Online Stockmarket Trading Update

Stock Market Analysis

Caution Ahead of U.S. ISM and Employment Reports

U.S. and European stocks fell overnight. Reports on U.S. consumers spending and house failed to inspire investors, as the U.S. trading volume was the lightest for the year. Commodity prices were continued higher as investors looked to add risk to their portfolios.

The ASX will follow overseas leads lower, but their is plenty of enconomic data to digest throughout the day.

The SPI Futures is below the key level of 4400 the ASX is set to open lower as the SPI Futures closed down -1.2% (or -54 pts) at 4,392. The key levels for our index today are 4450 and 4350. M&A activity continues to drive specific stocks. Expect to see our market trade lower as the earnings season comes to an end (see below). We have busy data for economic reporting with the RBA releasing GDP data and the financial aggregates data for July, and the Australian Bureau of Statistics (ABS) issuing retail trade data, building approvals, and data on Australia’s international investment position, all for July, and Australia’s balance of payments and government spending data, both for the June quarter.

US Markets

U.S. stocks traded lower despite the growing deal activity. Concerns over a faltering economic recovery overshadowed data showing a rise in consumer spending and income, as the Commerce Department reported Consumer spending for July roses 0.4%, but their incomes increased less than expected (up 0.2%). This confirms Americans are spending a little more this northern summer, but hardly enough to jump start the weakening economy. U.S. home purchase prices rose 3.1% in the 2Q, and 13% annualised rate, but prices will come under pressure as first-time home-buyer tax credit incentives are no longer available. Elsewhere, business conditions in Texas-area August manufacturing production remain in contraction, as production stayed almost flat and employment worsened. The selling was broad-based with Mining, Energy, Consumer Discretionary and Financial sectors all down over 1.5%. On the NYSE declining stocks outnumbered advancing ones by 7 to 2, while on the Nasdaq the ratio was 4 to 1. The key data this week will be U.S. unemployment on Friday night. The Dow closed down -1.4% (or -141 points) at 10,010, while in the broader market the S&P 500 index down -1.5% (or -16 points) at 1,049 and the tech-heavy Nasdaq ended down -1.6% (or -34 points) at 2,120.

European Markets

European stock markets closed lower, in light trading. London markets were closed. The European Commission reported, economic confidence in the 16 EU countries rose to its highest level in nearly two and a half years during August. This report suggests that the euro-zone recovery remains on track, with the economic sentiment indicator continuing to improve in August, rising to 101.8, after a surge in July. BHP’s hostile $US39 billion bid for Canada’s Potash Corp is still the only one on the table. In London the FTSE 100 index was closed at 5,202, the German DAX down -0.7% (or -39 points) at 5,912, while in France the CAC was down -0.6% (or -22 points) at 3,487.

Asian Markets

Asian markets traded generally higher. Japanese shares rose as much as 3.2% but ended well off the day’s highs as traders were disappointed by the Bank of Japan’s new easing measures aimed at addressing their depressed economic recovery and a high yen. The Yen continued to rise as markets want policymakers to do more. Chinese shares rose after investor confidence in the durability of the global recovery was boosted by Fed’s promise to take action if the U.S. economy falters. But monetary policy remains in a tightening bias, as the Ag Bank of China said it has temporarily suspended property market loans to counter a surge in real-estate lending, but insisted the country’s property sector was “healthy.” In China the SSE Composite closed up 1.6% (or 42 points) at 2,653, while in Hong Kong the Hang Seng Index was up 0.7% (or 140 points) at 20,737 and in Japan the Nikkei 225 Index was up 1.8% (or 158 points) at 9,149.

Commodities

The Dollar Index up 0.3% at 83.17 on lower Euro, while the Australian Dollar last traded higher at 89.14. Commodities were generally higher.
US wheat prices jumped 5 per cent. Oil prices fell. The benchmark crude NYMEX for September delivery was down -0.6% (or $US-0.47) to settle at $US74.08. Copper prices bounced off monthly lows, Copper for September delivery delivery was up 1.5% (or 5.0 cents) at $US3.3900. Gold prices are above key $US1,200 level, with December gold was up marginally 0.1% at $US1,236.90.

Key News International Drivers Today

US – Rise in consumer spending and income tepid. Companies continue to report earnings this week.
EU – economic confidence in the 16 EU countries at 2-ana-a-half year highs.
CHINA – Government stands firm on access to credit, falls led by real estate and steelmakers.
JAPAN – BoJ applies new easing measures. Companies continue to report earnings this week.

Markets Overview

Caution Ahead of U.S. ISM and Employment Reports

SPI: Below key Level 4400 – SPI down 1.2% at 4,392….

ASX News Today

The SPI Futures is below the key level of 4400 the ASX is set to open loweer as the SPI Futures closed down -1.2% (or -54 pts) at 4,392. The key levels for our index today are 4450 and 4350. M&A activity continues to drive specific stocks. Expect to see our market trade lower as the earnings season comes to an end (see below). We have busy data for economic reporting with the RBA releasing GDP data and the financial aggregates data for July, and the Australian Bureau of Statistics (ABS) issuing retail trade data, building approvals, and data on Australia’s international investment position, all for July, and Australia’s balance of payments and government spending data, both for the June quarter.

AJL- AJ Lucas Group posted a full year loss (of $7.3 million), Revenue fell 28.2%, and replaces senior management after a “disappointing” year of “uncertainty and project delays”.

ALD- Allied Gold posted a 244 percent profit rise (to $10.3 million), after substantially upgrading the value of its Solomon Islands project.

AMC- Amcor posted a 13.6% full year loss (of $183 million), due to the Aussie dollar strength. The CEO described the result as “solid”.

BPT- Beach Energy the oil and gas firm, posted an 87 percent fall in net profit (of $33.4 million), but is well placed for growth after a solid year.

KAR- Karoon the energy explorer has acquired a 20 percent interest in 2 Brazilian oil wells, with drilling results expected end-September.

KCN- Kingsgagte the gold miner, has more than doubled annual profit (of $73 million), Revenue surged 54%, but forecast a slight fall in gold production this year.

MQA- Macquarie Atlas Roads posted a half-year loss but it expects revenue to increase this year.

NCM- Has taken the reigns of Lihir Gold.

NWH- NRW Holdings the civil and resources services contractor, reported a lower annual profit, but expects to rebound on the improving mining activity.

RIO- Rio Tinto will invest $1.8 billion to develop the Hope Downs 4 iron ore project in WA, to link it with existing rail, power and port infrastructure in the Pilbara.

SKC- Sky City Entertainment will invest up to $198 million in its Adelaide Casino.

STO- Santos has signed a deal with Texan company Apache Energy Ltd to produce gas from the Halyard and Spar fields offshore from WA.

TSE- Transfield Services won a contract to expand Caltex’s fuel terminal at Port Hedland in north-west WA.