* US stock markets backed off new all-time highs on Friday, 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 had the biggest fall in a week, as earnings disappointed and violence escalated in the Gaza Strip and the Ukraine. Stocks were weaker late in the session.
* Asian stock markets rose again Friday, trading at their highest levels in six years. Markets are expected to consolidate the gains today.
* Commodities prices eased. Gold prices rose to $US1,302, while crude-oil eased to below $US102. Copper eased to US3.241c, while iron ore hit a one month low.
The Australian share market finished flat on Friday, after having risen for a fifth straight session with the ASX200 closing down -0.1% at 5583. Gold stocks have under performed last week, while iron ore miners BHP, Rio and Fortescue all pushed higher after releasing their production figures which impressed, the big four banks have edged slightly higher. Stocks will be attempting to consolidate recent gains this week after almost touching the 5600 level. The 5550 level is key near-term for the ASX200, after a negative lead from overseas on the weekend.
Local investors are sharpening their pencils ahead of the reporting seasons which start in the next couple of weeks.
The SPI 200 futures eased -0.1% to 5530, giving a negative lead for the ASX market today, as traders continue to focus on US the corporate earnings season and M&A activity. The Australian dollar held at US94.0c on the back of last weeks Chinese data.
US stock markets backed off new all-time highs on Friday, 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 down -0.5% for the session, as Amazon and Visa disappointed. The Dow Jones and the S&P500 backed off record levels and finished flat for the week, giving back gains from earlier in the week on the back of better corporate earnings and the benign inflation figures, which are seen to give the Fed some room on when they will have to raise interest rates. Fed Chair Janet Yellen has said that interest rates will remain low for a considerable time after the Fed completes its tapering.
The S&P500 is up 7.1% for the year. Eight of the ten S&P500 sectors finished lower, led by falls in the Consumer Discretionary -1.1%, Energy and Financials sectors down -0.6%, while the Materials sector rose 0.2%.
The US earnings seasons continues. Eleven S&P500 stocks reported Friday night and there were a total of 145 stocks to reporting last week. Stocks like Apple gained, Facebook jumped after saying sales surged over 60%, Under Armor jumped 15% on increase 2014 forecast profit, while disappointing results came from Amazon down -6% after reporting its biggest loss since 2012, CAT fell as profits fell short, D.R.Horton slumped -12% and Visa disappointed.
Of the S&P500 companies that have reported 79% have beaten on profits, 65% beat on revenues, while 66% beat sales forecast. 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 down -0.4% at 16,960, the S&P500 closed down -0.5% at 1,978 and the NASDAQ closed down -0.5 at 4,449, while on 10-year Treasury notes eased to 2.47%.
European stock markets had their biggest fall in a week, as earnings disappointed and violence escalated in the Gaza Strip and the Ukraine. Stocks were weaker late in the session on concerns that the EU is considering limiting Russia’s access to capital market.
The Stoxx Europe 600 Index closed down -0.7% for the session, but managed to close out the week up 0.7%, as bank held up across the region rising 0.7% to a three week high.
In economic news we will see a plethora of data this week with CPI, GDP, Retail Sales and manufacturing data due for release. German consumer confidence is expected to rise to its highest level since December 2006. Last week eurozone manufacturing and services PMI rose to 54 in July (up from 52.8), improving and indicating that the recovery is on a steady rise.
The German and London markets retreated on Friday, snapping three sessions of gains, as traders showed caution ahead of the weekend of geopolitics. The earnings season has begun in Europe. These markets finished flat for the week, as traders are speculated that global growth will not be impacted significantly, because of the current state of geopolitical unrest.
For the session the German DAX 30 closed down -1.5% at 9,644, the UK the FTSE 100 closed down -0.4% at 6791, the French CAC 40 closed down -1.8% at 4,330, while the Spanish market closed up 0.3% at 10,888.
Asian stock markets rose again Friday, trading at their highest levels in six years as overseas markets gave a positive lead and on the back of improving Chinese data. Markets are expected to consolidate the gains today.
The MSCI Asia Pacific Index was up 1.3% for the week, holding at its highest levels in six years, on the back of Chinese manufacturing data which is confirming a “soft” landing for that economy. The index has recorded a tenth weekly gain i the past eleven. In economic news last week Chinese manufacturing data which rose to an 18 month high in July as the HSBC Flash PMI came in at 52 (up from 50.7) and reaffirming that the government is on track to meet its 7.5% 2014 growth target.
The Hong Kong markets finished higher again up to its highest level since mid-April. The Japanese market recovered, as the BoJ is calling on the government to introduce measure to improve Japanese growth, after disappointing trade figures.
The Chinese market jumped another 1%, 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. The eleven companies that are listing last week did not have the detrimental impact on the broader market that was feared.
For the session the Shenzhen Composite rose 1.1% at 2,260, the Hong Kong Hang Seng closed up 0.3% at 24,216, and the Japanese Nikkei closed up 1.1% at 15,457, while the South Korean KOSPI closed up 0.4% at 2,033.
The Dollar Index edged higher to 81.03 on a lower Euro, and the Aussie Dollar rose to US94.0c, edging up towards from its highest level since November. Commodities prices eased.
Overnight the NYMEX WTI Crude delivery down -0.2% at $US101.90, the COMEX Copper closed down -0.8% to 3.241, the COMEX Gold closed up 1.0% at $US1,305.20.
BUX – Buxton Resources shares have surged nearly 40%, after it released drilling results from its Western Australian graphite project.
DLS – Drillsearch Energy the oil and gas explorer will use the record revenue generated in the last year to boost production and develop its shale assets.
GUD – GUD Holdings the household products supplier says annual profit has fallen by nearly -44%, but the company expects a better result in 2015.
IAG – Insurance Australia Group says lower than expected natural disaster costs have helped it exceed its own performance forecasts.
MQG – Macquarie Group has reported a disappointing first quarter result and delivered a relatively upbeat profit outlook for 2015.
NCM – Newcrest has beaten its annual gold and copper production targets, but warns it is facing a hit of up to $2.5 billion after reviewing its mining assets.
SIR – Sirius Resources the nickel explorer is a step closer to funding a $470 million West Australian project.
TLS – Telstra plans to send 670 Australian jobs to Asia as part of plans to expand in the region and has told staff that it will begin outsourcing roles to partners in Asia from September.
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.