Online Stockmarket Trading Update

*  US stock markets closed higher again, with the tech-heavy Nasdaq at its best level in 12 years.
* European stocks managed modest gains overnight, in anticipation of the ECB LTRO liquidity injection.
* Asian stock markets generally rose yesterday, as energy prices eased.
* Commodities prices were lower, with Gold prices around $US1,768, while crude-oil closed around $US108.

The SPI Futures is trading above the key pivot level of 4180, ending up 0.3% (or 11 points) at 4,268. The key levels for our index today are 4230 to 4300.

Australian shares are expected to hold on to recent gains today as miners and banks found support overnight, and as the Aussie reporting season continues. Markets continued their melt up in the US and Europe overnight.

US Markets

US stock markets closed higher again, with the tech-heavy Nasdaq at its best level in 12 years.

The Dow Jones Industrial Average closed above 13000 points for the first time in nearly four years (May 2008) overnight. In the broader market seven of the top ten S&P 500 sectors ended higher, led by technology and consumer discretionary shares after consumer confidence figures can surprised to the upside.  The S&P 500 stock index closed above the key 1365 level, and the Nasdaq is approaching the 3000 level.

In economic news the Conference Board reported that US consumer confidence rose to its highest reading in a year, lifted by a better outlook on the job market. The Commerce Department report on durable goods showed orders in January fell at the fastest pace in 3 years, decreasing 4% (compared with the 1.1% drop expected), while a regional Fed measure of economic activity in the mid-Atlantic area expanded modestly, for the third month in a row. The Standard & Poor’s Case-Shiller home price index found that US home prices fell 3.8% in December from a month earlier, ending 2011 at the lowest level since mid-2006.  Commodities continue to rise, but crude-oil eased, see the details below.

The ten company groups that make up the S&P index traded mixed, with Materials up 0.3%, Energy down -0.3%, Financials up 0.3%, Industrials down -0.1%, Technology up 0.7%, while Consumer Staples were up 0.3%.

The Dow Jones closed up 0.2% (or 23 points) at 13,005, the S&P 500 index up 0.3%  (or 4 points) at 1,372, the Nasdaq ended up 0.7% (or 20 points) at 2,986 and the smaller cap Russell 2000 was down -0.4%.

European Markets

European stocks managed modest gains overnight, in anticipation of the ECB LTRO liquidity injection.  The Stoxx Europe 600 closed up 0.2%.

Across the region banking and mining shares were boosted by investor sentiment after US consumer confidence rose to its highest level in a year in February.  There is optimism ahead of the European Central Bank’s (ECB) second long-term refinancing operation (LTRO) and German parliament approval of the Greek bailout package. On the flip side the Standard & Poors Rating Agency has downgraded Greek sovereign credit to “selective default,” a move that was widely expected.

In London the FTSE 100 index closed up 0.2% (or 12 points) at 5928, the German DAX was up 0.5% (or 38 points) at 6,887 while in France the CAC was up 0.4% (or 12 points) at 3,453. Spain was down -0.1% and Italy ended up 0.2%. 

Asian Markets

Asian stock markets generally rose yesterday, as energy prices eased.  Across the region airline stocks rose as crude-oil prices eased during the session, while financial stocks provided support.  In Japan the market was helped by a weakened yen and strong retail sales, after a 1.9% year-on-year rise for January retail sales.  In Hong Kong the Hang Seng Index continued higher (at 6-month highs) and in China the Shanghai Composite advanced to the 2450 level.

In China the SSE Composite was up 0.2% (or 4 points) at 2,452, while in Hong Kong the Hang Seng Index was up 1.7% (or 350 points) at 21,568 and in Japan the Nikkei 225 Index closed up 0.9% (or 88 points) at 9,722. The South Korean KOSPI was up 0.6% for the session, while the Indian market up 1.6%.

Commodities

The Dollar Index was lower at 78.35 on a higher Euro, while the Australian Dollar last traded higher at 1.0695. Commodities prices traded mixed.

For the session the benchmark crude NYMEX for April delivery was down -1.9% (or -$US2.13) settle at $US106.43.  Copper prices are seeking a support level as Copper for February delivery was up 0.8% (or 3.2 cents) at $US3.9035.  February gold was up 0.8% (or $US13.40) at $US1,786.

ASX News Today

AGO – Atlas Iron says its 1H12 net profit has fallen 79.8 percent as the company remains on target to ship about 5.5 to 5.7 million tonnes of iron ore in fiscal 2012.

ALL –  Aristocrat Leisure, the gaming machine supplier, expects global volatility and currency headwinds to continue, but says the release of new games in 2012 will help boost underlying profit.

BBG – Billabong International says it has rejected an increased takeover bid of $3.30 per share from private equity giant TPG Capital.

BLD – Boral the building products maker, has delivered a 65 percent rise in 1H12 net profit due to gains from acquisitions, but says weak housing markets continue to affect its underlying performance.

JHX – James Hardie Industries the building products maker, has increased its underlying profit and maintained its target for full year profit despite weak housing markets.

QBE – QBE Insurance Group’s annual net profit plunged 45 percent during what it described as one of the worst years for catastrophic events and is seeking to raise $US500 million from institutional and retail investors in order to replace its current tier two convertible debt.

SGT – SingTel Optus has failed to gag AFL chief executive Andrew Demetriou from claiming the telco was “lifting” content owned by sporting bodies, behaviour “akin to stealing”.

SXL – Southern Cross Media has almost tripled its net profit after acquiring the Austereo radio group.

TLS – Telstra’s participation in the national broadband network (NBN) has cleared the final hurdle after the competition regulator, said it had accepted the telco’s structural separation undertakings.

Commodities Stock Index  up 0.2%
Gold Stocks Index up 1.6%
Oil Stocks Index up 0.1%  

US ADRs – Broadly higher

BHP up 1.0%,  RIO up1.4%; AWC down -0.7%
ANZ down -0.9% & NAB down -0.6%
NEM   up 0.8%, JHX down -4.9%, NWS  up 0.9%

By Michael Hevern
Head of Research

*  US stock markets recovered from early selling, ending the day still at three and a half year highs, as traders held their nerve helped by better-than-expected reports on home sales and consumer sentiment.
* European stocks ended in the red but well off lows overnight, as the German parliament approved the second bailout package.  The Stoxx Europe 600 index closed down -0.3%.
* Asian stock markets ended mostly lower yesterday, as the impact of higher energy prices started to concern investors, as it is yet another headwind for global growth.
* Commodities prices were lower, with Gold prices traded around $US1,768 and while crude-oil closed around $US108.

The SPI Futures is trading above the key pivot level of 4180, ending flat (or -1 point) at 4,269. The key levels for our index today are 4230 to 4300.

Australian shares are expected to ease today, as the Aussie reporting season continues.  The Gillard government gets back to business today. Markets ended flat in the US and Europe overnight.

See below for ASX listed companies in the news today.

US Markets

US stock markets recovered from early selling, ending the day still at three and a half year highs, as traders held their nerve helped by better-than-expected reports on home sales and consumer sentiment.

The Dow Jones Industrial Average failed to hold above 13,000 again (its fifth attempt).  In the broader market the S&P 500 stock index and the tech-heavy Nasdaq finished modestly higher.  The Consumer Discretionary and Financials sectors led the gains and the Energy sector faded on the back of lower crude-oil prices (as crude fell for the first session in the past eight).  Banks rose for the session and Disney rose 0.9% after analysts at Goldman Sachs nominated it as one of their favourite stocks.

Sentiment was boosted after readings on the U.S. housing market, as an index of pending sales of existing homes in January increased 2% on a monthly basis (to 97.0) and the number of home buyers who signed contracts to purchase existing homes grew last month to the highest level in 21 months.  Also regional manufacturing activity continued to improve as a reading on February’s manufacturing activity in the Dallas area rose at a faster rate this month than last, up to 17.8 in February (up from 15.3).

All ten company groups that make up the S&P index traded higher except for energy, with Materials up 0.1%, Energy down -0.3%, Financials up 0.7%, Industrials up 0.1%, Technology up 0.2%, while Consumer Staples were up 0.6%.

The Dow Jones closed down -0.1% (or -2 points) at 12,981, the S&P 500 index up 0.1%  (or 2 points) at 1,367, the Nasdaq ended up 0.1% (or 2 points) at 2,966 and the smaller cap Russell 2000 was up 0.1%. 

European Markets

European stocks ended in the red but well off lows overnight, as the German parliament approved the second bailout package.  The Stoxx Europe 600 index closed down -0.3%.

Across the region high energy prices are starting to weigh on prospects for growth and the Stoxx Europe 600 autos index suffered from this selling down -1.8% for the session, after JP Morgan downgraded its stance on European auto stocks to neutral from overweight.  Leaders of the G-20 nations of industrialised and developing economies said overnight that members of the eurozone must step up their own efforts and commit more money to tackle the crisis before coming to them for support.  Investors are eagerly awaiting the launch of the ECB’s second three-year, long-term refinancing operation (LTRO). However in the US session the S&P Ratings Agency downgraded the Greek economy to “selective default”.

In London the FTSE 100 index closed down -0.3% (or -19 points) at 5915, the German DAX was down -0.2% (or -14 points) at 6,849 while in France the CAC was down -0.7% (or -25 points) at 3,441, Spain was up 0.1% and Italy ended down -1.1%.  

Asian Markets

Asian stock markets ended mostly lower yesterday, as the impact of higher energy prices started to concern investors, as it is yet anoither headwind for global growth.

Traders are concerned that consistently high crude-oil prices will hurt the global economy and weaken the recovery weighed on sentiment.  In Japan shares eased as profit-takers stepped in.

Chinese stocks resumed their rise after Beijing’s monetary easing earlier this month, with automobile companies leading the gains after news that only Chinese-branded vehicles would qualify for use by the government under a preliminary 2012 list of procurement choices.  The Shanghai Composite is holding above 2400.

In China the SSE Composite was closed up 0.3% (or 7 points) at 2,447, while in Hong Kong the Hang Seng Index was down -0.9% (or -189 points) at 21,217 and in Japan the Nikkei 225 Index closed down -0.1% (or 51 points) at 9,647. The South Korean KOSPI was down -1.4% for the session, while the Indian market down -2.7%.

Commodities

The Dollar Index was lower at 78.35 on a higher Euro, while the Australian Dollar last traded higher at 1.0695. Commodities prices traded mixed. 

For the session the benchmark crude NYMEX for April delivery was down -1.9% (or -$US2.03) to settle at $US107.74.  Copper prices are seeking a support level as Copper for February delivery was up 0.1% (or 0.2 cents) at $US3.8650.  February gold was down -0.4% (or -$US7.20) at $US1,768.

ASX News Today

AGK – AGL Energy says it is confident of getting regulatory approval to take 100 percent ownership of Victoria’s largest power station at Loy Yang.  AGL announced a 51.2 percent fall in 1H12 net profit to $117 million due to a $115.9 million fall in the value of its derivatives. They will raise A$1.5 billion from share issues to help buy Tokyo Electric Power’s interest in the Loy Yang power station.

BOQ – Bank of Queensland has been placed on credit watch positive by ratings agency Standard & Poor’s (S&P), indicating an upgrade to the lender’s long-term credit rating is possible. 

BPT – Beach Petroleum, the oil and gas producer, has returned to 1H12 profitability despite a small fall in production.

CKF – Collins Foods has reaffirmed its cautious guidance as trading conditions remain difficult, despite briefly-improved business over the summer holiday. 

CTX – Caltex Australia has incurred a $852 million loss for calendar 2011 as it continues to review the future of its two Australian refineries. 

CWN – Crown, the casino operator, has reported an increase its 1H12 profit by 79 percent due to higher VIP gambler revenue and improved returns from its Macau joint venture. Crown also said it has increased its stake in rival casino company Echo Entertainment.  Crown will pay about $256 million to boost its stake to 10% from 4.9%. 

DJS – David Jones the upmarket department store chain, says it hopes to make about 10 percent of its sales online as it tries to lure new customers and avoid closing stores. 

EGP – Echo Entertainment Group, the casinos operator, says it is attracting more high-rolling VIP gamblers to its casinos, and its expansion of The Star casino in Sydney is on time and within budget. 

GNS – Gunns the timber company Gunns has posted a larger first half loss and says trading conditions will remain tough as long as the Australian dollar maintains its strength. 

HOM – Homeloans Ltd, the national non-bank lender, will continue seeking acquisition opportunities and cutting costs to protect earnings after reporting a 13 percent drop in 1H12 profit. 

NCM – Newcrest Mining the gold miner said difficulties at its Lihir mine were expected to impair quarterly production.

ROC – Roc Oil, the oil and gas producer, has booked its first annual profit since 2005, partly as a result of the higher oil price. 

SFW – SFG Australia Ltd has reported an 84 percent jump in 1H12 profit, largely driven by the wealth manager’s merger with Shadforth Financial Group Holdings Ltd. 

SKI – Spark Infrastructure, the electricity infrastructure fund, has posted a 2-percent rise in profit and expects to pay out more to security holders in the next three years. 

Ex-dividend Date

Commodities Stock Index  down -0.4%
Gold Stocks Index down -1.2%
Oil Stocks Index down -0.1%   

US ADRs – Broadly mixed!

BHP up 0.3%,  RIO up 0.6%; AWC up 1.7%
ANZ up  0.1% & NAB up 0.7%
NEM   down -1.6%, JHX up 1.5%, NWS  down -0.5% 

By Michael Hevern
Head of Research 

* US stock markets ended the week at three and a half year highs, as traders held their nerve, helped by better-than-expected reports on home sales and consumer sentiment.
* European stock markets generally ended in the green on Friday night. The Stoxx Europe 600 index closed higher fir the first time in four sessions, up 0.3%.
* Asian stock markets ended modestly higher on Friday. Energy stocks supported markets as crude-oil prices continued to rise.
* Commodities prices were higher, with Gold trading around $US1,773 while crude-oil closed around $US110.

The SPI Futures is trading above the key pivot level of 4180, ending down -0.2% (or -7 points) at 4,282. The key levels for our index this week are 4230 to 4340.

Australian shares are expected to hold on to recent gains today, as the Aussie reporting season continues.  Markets continued to melt up in the US and Europe on Friday night.

See below for ASX listed companies in the news today.

Economics News Today

*   Labor Party Vote for the Position of Prime Minister.

US Markets

US stock markets ended the week at three and a half year highs, as traders held their nerve, helped by better-than-expected reports on home sales and consumer sentiment.

The Dow Jones Industrial Average again eased form the 13,000 level, while in the broader market the S&P 500 had its highest close since 5 June, 2008 and the tech-heavy Nasdaq Composite outperformed. 

Technology and utility sectors led the gains, while financial stocks weighed.  Stocks edged higher after data showed US consumers turned more upbeat about the economy at the end of February, as the Thomson Reuters/University of Michigan consumer-sentiment index rose to 75.3 (better than the expected 73), while sales of new homes fell in January, but managed to beat expectations.

In corporate news American International Group (AIG) rose 1.5%, after the insurer reported a 4Q operating profit well above estimates, and Salesforce.com the business-software maker surged 9%, after reporting 4Q earnings and revenue that exceeded forecasts and they lifted full-year revenue outlook. Shoe maker Crocs slumped -5%, after reporting 4Q earnings topped expectations, but its first-quarter earnings outlook was below forecasts. 

Commodities continued to rise, particularly crude-oil prices which climbed another 1.8%.

The ten company groups that make up the S&P index traded mixed, with Materials down -0.1%, Energy up 0.4%, Financials down -0.3%, Industrials down -0.1%, Technology up 0.6%, while Consumer Staples were down -0.1%.

The Dow Jones closed flat (or -2 points) at 12,983, the S&P 500 index was up 0.2% (or 2 points) at 1,365, the Nasdaq ended up 0.2% (or 6 points) at 2,963 and the smaller cap Russell 2000 was down -0.3%.

European Markets

European stock markets generally ended in the green on Friday night. The Stoxx Europe 600 index closed higher the first time in four sessions, up 0.3%. 

Traders focused on positive economic data and earnings as Greek debt deal concerns eased with the bailout package worth EUR130 billion being agreed upon last week. The Greek Parliament approved a debt-restructuring plan for private bondholders. 

Economic data showed that consumer confidence in France rose slightly in February and that Germany’s economy contracted marginally during the fourth quarter, in line with expectations. The euro dollar pushed to near 3-month highs against the US dollar and near 4-month highs against the Japanese yen.

In London the FTSE 100 index closed down -0.1% (or -3 points) at 5935, the German DAX was up 0.8% (or 55 points) at 6,864 while in France the CAC was up 0.6% (or 19 points) at 3,467. Spain was up 1.1% and Italy ended up 1.0%. 

Asian Markets

Asian stock markets ended modestly higher on Friday, as energy stocks supported markets and crude-oil prices continued to rise. In Japan the Nikkei Stock Average rose again, led by the export stocks.  In China the Shanghai Composite rose 1.3%, holding above the key 2400 level for the week, the key 6-month pivot level for this market.

In China the SSE Composite closed up 1.3% (or 30 points) at 2,440, while in Hong Kong the Hang Seng Index was up 0.1% (or 26 points) at 21,406 and in Japan the Nikkei 225 Index closed up 0.5% (or 51 points) at 9,647. The South Korean KOSPI was up 0.6% for the session, while the Indian market was down -0.9%.

Commodities

The Dollar Index was lower at 78.35 on a higher Euro, while the Australian Dollar last traded higher at 1.0695. Commodities prices traded mixed.

For the session the Benchmark crude NYMEX for April delivery was up 1.8% (or $US1.94) settle at $US109.62.  Copper prices are seeking a support level as Copper for February delivery was up 1.5% (or 5.8 cents) at $US3.8670.  February gold was down -0.6% (or -$US9.80) at $US1,773. 

ASX News Today

AGK – AGL Energy says it is confident of getting regulatory approval to take 100 percent ownership of Victoria’s largest power station at Loy Yang.  AGL announced a 51.2 percent fall in 1H12 net profit to $117 million due to a $115.9 million fall in the value of its derivatives.

AGK – said it will raise A$1.5 billion from share issues to help buy Tokyo Electric Power’s interest in the Loy Yang power station.

ANZ – Fitch left its ratings for ANZ at “AA-”.

BANKS – Aussie banks have been downgraded by the Fitch Ratings Agency, which cited higher bank funding costs for rating cuts that offset the Australian dollar. The S&P Ratings Agency had previously downgraded banks.

BOQ – Bank of Queensland has been placed on credit watch positive by ratings agency Standard & Poor’s (S&P), indicating an upgrade to the lender’s long-term credit rating is possible.

CWN – Crown, the casino operator, has reported an increase its 1H12 profit by 79 percent due to higher VIP gambler revenue and improved returns from its Macau joint venture. Crown also said it has increased its stake in rival casino company Echo Entertainment.  Crown will pay about $256 million to boost its stake to 10% from 4.9%.

DJS – David Jones the upmarket department store chain, says it hopes to make about 10 percent of its sales online as it tries to lure new customers and avoid closing stores.

EGP – Echo Entertainment Group, the casinos operator, says it is attracting more high-rolling VIP gamblers to its casinos, and its expansion of The Star casino in Sydney is on time and within budget.

NCM – Newcrest Mining the gold miner said difficulties at its Lihir mine were expected to impair quarterly production. 

Commodities Stock Index  up 0.1%
Gold Stocks Index down -1.4%
Oil Stocks Index up 0.4%  

US ADRs – Broadly mixed

BHP up 0.2%,  RIO up 0.3%; AWC up 3.1%
ANZ up  & NAB up 0.8%
NEM   down -2.0%, JHX, NWS  down -0.4%

By Michael Hevern
Head of Research

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