Presented by Michael Hevern
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Good Morning and Welcome to Cube Wrap on Thursday, the 28th of August, I’m Michael Hevern for Cube Financial.
The information provided within this presentation is general advice only and you should consult the services of a financial professional in order to ascertain whether the information is applicable to your investment strategies and risk profile. Again, it is general advice only.
Well the DOW has seen to hold support overnight with good US data listing financials. Also the oil price listed on the back of Hurricane news in the Gulf of Mexico. We saw the DOW up 0.8% and similarly up 0.8% whereas the NASDAQ was up and slightly more at 0.87%. It was at light variance, but the better than expected durable goods orders, figures, were well received and energy stocks were up on the back of higher oil prices.
Tesoro and Valero energy were 11% and 4% respectively and the corresponding oil price sensitive stocks were down such as the airlines, American Airlines down 2.7% and United Airlines down 11% on the session, Citigroup cut the forecast for American Airlines going forward sighting higher fuel costs and more expensive and smaller margins in the airfares.
We saw a July durable goods jumping 1.3%, there was ahead of expectations. Fannies still in the news with selling off debts, it sold off another 1 billion dollars worth of 3 month bills overnight, which was seen as good. There is still a turn more on the financial sector with Deloits cutting there workforce by 2% that’s in the US and there was also a note in the press there saying that a program that was acted by the government to help auto makers with fuel efficiency maybe seeing and may come to pass as being a bale up by the government for the private sector to help the auto industry going forward.
We saw NASDAQ up on the night, set up 0.87%. We saw Apple up 0.6%, Microsoft up 1%, and Cisco up 1% on the session. Still trying to hold support there, but it needs to break that weekly high in order to show confirmation there.
The FTSE looks quite good actually up on the session on thin volumes though and it was on the back of high commodity process and the financials finally finding a bit of support.
We saw stocks such as BP show BP Group all up between 1.8% and 4.7% on the session while the big miners such as RIO, BHP, and Xstrata between 1.3% and 4.2% on the session and the banks had the modest gain up around between 0.2% and 2.8% on the session. So all in all pretty good there, looks like it wants to breakthrough that monthly or 6 weeks high there and it would need to be done with increasing volume, but time will tell to see whether that has come to pass. We saw the FTSE up 1.1%. The CAC and the DAX were flat for the session.
In Asian markets, we saw NIKKEI still holding that weekly support level, only tentatively though, the biggest over there was the fact that the autos productions have jumped ahead of expectations with July figures for Toyota and Honda up 10% and 18% respectively while recent sales have increased 27% year on year. So a good thing for the exporters there, and a good thing for auto industry in Japan.
Elsewhere in Asia, we saw Hong Kong jump after the China mobile released their results and Hong Kong shares were up 1.9% on the session while the Chinese shares were down 0.3% on the session.
Oil the big story overnight, jumping up to have any 119 dollar level, so significant move is on the back of the expected disruptions due to the Gustav Hurricane in the Gulf of Mexico. It has set down a lot of platforms there and time will tell us to see whether kind of what disruption that Hurricane reaps, but the trade is obviously suspecting that it will disrupt supplies going forward. Gold up 830 dollars. US dollar was slightly down on the Euro, but on the fact that oil price spiked, we saw gold up.
Most of the base metals were up as well. We saw copper up 1%, lead up 11% big move overnight, zinc up 3.4%, and aluminum flat for the session, nickel up nearly 5%. The lead was up on the back of falling inventories and the fact that China has month on month productions has reduced. I guess that is to do with disruptions due to the Olympics.
Out markets just fell the 5000 mark. I think this is 1 or 2 points inner on the close. The SPI overnight is slightly up 53%, so we seeing a positive lead there and financiers are likely to recover slightly on the back of the recovery in the overseas markets on the financial sectors. We see Woodside first half profit was 67% up that is the forecast going forward though mixed.
JP Morgan came out with a raised target on 71 dollars, whilst credit risks came out with cut in forecast 60 to 50, but so this mixed news on this going forward.
We saw that across the coal increased in earnings in the next year. Production was down 12% on the session on the reporting period, but profit was up 30%, that was in line with forecast, but we can see there that they are expecting quite a considerable move in earnings for share going forward that is on the back of high coal prices.
Westfield reported yesterday with profits up 15%, was fairly incredible given the state of turmoil in the credit and real estate markets and they are also requesting forecasting earnings of 5.5% going forward and also rejected rumors that they are looking to rise comfortable at the moment.
NIKKEI was the big news yesterday with UBS downgrading the forecast down to 48 dollars and subsequently Macquarie was sold down 10% on the session. As hedge funds stepped in to rub salt into the wounds there. We have reporting on AMP Babcock and Brown, Capital, Macarthur Coal, Origin and Centel today with quite a number of stocks reporting tomorrow as well. Expect the ASX to open up today lead by financials and the big miners will also assist in the move today with BHP and RIO up around about 1.6% on the ADRs overnight.
The gold stocks index in the US were up 2.3% and the oil stocks index was up 1.6% on the US markets, so you could see that we should expect supporting in those areas as well.
Should you have any questions about the information provided within this presentation, please call the equities and options desk or the CFD advising desk on the numbers provided, and trade carefully.