US markets succumbed to selling, as commodities fall sharply, potentially setting up for key reversals. European markets have setup for a potential double top, as they traded lower for the week. Asian stock markets end the week sharply lower after China reported higher than expected inflation and a rise in fixed-asset investment.
The SPI Futures is below its key pivot level of 4725 last week and the ASX is set to open lower as the SPI Futures closed down -0.4% (or -19 pts) at 4,689 (down -2.9% for week). The key levels for our index this week are 4750 and 4550. M&A activity continues to drive specific stocks. The ASX will open lower today with the banks, miners and energy stocks all set to fall. Honor your stop losses or use options to protect your portfolio.
US Markets
US stocks traded lower last week, as the QE2 impact seems to have already been factored in stock prices. European debt came back into focus. The tech-heavy Nasdaq was the weakest for the week after Bellwether and Cisco the technology giant, disappointed forecasting revenue and earnings well below estimates, citing a weak outlook fueled by worries that economic softness in Europe and public-sector spending will hurt profits (the shares fell 17% for the week). The Cisco news weighed on the tech-heavy Nasdaq which has been outperforming in the recent rally since September. There is another busy week of economic reporting in the US including leading indicators, retail sales, production, regional activity and business inventories. The selling in Friday was broad based with the leading declining sectors, the Mining sector was down 2.6%, Financials down 1.7% and Energy down 1.5%. The Dow closed down -0.8% (or -91 points) at 11,193 (-2.2% for week), while in the broader market the S&P 500 index down -1.2% (or -14 points) at 1,199 ( -2.2% for week) and the tech-heavy Nasdaq ended down -1.5% (or -37 points) at 2,518 (-2.4% for week).
European Markets
European stocks ended the week lower as sovereign debt concerns resurface and talk about “currency wars”, trade tensions at the G-20 summit (in Seoul). The European Commission still insists that they are ready to support Ireland as necessary. In London, the FTSE 100 index closed down -0.3% (or -18 points) at 5,797 (down -1.3% for week), the German DAX up marginally 0.2% (or 11 points) at 6,735 (down -0.3% for week), while in France the CAC was down -0.9% (or -36 points) at 3,835 (down -1.0% for week).
Asian Markets
Asian stock markets ended the week sharply lower. The Japanese market pulled back from monthly highs, led by financials. Japanese exporters also supported the market with solid corporate earnings and as the yen has weakened against the US dollar. In Chin,a the energy and banks led gains on expectations high inflation will boost prices. The Hong Kong and China markets experienced a delayed reaction to the higher-than-expected CPI inflation report jumping 4.4% in October (versus 3.6% in September), showing inflation rose at its fastest pace in more than two years in October, and other data that showed that the economy was still in good shape, with fixed-asset investment in urban areas rising 24.4% in the 9-months to October. Investors are again concerned that the Chinese Government will have to raise interest rates after measures were taken last week to force Banks to increase their capital reserves. This will hurt demand for assets, energy and commodities near term. In China the SSE Composite closed down sharply -5.2% (or -162 points) at 2,985 (down -4.6% for week), while in Hong Kong the Hang Seng Index was down -1.9% (or -478 points) at 24,223 (down -2.6% for week) and in Japan the Nikkei 225 Index was down -1.4% (or -137 points) at 9,725 (down 1.0% for week).
Commodities
The Dollar Index down marginally -0.2% at 78.14 on higher Euro, while the Australian Dollar last traded at 98.61. The Commodities Index was down sharply -3.57% at 303.6
Benchmark crude NYMEX for December delivery was down sharply -3.3% (or $US-2.93) to settle at $US84.73 (down -3.1% for week). Copper prices are around 2-year highs, Copper for December delivery was down -3.2% (or -13.0 cents) at $US3.8930 (down -1.6% for week). Gold prices off all-time highs again, with December gold was down -2.7% at $US1,365.70 (down -2.0% for week).
Key International News Drivers Today
US - Dow Jones at 2-year highs.
Investors chose caution ahead of the G-20 meeting.
EU – Investor concerns over sovereign debt problems in the euro zone.
CHINA – PBOC planned to raise the reserve requirement ratio at selected banks. Government stands firm on access to credit.
JAPAN – Market highest finish in more than four months.
Markets Overview
|
Market |
Movement |
|
The Dow Jones Industrial Average |
Down -0.8% (or -91 pts) at 11,193 (down -2.2% for week) |
|
The S&P 500 |
Down -1.2% (or -14 pts) at 1,199 (down -2.2% for week) |
|
The Nasdaq |
Down -1.5% (or -37 pts) at 2,518 (down -2.4% for week) |
|
|
|
|
The FTSE 100 |
Down -0.3% (or -18 pts) at 5,797 (down -1.3% for week) |
|
The German DAX |
Up Marginally 0.2% (or 11 pts) at 6,735 (down -0.3% for week) |
|
The Fench CAC |
Down -0.9% (or -36 pts) at 3,835 (down -1.0% for week) |
|
|
|
|
The Dollar Index |
Down Marginally -0.17% at 78.14 |
|
The Australian Dollar |
Last traded lower at 98.61 |
|
The Commodities Index |
Down Sharply -3.6% at 303.6 |
|
|
|
|
Crude Oil Futures |
Down Sharply -3.3% at $84.73 (down -3.1% for week) |
|
Gold Futures |
Down -2.7% at $1,365.70 (down -2.0% for week) |
|
Copper Futures |
Down -3.2% at $3.8930 (down -1.6% for week) |
|
SPI Futures |
Down -0.4% (or -19 pts) at 4,689 (down -2.9% for week) |
|
|
|
|
|
|
|
Market |
Movement |
|
SSE Composite (China) |
Down Sharply -5.2% at 2,985 (down -4.6% for week) |
|
Hang Seng Index (Hong Kong) |
Down -1.9% at 24,223 (down -2.6% for week) |
|
Nikkei 225 Index (Japan) |
Down -1.4% at 9,725 (down 1.0% for week) |
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ASX News Today
The SPI Futures is below its key pivot level of 4725 last week and the ASX is set to open lower as the SPI Futures closed down -0.4% (or -19 pts) at 4,689 (down -2.9% for week). The key levels for our index this week are 4750 and 4550. M&A activity continues to drive specific stocks. The ASX will open lower today with the banks, miners and energy stocks all set to fall. Honour your stop losses or use options to protect your portfolio.
ANZ- ANZ Bank has spent another $126 million to maintain its 20 per cent ownership stake in Chinese Bank of Tianjin, back in 2006 ANZ spent $159 million for its sake in the Chinese bank.
GFF- Goodman Fielder the food and dairy firm will not sell its edible fats and oils business to Cargill Australia Ltd as the ACCC continues to oppose the transaction.
MYR- Myer says sales were down 1.5 percent in 1Q11, but the retail giant has confirmed it expects net profit to grow 5 to 10 percent in the current financial year.
NWS- News Ltd says The Daily Telegraph and Herald Sun apps will be available from November 19, at a cost Of $8/month.
PDN- Paladin the Uranium miner, narrows loss for the September quarter of $8.2 million (vs the previous loss of $19.4 million) on the back of higher production volumes from its two African mines. Total uranium oxide production of 1.36 million pounds was up 83 percent pcp September quarter of 2009.
PMP- PMP the printer and magazine distributor, expects double-digits earnings growth in FY11, supported by new contracts wins.
QAN- Qantas has declined to confirm speculation that its A380s will be out of service over the summer holidays.
SGT- Optus, a fully owned subsidiary of SingTel, reported a 19 percent lift in 1H10 net profit as the telecommunications provider posted strong mobile growth and managed costs.
SRL- Straits Resources has agreed to sell its South-East Asian coal assets to joint venture partner Thai energy major PTT International Co Ltd.
SPH- Xstrata says it now has majority ownership and has claimed success in its $514 million bid for iron ore junior Sphere Minerals Ltd.
TEN- Ten Network has extended the contract of chief executive Grant Blackley for two years, Nick Falloon, is departing next month.
WOW- Woolworths has continued its expansion in Tasmania, after opening a $84 million distribution center in Launceston.
Economic Reports :
None
Companies:
Elders Ltd (ELD) Full year 2010 Results
Incitec Pivot Limited (IPL) Full year 2010 Results
Elders Ltd (ELD) Full year 2010 Earnings conference
James Hardie (JHX) Q2 2011 Results
Leighton Holdings (LEI) Q1 2011 Activities Report
CommBank of Australia (CBA) Q1 2011 Trading statement
Ex-Dividends
Duluxgroup Limited (DLX)
Katana Capital (KAT)
Telecom Corporation (TEL)
Tamawood Limited (TWD)
Market Summary
ASX – to open lower
US & UK/Europe – lower
US ADRs – Broadly Lower
BHP down 2.9% &
RIO down
AWC down 6.0%
ANZ down 3.8% &
NAB down 2.0%
NEM down 2.3%
JHX down 1.9%
NWS down 0.9%
Commodities Stock Index down 1.9%
Gold Stocks Index down 2.7%
Oil Stocks Index down 1.2%
By Michael Hevern
Head of Research
Tags: ASX, ASX News, Business News, Commodities, Crude Oil, European Markets, gold price, Nasdaq, stock market, Stock Market Analysis, trading, US Market wrap
