* US stock markets jumped on the back of ISM and employment surprises.
* European stock markets turned to “Risk-On” trading, after reconsidering ECB call to action over the continuing debt problems in the PIIGS economies.
* Asian stock markets closed lowere on Friday, but investors can expect a turnaround today.
* Commodities prices generally higher, Gold prices are trading around $US1,606 while crude-oil closed around $US91.
The SPI Futures is trading around the key support level of 4000, ended up 1.2% (or 54 points) at 4221. The key levels for our index this week are 4180 to 4330. The Australian market looks set to open higher today after a strong surge on in the US and Eurpoe after better-than-expected jobs figures boosted sentiment. Remember the eatrnings season picks up this week.
See below for ASX listed companies in the news today.
Economics News Today
July TD Securities Monthly Inflation Gauge
July ANZ Job Ads.
US Markets
US stock markets jumped on the back of ISM and employment surprises.
US stocks surged on Friday, on the back of better-than-expected economic data, as the three benchmark indexes turned around sharply up around 2% for the session, with the Dow Jones Index jump to a 3-month high.
The buying happened across the board, with most sectors up over 2% for the session. Investors cheered the ISM manufacturing and US Nonfarm payrolls figures. The Labor Department reported, US payrolls increased by a seasonally adjusted 163,000 jobs in July (better than the 100,000 forecast), but the unemployment rate rose to 8.3% (up from 8.2%). The Institute for Supply Management, reported that the service-sector activity expanded at a slightly faster pace in July than athe previous month.
We did see some short-covering after the sharp sell-off of the previous session. Commodity prices also turned around sharply.
All ten company groups that make up the S&P index traded higher, with Materials up 1.9%, Energy sector up 2.4%, Financials sector up 2.4%, Industrials sector was up 2.2%, Health Care up 1.2%, Technology was up 2.0%, while Consumer Staples were up 1.9%.
The Dow Jones closed up 1.7% (or 217 points) at 13,096, the S&P 500 index up 1.9% (or 26 points) at 1,390, the Nasdaq ended up 2.0% (or 58 points) at 2,968 and the smaller cap Russell 2000 was up 2.0%.
European Markets
European stock markets turned to “Risk-On” trading, after reconsidering ECB call to action over the continuing debt problems in the PIIGS economies. The Stoxx Europe 600 index rose 2.4%, closing higher for a ninth straight week, and is now at its highest closing level since April.
Across the region the banking sector led the gains for the end-of-week rally. It was a case of that the worst case scenario had been baked into the banking stock prices, after the ECB failed to implement a strong action plan mid-week, and bargain hunters stepped in, after some promising economic data out of the US.
Buyers stepped in, on rumors that Spain will soon make a formal request for aid to help lowering its borrowing costs, the Spanish market jumped over 6%.
Sentiment was also boosted on news that the members of German Chancellor Angela Merkel’s coalition parties had signaled that they will not stand in the way of European Central Bank chief Mario Draghi’s plan to buy government bonds. There will still be a time lag in the event (at least September) but at least the EU leaders are marking moves to address the situation.
In London the FTSE 100 index closed up 2.2% (or 125 points) at 5,787, the German DAX was closed up 3.9% (or 259 points) at 6,865, while in France the CAC closed up 4.4% (or 142 points) at 3,374 and Spain closed up 6.0%.
Asian Markets
Asian stock markets closed lower on Friday, but investors can expect a turnaround today, after an unexpected jump in European and US markets on the weekend.
On Firday traders showed their disappointment over the lack of a prescribed action plan from the ECB in relation to addressing the worsening eurozone debt crisis, but hitting the sell button. The European Central Bank (ECB) fell short of providing a strong action plan to support troubled eurozone economies. Shares across the region declined for three days after the ECB failed to deliver, and as the Fed fell short of adding stimulus to the US economy and Chinese manufacturing grew at the slowest pace in eight months.
However for the week the MSCI Asia Pacific Index was up 2.4%, recording a third advance in past five weeks, despite central banks in China, Europe and the US failing to deliver on promised new stimulus needed to bolster global economic growth.
In China the SSE Composite closed up 1.0% (or 22 points) at 2,133, while in Hong Kong the Hang Seng Index closed down -0.1% (or -24 points) at 19,666, and in Japan the Nikkei 225 Index was down -1.1% (or -98 points) at 8,555, South Korean KOSPI closed down -1.1% for the session, while the Indian market closed down -0.1%.
Commodities
The Dollar Index was higher at 82.32 on a lower Euro, while the Australian Dollar last traded higher at 1.0566. Commodities prices traded sharply higher.
For the session the Benchmark crude NYMEX for August delivery was up 4.3% settled at $US91.40. Copper prices are looking for key support level as Copper for August delivery was up 2.3% at $US3.3675, while August Gold was up 1.2% (or $US18.60) at $US1,606.
ASX News Today
APA – APA the pipeline operator is considering raising $350 million as it presses ahead with its $1.34 billion takeover bid for Hastings Diversified Utilities Fund (HDF).
BHP – BHP Billiton has dismissed suggestions it has already decided to delay its $19 billion Port Hedland harbour expansion for at least two years, but have written down $2.7 billion on its American shale assets.
CMJ – The ACCC competition watchdog has cleared the way for Rupert Murdoch’s News Corporation to buy Consolidated Media Holdings.
CWN – Crown casino group is to build a six-star hotel at Sydney’s Barangaroo development under an agreement with the site’s developer.
DLX – DuluxGroup the paintmaker wants takeover target Alesco Corporation stopped from commenting on the DuluxGroup bid unless it (Alesco) has approval from the Takeovers Panel.
DXS – Dexus Property Group has introduced a salary freeze for its senior executives to address shareholder concerns over its pay structure.
FMG – Fortescue Metals Group’s High Court challenge against the federal government’s mining tax has been adjourned for a month.
LEI – Leighton Holdings’ Middle East operation has won a contract to build Qatar’s first rail system as the country prepares for the 2022 FIFA World Cup.
OSH – Oil Search says loading operations in Papua New Guinea remain suspended after an oil spill that occurred more than a week ago.
RMD – ResMed the sleep disorder equipment supplier, sats annual profit is up 12 percent due to stronger revenue in the United States.
SDL – Sundance Resources the Australian iron ore company says its suitor Hanlong Mining has received provisional approval from Chinese regulators for a takeover.
Corporate News
Reporting today:
None.
Ex-dividend Date
None
Market Summary
ASX – to open higher
US & UK/Europe – higher
Commodities Stock Index up 2.2%
Gold Stocks Index up 1.9%
Oil Stocks Index up 2.4%
US ADRs – Sharply higher!!…
BHP up 2.8%, RIO up 5.3%; AWC down -0.3%
ANZ up 2.3% & NAB up 2.3%
NEM up 2.4%, JHX up 4.0%, NWS up 1.3%
By Michael Hevern
Head of Research
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Tags: Asian Markets, ASX, ASX News, Business News, Commodities, Crude Oil, European Markets, Ex Dividend, gold price, Nasdaq, Stock Market Analysis, stockmarket, trading, US Market wrap
