Online Stockmarket Trading Update

US stocks rose sharply overnight, as investors went shopping before “Black Friday”, buying up retail stocks and erasing almost all of sharp declines of the previous session, as the latest economic data indicated US growth is improving. European stock markets advanced overnight as markets recovered from the heavy losses from earlier in the week.  Asian markets ended mixed, as Hong Kong and Chinese investors went bargain hunting, as they discounted the impact of geopolitical risks of the Korean tensions. Commodities prices recovered overnight.

The SPI Futures is below its key support level of 4600 and the ASX is set to open higher as the SPI Futures closed up 0.8% (or 38 pts) at 4,624.  The key levels for our index today are 4685 and 4600. M&A activity continues to drive specific stocks.  The ASX is set to open higher today, with positive leads from overseas markets. The gains should be broad-based as bargain hunters step in, with commodities prices recovering overnight.

US Markets

US stocks rose sharply overnight, as investors went shopping before “Black Friday”, buying up retail stocks, erasing almost all of sharp declines of the previous session, as the latest economic data indicated U.S. growth is improving.  “Black Friday” is the Friday after Thanksgiving and often sets the tone in retail through to Christmas.  Economic reports encouraged investors that the US economy is improving.  The Reuters/University of Michigan consumer sentiment index rose to 71.6 in November (up from 67.7), better-than-expected.  Americans earned more (with incomes rose 0.5 percent last month) and spent more (with spending rising 0.4 percent) in October, both were slightly better than expected September.  The number of people applying for unemployment benefits dropped (by 34,000) last week to the lowest level in more than two years.  However on the flip side manufacturing orders fell and new home sales in the US tumbled in October while the median home price dropped to the lowest point in seven years.  The market recovery came as the global response to the tensions on the Korean Pennisular was muted, after the exchange of artillery fire between North and South Korea on Tuesday.  Defensive stocks moved lower as investors became more willing to take on risk.  The dollar and gold both fell, while Treasury prices were lower, pushing their yields higher.  The gains were broad based and the best sectors in the market included: Industrial up 2.1%, Consumer Discretionary up 1.8%, while Materials and Energy were each up 1.7%.  US stock and bond markets will be closed Thursday for the Thanksgiving holiday. They will reopen for half-day sessions on Friday.  The Dow closed up 1.4% (or 151 points) at 11,187, while in the broader market the S&P 500 index up 1.5% (or 18 points) at 1,198 and the tech-heavy Nasdaq ended up 1.9% (or 48 points) at 2,543.

European Markets

European stock markets advanced overnight.  Markets recovered from the heavy losses from earlier in the week, as strong data from Germany helped offset continuing sovereign-debt fears.  The German market continues to outperform, after the Ifo Institute released the closely watched business climate index rose to its highest level since the reunified og Germany.  The promising reports from the U.S. also helped the European markets.  In the U.K. markets rose, as the Irish government revealed the details of its EUR15 billion austerity plan.  However the Bank of Ireland slumped again down 11% on reports that the Irish government will take a majority stake as part of the bailout package.   In London the FTSE 100 index closed up 1.4% (or 76 points) at 5,657, the German DAX up 1.8% (or 119 points) at 6,824, while in France the CAC was up 0.6% (or 24 points) at 3,766.

Asian Markets

Asian markets ended mixed. Sentiment took a hit initially as many Asian investors got their first chance to react the North Korean artillery attack on a South Korean island, but buying quickly picked as fears of a rapid escalation in the conflict abated. The Korean market finished lower, but staged a recovery from the earlier losses, on hopes that tensions on the Korean Peninsula will be short lived and as foreigners went bargain hunting for beaten down stocks.  The Japanese market opened sharply lower in reaction to tensions in Korea, but trimmed its losses by the close.  Exporters weighed on the market as the euro earlier fell sharply, on continuing concerns Irish debt problems may spill over to other euro-zone countries.  In Hong Kong and China bargains hunters stepped in.  The banks led gains in China, with the successful capital raising by the Industrial & Commercial Bank of China.  In China the SSE Composite closed up 1.1% (or 32 points) at 2,860, while in Hong Kong the Hang Seng Index was up 0.6% (or 128 points) at 23,024 and in Japan the Nikkei 225 Index was down -0.8% (or -80 points) at 10,030.

Commodities

The Dollar Index up marginally 0.1% at 79.76 on a flat Euro, while the Australian Dollar last traded higher at 98.12.

Benchmark crude NYMEX for December delivery was up sharply 3.6% (or $US2.90) to settle at $US84.15. Copper prices backed-off 2-year highs, Copper for December delivery was up 1.5% (or 5.5 cents) at $US3.7630. Gold prices off all-time highs again, with December gold was down -0.3% at $US1,377.80.

Key International News Drivers Today

US - Tensions between North and South Korea fear recede, as traders focus on “Black Friday”.
EU - Investor go shopping in the euro zone.
CHINA – Government stands firm on access to credit. China prospect of implementing further tightening measures.
JAPAN – Market closes above 10,000, still outperforming.

Markets Overview

ASX News Today

The SPI Futures is below its key support level of 4600 and the ASX is set to open higher as the SPI Futures closed up 0.8% (or 38 pts) at 4,624. The key levels for our index today are 4685 and 4600. M&A activity continues to drive specific stocks. The ASX is set to open higher today, with positive leads from overseas markets. The gains should be broad-based as bargain hunters step in, with commodities prices recovering overnight.

AGO- Atlas Iron has started discussions with BHP Billiton about co-operating on iron-ore haulage and port access in Australia’s Pilbara region. This move could open up the region for other small producers.

BOW- Bow Energy the gas and oil explorer is on track to deliver commercial gas flows and increased gas reserves by the end of 2011.

CGT- Castlemaine Goldfields will reopen the Ballarat mine it purchased from the former Lihir Gold in central Victoria, with production possibly within a year.

FRS- FerrAus has held talks with a subsidiary of BHP Billiton after BHP has taken the emerging producer to court over failed negotiations for a rail haulage deal.

FXJ- Fairfax Media says combining the company’s metropolitan newspapers and online properties under the one roof will yield $10 million in annual savings.

FMG- Fortescue Metals Group has defended itself against the allegations of misleading and deceptive conduct by the corporate watchdog.

GNS- Gunns says it will close several northern Tasmanian woodchipping sites as part of a major operational restructure of its forest products division.

FPH- Fisher & Paykel Healthcare has reported a 54 percent fall in 1H11 net profit to $13.2 million, citing unfavorable exchange rate movements and a one-off non-cash deferred tax charge.

HGL- HGL has reported a 67.5 percent rise in annual net profit and says it’s optimistic about the coming year.

LYC- Lynas Corp in talks to secure additional supplies of rare earths products for the Japanese market by accelerating the expansion of its Rare Earths Project.

MAK- Minemakers the exploration company plans to spin off its Tasmanian assets and list a new company in a $10 million initial public offer.

NZO- New Zealand Oil and Gas is in a trading halt after confirmation all 29 miners trapped in the Pike River Coal Mine had perished.

PRG- Programmed Maintenance Services has reported a $3.07 million 1H11 loss but says earnings will improve in the second half.

TEN – Lachlan Murdoch has finalised the purchase of the half stake form James Packer’s recent purchase

VBA- Virgin Blue will add a further two wide-body Airbus A330 aircraft to its domestic fleet by 2012.

Economic Reports :

RBA Gov Glenn Stevens Speaks
ABS private new capital expenditure and expected expenditure for September quarter.
NAB – National Bank CEO Cameron Clyne to address Trans-Tasman Business Circle luncheon.

Companies:

Beach Petroleum (BPT) Full year 2010 AGM
Goodman Fielder Ltd (GFF) Full year 2010 AGM
Gunns Ltd (GNS) Full year 2010 AGM
GrainCorp Ltd (GNC) Full year 2010 Results
Peak Oil and Gas Lists on the ASX today
Tower Australia Ltd (TAL) Full year 2010 Results

Ex-Dividends

TFS Corporation Ltd (TFC)

Market Summary

ASX – to open higher
US & UK/Europe – higher
US ADRs –  Broadly Higher

BHP up 2.2% &
RIO up
AWC up 3.6%
ANZ up 2.1% &
NAB up 2.3%
NEM up 1.0%
JHX up 2.6%
NWS up 1.4%

Commodities Stock Index up 1.7%
Gold Stocks Index up 0.3%
Oil Stocks Index up 1.6%

By Michael Hevern
Head of Research

Tags: ASX, ASX News, European Markets, Nasdaq, Nikkei, spi, Stock Market Analysis, trading, US Market wrap

This entry was posted on Thursday, November 25th, 2010 at 9:26 am and is filed under Morning Wrap, Stock Market Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.