* US stock markets backed away from record levels, consolidating recent gains but trading volumes remain at the lowest level for six years.
* European stock markets finished at one month highs, recording their first monthly gain since May. The ECB meets this week.
* Asian stock markets recorded their first monthly fall since April, as declining miners weighed.
* Commodities prices mixed. Gold prices eased to US1,287, while crude-oil rose above $US94. Copper rose to US3.16c, Iron Ore price fell to $US87.30, two year lows.
The Australian sharemarket has finished down -0.1% for the month of August, as the earnings season comes to an end with an overall solid performance. The ASX200 closed at 5625, as companies that announced return of capital and higher dividends were well rewarded by investors, but stocks with exposure to commodities, especially iron ore have been sold down in August.
The ASX 200 has found it difficult to push through the 5650 level, as the earnings season and the dividend season continued. The miners and energy stocks are weighing on the markets, due to the surging US dollar which is having a detrimental effect on commodity prices. The crude oil price is at seven month lows around $US94, the iron ore price is at two year lows around $US88, the Gold price is still below the $US1300 level and the Copper price is pulling back to a key pivot level.
The SPI 200 futures fell -0.1% to 5,613, giving a subdued lead for the ASX market today, as the the US and Europe rounded off a solid August performance. The 5620 level will be key for the ASX200 today. The Australian dollar eased to US93.0c. Expect a quiet day today ahead of a busy week for economic data.
US stock markets close the month at record levels, consolidating recent gains, but trading volumes in the past week have been the lowest in six years. The US break for the Labor Day holiday tonight.
The three benchmark indexes all finished up 0.3% for the session, rising in 12 of the past 16 sessions. The S&P500 closed rebounded back above the 2000 level for the weekly close above that level on record. The S&P 500 rose 1.7% for the month the biggest monthly gain since February. The Nasdaq finished the month at fourteen year highs. The Mid-caps and Russell small caps rose 4% in August. The VIX has fallen 30% in the past month at 12.0.
In economic news last week US GDP expanded more than forecast, rising to 4.2% thanks to the biggest gains in business investment in over two years, while US existing home sales came in better than forecast for July. However US consumer household purchases unexpectedly fell -0.1% in July (down from a 0.4% rise), the first fall in six months.
Eight of the ten S&P500 sectors finished higher, the Utilities sector led up 0.7% after bucking the trend again all week. The Financials, Tech and Energy sectors all rose 0.6%. Crude oil held above its seven month low this week. The Nasdaq Bio-tech index is at its highest level on record, up 15% for the month. The US earnings season is complete with the S&P500 stocks, showing 7% on year growth.
There is a busy week ahead for economic data this week with ISM leading economic readings, Auto Sales and culminating in the NFP Monthly jobs report on friday.
For the session Dow Jones closed up 0.3% at 17,098 the S&P500 up 0.3% at 2,003 and the NASDAQ closed up 0.4% at 4,580, while the 10-year Treasuries eased to 2.34%, around twelve month lows.
European stock markets finished at one month highs, recording their first monthly gain since May. The ECB meets this week.
The Stoxx Europe 600 rose 0.3% for the session, rising 1.6% for the week, up 1.8% for the month. The index is still up around 6% from its five month low, hit in early August. The earnings season is complete so traders are looking for additional new catalysts to support the recent rises in stock prices, and are looking to the ECB to address near-term deflation. Traders are speculating the ECB will be introducing QE by the end of the year.
The German market rose 1.9% for the week, as it pared earlier gains, as unemployment figures disappointed, on top of a fall in German consumer confidence and troubles between Russia and the Ukraine continued to simmer. German unemployment unexpectedly rising at 6.7% in August, as the economy shrank last quarter.
The London market hovered around seven week highs, rising a third week up 0.7% and up 1.3% in August. In the session retailers weighed after Tecso disappointed. The index is still up 4% from its August lows.
For the session the German DAX 30 closed up 0.1% at 9,470, the UK the FTSE 100 closed up 0.2% at 6,820, the French CAC 40 closed up 0.3% at 4,381, while the Spanish market closed up 0.1% at 10,729.
Asian stock markets recorded their first monthly fall since April, as declining miners weighed.
The MSCI Asia Pacific Index fell -0.1% for the session, down -0.3% for the week and down -0.6% for the month. Equity valuations had reached their highs for the year, as traders bet on the accommodative stances from central banks will continue, but investors are profit taking near-term.
The Chinese market rebounded on news that investors are pouring into the largest Chinese exchange traded fund at levels not seen since 2012 (net inflows up 25%) as traders bet in Chinese stimulus to pump up the economy. Chinese industrials reported profits rose 13.5% in July (down from 17.9% in June), rising at the best pace since last September. The index still up around 8% for the year and has rebounded 11% since the mid-March lows.
The Japanese market retraced on the back of a higher yen, as core consumer prices increased an annualised 3.3% in July. The index fell -0.6% for the week and recorded its first monthly loss in four months, down -0.9% for the August.
The Hong Kong market held below 25,000 again, as its biggest three session pullback in three weeks, was pared by a rush in being late in the session. The index is still up 20% from its March low, but is still 45% below its pre-GFC highs.
For the session the Shenzhen Composite up 1.7% to 2,338, the Hong Kong Hang Seng closed down -0.1% at 24,742, and the Japanese Nikkei closed down -0.2% at 15,425, while the South Korean KOSPI closed down -0.4% at 2,069.
The Dollar Index rose to 82.75 (back at its highest level for a twelve months) on a lower Euro, and the Aussie Dollar eased to US93.0c. Commodities prices mixed.
Overnight the NYMEX WTI Crude up 0.8% to $US95.30, the COMEX Copper closed up 0.3% at 3.16, the COMEX Gold closed down -0.2% at $US1,287.40.
ABC – Adelaide Brighton says the restructuring of cement operations has contributed to its fall of -16% in half year profits.
GXL – Greencross the Veterinary services and pet products provider raised sales in all of its businesses last financial year and plans to open more new stores and expand its vet business in the current year.
HVN – Harvey Norman expects the strengthening housing market to boost its business, after achieving sales and profit growth in the past year.
NAB – National Australia Bank will float its US subsidiary Great Western Bank as it looks to focus on its core Australian and New Zealand operations.
NST – Northern Star Australia’s second largest gold miner plans to triple its exploration budget to $50 million as competitors cut back spending.
QAN – Qantas shares continue to soar after the airline announced an upbeat outlook for fiscal 2015, even after it posted its worst ever loss of $2.8 billion on Thursday.
PPT – Perpetual says stronger share markets and cost cutting have contributed to 34% growth in wealth manager’s annual profit.
PRT – Prime Media the regional broadcaster says advertising conditions remain tough after achieving a small lift in annual revenue.
RHC – Ramsay Health Care, Australia’s biggest private hospitals operator, says it has delivered its best financial results since listing on the Australian share market.
TSE – Transfield Services the maintenance and asset management firm has returned to profit and expects its positive momentum to continue its shares surged 24% higher.
VAH – Virgin boss John Borghetti has been unable to guide the airline to profitability for the year ahead after the airline announced its losses had blown out three-fold to $355 million.
WOW – Woolworths is taking mounting losses from the rollout of its Master’s hardware business in its stride as it continues to lift the performance of its supermarkets and liquor stores. Its net profit rose 8.5% to $2.45 billion in 2014 as higher food and liquor margins offset wider than expected losses from home improvement and weaker earnings at BIG W.
ASX – to open higher
US & Europe – higher
ANZ 0.1%, NAB 0.9%, NWS -0.2%, STO -2.7%, WPL 0.6%
AWC 3.0%, BHP 0.6%, RIO 0.1%, NEM 0.9%
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.