A activity.p, while Airline and Travel stocks were strong. The banking sector heeled on to gains on the back of the speculation over the ECB asset buying program.
ECB President Draghi has identified that the eurozone economy is faltering and called for governments to do more to help the eurozone. Inflation is at five year lows and falling inflation is a drag on economic activity as companies, consumer and investors withdraw spending in anticipation of lower prices in the future.
The German market eased, after rising 2.6% rise of prior two session. Traders reacted to the fall in German consumer confidence to 8.6, however discussions continued between Russia and the Ukraine and a negotiated peace has been reached over the Gaza Strip. The London market held at seven week highs.
For the session the German DAX 30 closed down -0.2% at 9,569, the UK the FTSE 100 closed up 0.1% at 6,830, the French CAC 40 closed up 0.1% at 4,395, while the Spanish market closed up 0.1% at 10,837.
Asian stock markets rose on the back of positive US data and better earnings.
The MSCI Asia Pacific Index rose 0.3% for the session, just 1% below its six year highs. Across the region the Tech and Auto companies provided support. Equity valuations have reached their highs for the year, as traders bet on the accommodative stances from central banks will continue.
The Chinese market rose for the first time in three sessions and is still up over 8% for the year and has rebounded 11% since the mid-March lows, on the hopes that the central bank will be prompted to add stimulus. There are ten companies that will IPO this week, which will drain liquidity from the equities market in the short-term.
The Japanese market was flat, as discussion continue over the nation’s ballooning energy bill, since its 48 nuclear reactors have been shutdown since the 2011 tsunami and Fukushima plant disaster.
The Hong Kong market fell below 25,000, recording its biggest two session pullback in three week, but the index is still up 20% from its March low. Casino stocks weighed after Morgan Stanley downgraded revenue projections for Macau.
For the session the Shenzhen Composite up 0.2% to 2,327, the Hong Kong Hang Seng closed down -0.6% at 24,918, and the Japanese Nikkei closed up 0.1% at 15,534, while the South Korean KOSPI closed up 0.3% at 2,074.
The Dollar Index fell to 82.46 (backing off its highest level for a twelve months) on a lower Euro, and the Aussie Dollar rose to US93.4c. Commodities prices fall.
Overnight the NYMEX WTI Crude up 0.1% to $US93.88, the COMEX Copper closed down -0.6% at 3.193, the COMEX Gold closed down -0.1% at $US1,283.50.
BCI – BC Iron the Pilbara miner, WA has shrugged off falling iron ore prices to record a 51% increase in profit amid strong sales.
BLD – Boral reports net profit up nearly 200% and says housing market recoveries in Australia and the US should help it go from strength to strength after the building products maker swung back into the black.
FLT – Flightcentre the travel agency reports profit down 16%, but expects to grow its pre-tax profit by up to 8% over the next 12 months despite taking a hit from cheaper airfares and a downturn in consumer spending following the federal budget.
HSO – Healthscope Australia’s second largest private hospitals operator, says all its businesses are performing strongly, and its hospitals division has strong growth opportunities.
LLC – Lend Lease reports profit up 50%, and says it wants to win more work overseas, thanks to the sale of its interest in a major UK shopping
FXJ – Fairfax and Media giant Nine are taking on the likes of Netflix with a new a $100 million online video streaming service.
SWM – Seven West Media the TV, magazine and newspaper company has returned to profit, making $149 million profit in FY14 helped by cost cuts and improved television earnings.
SVW – Kerry Stokes’ media and industrial services company Seven Group has been hit by the mining downturn, causing a -46% drop in annual profit.
WFD – Westfield Corporation the Shopping centre giant has raised operating income from its shopping centres around the world by more than five per cent in the first half of 2014.
WHC – Whitehaven Coal has declared victory over the protesters trying to halt its new mine, saying it could be selling coal from the project sooner than planned.
WOR – WorleyParsons’ the mining services company full year profit has fallen -23% to $249 million as it tries to improve margins.
ASX – to open lower
US & Europe – consolidate
ANZ 0.5%, NAB 0.6%, NWS 0.2%, WPL -0.5%, OSH 0.3%
AWC 0.4%, BHP 0.7%, RIO -0.5%, NEM 0.1%
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.
Reporting this week:
Friday: Harvey Norman (HVN) Perseus(PRU) Virgin (VAH), Woolworths (WOW).