Presented by Michael Hevern
Cubefinancial
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Good Morning and Welcome to Wrap for Thursday, 16th of October. 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 had another watershed day overnight over 8%. Almost half of that happened in the last hour or trading, went through an 800 point trading range here again, so the volatilities that recorded high still. We saw there were concerns about the credit defaults going forward and how that will be funded. They are talking about that market paying in the order of over 45 trillion dollars. The DOW has moved in triple digit figures 20 days at last 23. So, that is why the weeks’ volatility index is sky high. We saw that they had mentioned the up recession intimating that recession becoming more likely in the US economy. The fact eBay reported that it was down.
We saw in the NASDAQ, down 8.5% testing all three lows and yesterday which encountered 4 lows. So we can the volatility there as well for earnings going forward and slowing economic growth globally which just expand on Hi-Tech companies.
This is a weekly chart there. So, you could see that current lows are testing those 2003 because we on interest for our market. The ADRs for BHP and RIO down 70 and 20% respectively.
The energy stocks were up and they were down 12.5% to 14% for Chevron and Exxon respectively. Also saw the insurance groups get hammered as well with American International Group down 13%. Alumina was down 10.5% and in the last episode Apple down to 6%, Microsoft down 6% and Cisco down almost 11% on the session exceeding the pretty broad based selling across the board.
The gold stocks index was down to 13% and oil stocks index was down 15% on the session. Key stories in the US include Ben Benarke saying that they are using all tools available to try and stabilize the market at the moment, lightening the experiences in the financial market back to 30s. Base book came up overnight and indicated that the US economy is falling and that so the market fall off.
US retail sales dived in September down by 1.2% and persistent price index fell in September as well down 4 although it surprises. We saw selling across the board, JP Morgan chase actually reported a plunge of 84% in their earnings in the third quarter with stock earning with 1.2% on the session. Coca cola actually rose 3.5, Mintel down 2.6% after reporting a strong profit report.
In the UK, we saw that market down 7% on the session. Miners and Energy leading their way down. Banks also way down the market, unemployment supported at being 8 year high in the UK and so obviously that market economy is lying as well the data is starting to support that. We saw FTSE 100 down 300 point on the session which equates to 7% that’s a fair chunk of 12% rebound that we saw last week and we also saw the index last week plummet 21% for the week.
Stocks like RIO include report was speaking to the share holders yesterday morning of the slowing Chinese mark going forward and said that the stocks were down for the Miners down between 16% to 20% for RIO, BHP low and Xstrata. The BP, Shell and BG group all talking between 7% and 12% on the session on a low crude oil price fell another three dollars. HBOS is almost one of the few stocks in the grain yesterday for the FTSE up 0.5% and top scoop was the other stock up 1.2%. Insurers were sold off quite heavily with out mutual prudential and standard life all falling between 18% on the session.
Recession is seen to be dominating the stocking of the investors in the UK and confirmed with the biggest jump in unemployment figures for 17 years. As I said there the unemployment level is at 8 year highs. Elsewhere in Europe, we saw their stocks in market to fall as well with the DAX down 6.5 and the CAC down 7% on the session.
In Asia, we saw Nikkei up against hand of the other market, it was up 1%, but on show that will be fully reversed today as the investor over there were looking to pick out up defensive stocks. So, export is down with Sunny and Honda down 4% and 5% respectively and elsewhere in Asia, we saw Hong Kong down 5% and China down 1% on the session.
In the commodities market, we saw oil drift down to close to the lows and just below 74 dollars. You can see that there is a good support trend line there, which would indicate that there might be some support around 70 dollar mark and you can see support there and the first level of resistance will be around about that 80 dollar mark and then 85 and will have to trade above 85 for significant period in order to reverse the current sell off.
Gold was found in the few price metals, it was up at 9 and it closed at over steady at 845 for that session, so up about 6 dollars that session there. We saw waste metal were gently down with silver down 7%, restrictions down 5.5%, copper down 7%, lead down 8%, zinc down 7% and aluminum down 5%. So, that is the reason why the big miners were hit so heavily with pullback in all the waste metals overnight.
We saw in the ASX were likely to follow the US and, however, we would like to test the lows of last week just about that. The SPI was down over 300 points overnight at 6% down. The news in the ASX today we saw that reporting the third quarter result, Rio warned of a slowing economy yesterday when they spoke to the shareholders, cannot report their annual results, and it is mainly slightly to be down and they have a sell off heavily, so you would expect for the selling in that stocks. The CFO is likely going to address a chamber of commerce with the session on the Rio’s place in the Australian Freight market. Just to talk about cash and how important it is in these stocks. On Friday, we saw a quite a number of miners trading below their cash balance and some were even up to 20% discount, to that figure Looking for some bargain there maybe you should have a look and if you buy a stock below the cash index that’s generally pretty good. Generally, pretty good indication of rate and that is what slipped off this as well and growth going forward. ASX will open lower and expect a broad based selling today. But, for those who are brave, if we do test those lows of last week we may overshoot that so if we can test it that would be good but it’s not for the faint hearted.
The information provided within this presentation, should you have any questions about it, please call the equities and options desk or the CFD advising desk on the numbers provided, and as always trade carefully.
