Online Stockmarket Trading Update

* US stocks fell sharply again overnight.  Investors had to deal with slower-than-expected domestic economic growth and the worsening euro zone concerns.  The markets are closed tonight for Thanksgiving and only open a half day on Friday.Â
* European stock markets fell again overnight, after a disappointing German bond auction raised concerns that the eurozone debt contagion disaster in now impacting Europe’s number 1 economy.
* Asian markets fell, as traders sold after negative leads from Wall Street and Europe.
* Commodities prices traded sharply lower, with Gold prices lower to $US1,696 and crude oil closed around $US96.

The SPI Futures is trading around the key pivot level of 4250, ending down -0.6% (or -25 points) at 4,039. The key levels for our index today are 3950 to 4120.

Yesterday Australian shares traded lower for a fourth straight day, and the Aussie market is now at its lowest level since the start of October.  The recent four-day sell-off is the longest losing streak since mid-July and has wiped off nearly $60 billion in value from the market. 

Trader sentiment was not helped by the spike in Spanish borrowing costs and news out of the US of a downward revision to US economic growth.  In our afternoon session poor Chinese PMI manufacturing data kept any bargain hunters at bay.  

Shares in the All Ordinaries (XAO) were generally lower again, closing down -1.9% at 4126, and the S&P/ASX 200 (XJO) closed down -2.0% to 4051.

Aussie traders are expected to continue selling today, after the sharply negative leads from the US and European markets. Traders’ fears over the eurozone debt crisis continued to weigh on sentiment, after a disappointing German bond auction and as Italian and Spanish debt funding costs remain at unsustainable levels, and in the US the super committee charged with reducing the US deficit remains in deadlock.  We continue to have a busy week for AGMs and production reports, see below for details.

Economics News Today

*  RBA – Reserve Bank of Australia Governor Glenn Stevens speech at Forecasting Conference

US Markets

US stocks fell sharply again overnight.  Investors had to deal with slower-than-expected domestic economic growth and the worsening euro zone concerns.  The markets are closed tonight for Thanksgiving and only open a half day on Friday. 

The markets sold down broadly as all 30 Dow Jones components and all 10 of the S&P 500 sectors trading sharply lower. The Dow Jones Index fell to its lowest level since the start of October, and has been down five of the past six sessions, falling -6% in that time. The S&P 500 index has lost -7.8% during its seven consecutive sessions of losses, while the tech-heavy Nasdaq has lost ground in the past five sessions, its longest losing streak since July 2010.  

The losses continued after yesterday’s announcement that the US government revised third-quarter growth to 2% from an initial estimate of 2.5%.  Selling picked up after a German auction of new 10-year government bonds was surprisingly weak, bringing the euro zone’s debt fears closer to the number 1 economy in the region. This news also sparked a lift in yields on Spanish and French government bonds as well. There is a buyers strike at the moment and in the US trading volumes were already down, as investors packed up to take a four-day weekend for Thanksgiving.

All ten company groups that make up the S&P index traded sharply lower with Materials down -2.7%, Energy down -3.0%, Financials down -2.7%, Technology down -2.4%, Industrials down -2.3%, and Consumer Staples down -2.0%.

The Dow Jones closed down -1.7% (or -200 points) at 11,293, the S&P 500 index closed down -2.2% (or -26 points) at 1,161, the Nasdaq ended down -1.9% (or -46 points) at 2,474, and the smaller cap Russell 2000 was down -3.2%.

European Markets

European stock markets fell again overnight, after a disappointing German bond auction raised concerns that the eurozone debt contagion disaster in now impacting Europe’s number 1 economy.   The Stoxx Europe 600 index fell -1.3%.  

The European Central Bank weighed in again and bought Italian and Spanish bonds as confidence wavered, but the cost of borrowing remained at crisis levels for the PIIGS economies, and French and Belgian bond yields jumped after news that the planned bailout for the Belgian-French financial institution Dexia SA could collapse due to the cost of financing the rescue deal.  Meanwhile the Bank of Greece said Greece could be forced out of the eurozone, unless it meets all targets set out in an October agreement.  

Traders headed for the exits after a poorly received German 10-year-bond auction, in which the Bundesbank was forced to complete the planned EUR6 billion sales. The weak Chinese “flash” PMI figures were also on traders’ minds as the world’s growth engine falters under the macro economic conditions.  Financials once again led the falls, but growth-sensitive stocks including resource firms also sold off heavily due to the Chinese figures.  The German DAX has had losses in six of the past eight sessions and looks to be heading to the lows of last September.

In London the FTSE 100 index closed down -1.3% (or -67 points) at 5,139, the German DAX was down -1.4% (or -80 points) at 5,458 while in France the CAC was down -1.7% (or -48 points) at 2,822. The Spanish market was down -2.1% and Italy was down -2.3%. 

Asian Markets

Asian stock markets fell, as traders sold after negative the leads from Wall Street and Europe.  

Asian investor sentiment was buffeted by concerns of the slowing growth in China after a HSBC report showed Chinese manufacturers have reported the preliminary “flash” PMI figure dropped to 48 in November (compared with a mildly expansionary 51 previously). A reading below 50 suggests a contraction in the sector. This is their sharpest fall in output since March 2009, confirming that the world’s leading growth economy is succumbing to the global economic pressures of supply and demand. The final PMI figure will be released on 1 December.  The selling was across the board in all regional markets.

In China the SSE Composite closed down -0.7% (or -17 points) at 2,395, while in Hong Kong the Hang Seng Index was up 0.1% (or -387 points) at 17,864 and in Japan the Nikkei 225 Index was closed at 8,315. The South Korean KOSPI was down -2.4% for the session, while the Indian market was down -2.3%.

Commodities

The Dollar Index was higher at 78.24 on a lower Euro, while the Australian Dollar last traded lower at 98.45. Commodities prices traded lower.

For the session the benchmark crude NYMEX for December delivery was down -2.2% (or -$US2.18) to settle at $US95.82.  Copper prices are seeking a support level as Copper for December delivery was down -1.6% (or -5.3 cents) at $US3.2530.  December gold was down -0.4% (or $US6.10) at $US1,696. 

ASX News Today

ASX – ASIC says it had concerns about the technology underpinning the Australian Securities Exchange (ASX) prior to the October outage that halted trade for most of a day. ASIC listed a nuber of actions including more frequent communication about ASX upgrades and changes to the trading platform.

IFL – IOOF Holdings, the wealth manager, expects first half profit to fall this financial year due to falls on global stock markets.

PRG – Programmed Maintenance Services has returned to first half profitability and has forecast earnings growth in all of its divisions.

REX – Regional Express Holdings has maintained earnings guidance of a profitable 2011/12.

SGP – Stockland the property developer has affirmed its full-year guidance despite soft sales in the first two months of the financial year.

VBA – Virgin Australia has turned a profit in the first quarter but has refrained from giving full-year guidance because of volatile economic conditions and will hire as many as 250 new cabin crew staff.

Local Corporate Reporting

 

Ex-dividend Date

Tags: Asian Markets, ASX, ASX News, Business News, Commodities, Dividend, European Markets, gold price, Stock Market Analysis, stockmarket, trading, US Market wrap

This entry was posted on Thursday, November 24th, 2011 at 9:14 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.