Presented by Michael Hevern
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Good Morning and welcome to Cube Wrap on Thursday, 18th of September. I am 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, Dow had another meeting overnight, down 4% on the session with SP down, we’ve seen one of the biggest percent in stocks it has seen since 2001 treasury tax, and closing at lows back in 2005. We saw the Dow break the 1100 marks significantly and closing at 10600. We saw on the back of increasing queries about the financial sector in the US, even though the bank government has bailed out the AIG.
The investors are concerned about where is the next atom bomb and when will it explode. We saw the SP500 down 4.7% while it down trends down 4%. The Fed is actually trying to increase liquidity with selling 40 billion dollars with 35-day treasury bills and also offering 14-day and 28-day bills to try and freeze liquidity.
An another key story of the night was oil and gold and I’ll get to that shortly, copper fell to 8 months lows and the main concerns of global economic growth impacting their demand that the big banks of US also got sold off. Morgan Stanley and Goldman Sachs were sold down 24% and 14% respectively.
We saw in the NASDAQ squeezing there again trying to split up today, but it was down 5% finishing at just above 2098. All US majors are down 7% for the week and around about 20% for the year so there is a real change in all those markets. In the UK, we saw the FTSE down 2%, but did finish below 8000 and 4012 that is a 3-year low. It is also fairly broadly there. The biggest losers were the bank share again. There are around roomers that HBOS is in merger negotiations with Lloyds at the moment and that did not set up. The Royal Bank of Scotland was down 4.6% on the session and HBOS was down 10% in the UK on those roomers.
Weak metal prices BHP, RIO, and also resources were down between 1% and 10% on the session and Anglo-America was also down around about 10% despite speculation that they may be a bid in the offering the energy stocks sell off as well where the oil price was close around about 92 dollars in the UK trading session with BP shell and BG group all down between 1% and 2.5%. Surprisingly, the retailers had a big day with positives in the UK so there were Sainsbury’s and Morrison both up 2% and 4% on the session and Cisco up 4% and announced another also low cost range of products to try and fight back on the margins as they are loosing at the moment.
Elsewhere in Europe, we saw that CAC and the DAX were down 1.7% and 2% on the session, again the biggest drag is there were banks.
In Asian markets, we saw the Nikkei was actually up 1% and that was for the FTSE and UK traded. There’s the main catch up there or catch up for today. FTSE market was close up on the session, but there is a slight out of US dollar into Japanese Yen again on the carry trades so that may have something do to with that.
We saw other Asian markets, Hong Kong down 3.6% and Chinese shares down 3% on the session as Chinese banks were sold off on the back of rumors that the expectations at the latest rate cut with our margins against other major bankers. The big story of the night was gold and oil, oil on the back of reduced inventories due to the hurricanes that have been hitting the American content and it was up 6 dollar or 6% on the session finishing above 97 dollars.
We also saw the gold spiked as well that actually broke a key level at 800 dollar level with a vengeance up around that 9% on the session or 70 dollars so that should help the Australian gold miners today, finishing at 850 dollars.
The other commodities were down with copper down 1.7%, lead, zinc, aluminum all down around about 1.5% to 1.8% and nickel down 2.3% on the session so that is primarily those 2 key commodities with soft commodities also up with wheat and corn up around about 5% on the session, so it seems to be bit of fly of money into the commodities and in out market, we are set to see heavy falls around that.
The SPI is down 153. In the chart, you can see that we are looking to test 2005 lows now and we are into those levels of 2005 already. You see there that around about 4200 to 4300 level is the key level to look for support.
Elsewhere in our market, banks are likely to suffer the brunt of selling today and again Macquarie was sold off heavily yesterday as reports came out that they are going to fund it out to refinance their book, but they did come out and say there was no affect to the share price and expect to see some selling again today.
RIO and BHP will be down on the back of the ADRs. They were down 5% and 7% respectively and RIO is down 7% and BHP down 5% on the US trading session. With Australian Banks, ANZ and NAB down 11% and 15% on the session. You can expect energy stocks may be offer a little bit support and they did it. The energy stocks in US were down around about 3% on the session that there was in comparison to sell off 4% on other market. Newcrest may have some sort of bounce there so that he was one of the biggest gainers yesterday and is key support levels there. Newcrest is taking resistance level and may be breaking out today. Again, the weakening US dollar is likely to be the story going forward in the next 6 to 8 weeks yesterday and that seems to be unfolding with all the trade markets and well on the financial markets in the US. The US dollar is starting to be sold off there. We will open down done today and try the board-based selling off the stocks.
Should you have any questions about the information provided within this presentation, please call equities options desk or the CFD advisory desk on the numbers provided and as always trade carefully.