* US stock markets eased overnight, following the biggest 2-day rally this year.
* European stock markets rose for a third day, as traders continue to anticipate action from the EU leaders on easing.
* Asian stock markets finished mixed, with China continuing to underperform.
* Commodities prices generally higher, Gold prices are trading around $US1,620 while crude-oil closed up around $US90.
The SPI Futures is trading above the key support level of 4180, ended up 0.1% (or 6 points) at 4214. The key levels for our index today are 4200 to 4230. We may see some profit-taking today, but remember it is end-of-month.
In Australian the share market touched an 11-week high again, as European leaders offered reassurances that it will take action to tackle the debt crisis. Investors are anticipating that the US Federal Reserve’s Open Market Committee (FOMC) meeting on Tuesday and Wednesday, will update the market on the US central bank’s commitment to further easing.
See below for ASX listed companies in the news today.
Economics News Today
* June Financial Aggregates, incl Private Sector Credit
* June Building Approvals
* June International Reserves & Foreign Currency Liquidity.
US Markets
US stock markets eased overnight, following the biggest 2-day rally this year, as the S&P500 is up 3.6% over the past 3-sessions and ahead of the Fed’s FOMC meeting and the monthly employment reports due out this week.
The three benchmark indexes finished modestly lower for the session, On the NYSE three stocks fell for every two gainers The Industrials and Finance sectors saw profit-taking, while the Conumer and Energy sectors provided support.
In corporate news JPMorgan fell -2% after Deutsche Bank AG cut its recommendation on the stock and said earnings expectations may be too high and the homebuilders sector fell -2% as Citigroup said the industry’s shares may decline after this year’s fantastic surge.
The Fed policy makers meet later this week, before the Non-Farms jobs report and will decide whether additional stimulus is needed to address the slowdown in the US domestic economy, as recent reports are confirming manufacturing stagnated in July and consumer confidence fell for a fifth month. Economists are forecasting that the jobs data will show US employers added 100,000 jobs to payrolls in July and the unemployment rate held at 8.2 percent.
Commodities prices rose again overnight, with the grains up another 3%.
All ten company groups that make up the S&P index traded mixed, with Materials down -0.1%, Energy sector up 0.3%, Financials sector down -0.2%, Industrials sector was down -0.3%, Health Care down -0.5%, Technology was up 0.1%, while Consumer Staples were up 0.5%.
The Dow Jones closed down -0.1% (or -3 points) at 13,073, the S&P 500 index down 0.1% (or -1 points) at 1,385, the Nasdaq ended down 0.4% at 2,946 and the smaller cap Russell 2000 was down -0.6%.
European Markets
European stock markets rose for a third day, as traders continue to anticipate action from the EU leaders to address the eurozone debt crisis. The Stoxx Europe 600 Index surged another 1.6% and is now up 5% in the past week. The Stoxx 600 has gained for eight straight weeks, its longest rally in more than six years, and has rebounded 13% from its lows in June.
Trader sentiment remained bullish as Spanish bonds rallied on speculation policy makers will take action to ease the eurozone debt crisis. The European Central Bank (ECB) President Mario Draghi met with US Treasury Secretary Tim Geithner in Frankfurt, following the reassurance from leaders in Berlin, Paris and Rome that backed the ECB’s commitment to protect the 17-nation euro.
In a busy week for economic data the ECB will meet to discuss the LTRO, interest rates and the action plan for the eurozone financial system, and eurozone unemployment will be released, and expected to be over 11%.
In London the FTSE 100 index closed up 1.2% (or 66 points) at 5,593, the German DAX was closed up 1.3% (or 85 points) at 6,774, while in France the CAC closed up 1.2% (or 40 points) at 3,320.
Asian Markets
Asian stock markets finished mixed, with China continuing to underperform. The MSCI Emerging Markets Index added 0.8% and is at 3-week highs, across the region the gains were led by the financial stocks.
In Japan the market rose 0.8% as bonds fell, sending 10-year yields up the most in seven weeks, as Japanese industrial output decreased 0.1 percent in June from May’s -3.4 percent decline, and was below estimates of a 1.5 percent increase.
In Hong Kong the market rose, but again in China the market fell to lows not seen since 2009, as corporate earnings reports have disappointed the markets and there are increasing concerns over what the trouble in the eurozone mean for Chinese exporters.
In China the SSE Composite closed down -0.9% (or -20 points) at 2,109, while in Hong Kong the Hang Seng Index closed up 1.6% (or 310 points) at 19,585, and in Japan the Nikkei 225 Index was up 0.8% (or 69 points) at 8,635.
Commodities
The Dollar Index was lower at 82.795 on a higher Euro, while the Australian Dollar last traded lower at 1.0499. Commodities prices traded generally higher.
For the session the Benchmark crude NYMEX for August delivery was down -0.4% settled at $US89.78. Copper prices are looking for key support level as Copper for August delivery was down -0.3% at $US3.416, while August Gold was up 0.1% (or $US1.70) at $US1,620.
ASX News Today
APN – APN News and Media has named a new chairman and had a lucrative advertising contract with the NSW State Transit Authority bus fleet extended.
BPT – Beach Energy the oil and gas producer, is forecasting profit growth in the 2012-13 financial year after exceeding its production forecasts in 2011-12, and had a 15% improvement on procution on pcp and sales were up 25%.
CWN – Crown has has Fitch Ratings has it’s Long-Term Issuer Default Rating (IDR) and its senior unsecured rating at ‘BBB’. and Outlook on the IDR is Stable, citing its strong market position as the sole licensed casino operator in the states of Victoria and WA.
ELD – Elders the agribusiness will cut 75 jobs at its Adelaide headquarters before 30 September in a move to cut costs.
FMS – Flinders Mines will now start developing its flagship $1.1 billion Pilbara iron ore project with no commercial impediments after a takeover bid for the miner by a Russian steel-maker fell through early in July.
TSE – Transfield Services the engineering firm has won $100 million in new work with resources companies in the Pilbara region, WA.
Corporate News
Reporting today:
None.
Ex-dividend Date
None
Market Summary
ASX – to open higher
US & UK/Europe – EU higher & US eased
Commodities Stock Index up 0.1%
Gold Stocks Index up 1.1%
Oil Stocks Index up 0.3%
US ADRs – Broadly higher!!…
BHP down -0.4%, RIO up 0.3%; AWC down -1.4%
ANZ up 0.8% & NAB up 0.6%
NEM up 1.7%, JHX up 0.9%, NWS down -0.3%
By Michael Hevern
Head of Research
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