* US markets eased overnight as the financial stocks gave back some of their gains in a busy reporting period for the sector.
* European stock markets rose modestly overnight in a choppy trading session.
* Asian stocks markets were mixed yesterday, with China still underperforming at 4-year lows and most other markets up around 0.3%.
* Commodities prices lower, Gold prices are trading around $US1,588 while crude-oil closed around $US88.
The Australian market is expected to tread water today, as traders had little guidance from overseas market. Markets rose in Europe and eased in the US as the earning season progressed. Locally the RBA will be releasing their meeting minutes today.
The SPI Futures is trading above the key support level of 4000, ended up 0.1% (or 1 points) at 4,073. The key levels for our index today are 4020 to 4100. Australian investor sentiment was buoyed yesterday by rising commodity prices and the banks continue to hold up well in the chase for yield.
See below for ASX listed companies in the news today.
Economics News Today
* RBA meeting minutes.
US markets eased overnight as the financial stocks gave back some of their gains in a busy reporting period for the sector. The International Monetary Fund (IMF) has trimmed its forecast for global economic growth by 0.1 percentage point to 3.5%.
The three benchmark indexes eased. In the broader market the industrial and consumer sectors led the falls, as US retail sales disappointed and investors prepared for a busy week of earnings reports.
In economic news the Commerce Department reported US retail sales fell for the third straight month in June, missing econmists’ estimates and recording the first 3-month streak of declines since 2008. There were mixed indications on the state of the US economy with The New York Federal Reserve Bank’s Empire State Manufacturing Survey reported manufacturing activity in New York rose more than expected this mont, but US business inventories also rose more than expected in May, according to the Commerce Department.
In corporate news Citigroup edged up 0.6% after reporting better-than-expected earnings, while companies like IBM, Goldman Sachs and General Electric are due to report later in the week. Facebook fell 8% for its fifth straight daily decline, while Alpha Natural Resources the coal mining company plunged -10% after a broker downgrade.
All ten company groups that make up the S&P index traded generally lower, with Materials down -0.4%, Energy sector up 0.3%, Financials sector down -0.2%, Industrials sector was down -0.7%, Health Care up 0.2%, Technology was down -0.1%, while Consumer Staples were down -0.6%.
The Dow Jones closed down -0.4% (or -50 points) at 12,727, the S&P 500 index down -0.2% (or -3 points) at 1,353, the Nasdaq ended down -0.4% (or -11 points) at 2,896 and the smaller cap Russell 2000 was down -0.5%.
European stock markets rose modestly overnight in a choppy trading session. The Stoxx Europe 600 Index rose 0.2%, extending the index’s longest stretch of weekly gains for over 2-years.
Markets lacked direction and the trading volumes were anemic. The German Federal Constitutional Court announced that it decide on the lawsuits challenging the Germany’s participation in the European Stability Mechanism and the eurozone’s fiscal compact on on 12 September. The Wall Street Journal (WSJ) has reported that the European Central Bank is advocating imposing losses on holders of senior bonds issued by struggling banks, a suggestion finance ministers have rejected in fear that it would freeze the financial banking system.
In London the FTSE 100 index closed down -0.1% (or -4 points) at 5,662, the German DAX was closed up 0.1% (or 8 points) at 6,565, while in France the CAC was closed down -0.1% (or -1 points) at 3,180, Spain closed down -2.0% and Italy closed down 0-.4%. Greece down -0.3%.
Asian stocks markets were mixed yesterday, with China still underperforming at 4-year lows and most other markets up around 0.3%.
Across the region the miners and transport sectors weighed on the indexes. Investors in China were were disappointed over comments made by Premier Wen Jiabao that the Chinese economic recovery is not yet stable and that there may be more hardship for some time. The comments come after the country reported that its GDP growth fell below 8% for the first time since the GFC. These comments plus a number of “blue-chip” corporate profit warnings by telecom and airline companies spooked investors.
In China the SSE Composite closed down -1.7% (or -38 points) at 2,147, while in Hong Kong the Hang Seng Index closed up 0.2% (or 67 points) at 19,121, and in Japan the Nikkei 225 Index was up 0.1% (or 4 points) at 8,724, South Korean KOSPI closed down -0.3% for the session, while the Indian market closed down -0.6%.
The Dollar Index was higher at 83.14 on a lower Euro, while the Australian Dollar last traded higher at 1.0242. Commodities prices traded lower.
For the session the Benchmark crude NYMEX for August delivery was up 1.3% settled at $US88.20. Copper prices are looking for key support level as Copper for August delivery was down -0.4% at $US3.4890, while August Gold was down -0.2% (or -$US3.20) at $US1,588.80.
ASX News Today
ANZ – ANZ Banking Group will keep its home loan rates on hold.
ORG – Origin says the upgrade of its gas project in Bass Strait has hit problems with the failure to install a compression module on an offshore platform.
PFL – Patties Foods the pie maker expects full year profit to increase by up to 7% as it continues to develop new products in the face of difficult trading conditions.
SGT – SingTel says commuters will start receiving phone and internet coverage in some of Sydney’s train tunnels this week – 16 years after Optus first offered to carry out the work.
SWM – Seven West Media is raising $440 million (at a 18.5% discount) to help reduce its debt pile while advertising markets remain subdued.
TLS – Telstra may add to the $NZ840 million it will get from the sale of its New Zealand unit by swapping certain spectrum rights with Vodafone NZ that could then be on-sold.
VTA – Viterra says the Canadian government has approved commodities trader Glencore International’s $6 billion takeover of dual-listed agribusiness Viterra Inc, but the transaction still requires Chinese regulatory approval.
WBC – Westpac Banking Corporation is raising $500 million through the issue of subordinated notes.
WES – Wesfarmers says a Victorian judge has granted an interim order prohibiting striking workers from blocking delivery trucks at a Coles warehouse in Melbourne’s north.
WHC – Whitehaven Coal’s shares jumped over 18% in response to billionaire Nathan Tinkler’s takeover offer of $5.20/share cash made late on Friday.
WPL – Woodside Petroleum not disturb fossilised dinosaur footprints if goes ahead with building its $30 billion gas development in the Kimberley region, WA..
Grange Resources Ltd (GRR) June Quarterly Report
International Ferro Metals Q4 2012 Trading statement
Rio Tinto Ltd (RIO) Q2 2012 Production Report
Henderson Group (HGG) Trading statement
ASX – to open lower
US & UK/Europe – mixed
Commodities Stock Index down -0.2%
Gold Stocks Index down -0.6%
Oil Stocks Index up 0.3%
US ADRs – Broadly lower!!…
BHP down -0.7%, RIO down -1.2%; AWC down -1.1%
ANZ up 0.2% & NAB down -0.6%
NEM down -1.4%, JHX up 0.5%, NWS down -0.4%
By Michael Hevern
Head of Research
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