* US stock markets rallied for a fourth straight day.
* European stock markets eased backing off 4-month highs overnight.
* Asian stock markets were mixed yesterday, as traders await key news out of Chinese economic reports.
* Commodities prices higher, Gold prices are trading around $US1,616 while crude-oil closed up around $US93.35.
The Australian market looks set to open flat ahead of our employment report and the release of key Chinese data today. We had mixed leads from the US and European as optimism remains that central banks may act to stimulate their respective economies. Reporting today: Aquarius Platinum (AQP), Aurora oil & Gas (AUT), Newscorp (NWS), Tabcorp (TAH) and Telstra (TLS).
The SPI Futures is trading above the key support level of 4180, ended up 0.2% (or 7 points) at 4287. The key levels for our index today are 4240 to 4300.
See below for ASX listed companies in the news today.
Economics News Today
* July Employment Figures.
US Markets
US stock markets rallied for a fourth straight day, as investors held on to the hopes of more stimulus from the Federal Reserve and the European Central Bank.
The three benchmark indexes were flat, with the tech-heavy Nasdaq easing a touch, but these indexes renmain near 4-year highs. The defensive sectors led the gains with Healthcare and Consumer Staples up over 0.5%, as investors move money iton stocks whose earnings are less dependent on economic growth, and cyclicals, which are more tied to the performance of the domestic economy.
Mixed signals as traders bought up yesterday, after news that the head of the Boston Fed for the US Federal Reserve had said that the US central bank should launch an open-ended bond-buying program, however the head of the Dallas Federal Reserve said overnight that the existing easing measures were adequate at this stage.
All ten company groups that make up the S&P index traded higher, with Materials up 0.1%, Energy sector up 0.1%, Financials sector up 0.4%, Industrials sector was down -0.1%, Health Care up 0.4%, Technology was up 0.1%, while Consumer Staples were down -0.5%.
The Dow Jones closed up 0.1% (or 7 points) at 13,175, the S&P 500 index up 0.1% (or 1 points) at 1,402, the Nasdaq ended down -0.2% (or -5 points) at 3,011 and the smaller cap Russell 2000 was down -0.2%.
European Markets
European stock markets eased, backing off 4-month highs overnight. The Stoxx Europe 600 index eased -0.4%.
Across the region the Financials edged higher up 0.3%, but the Energy, Industrials, Materials and Consumer Cyclical sector were all down over -1.2% for the session. The earnings season has been disappointing, according to Bloomberg of the 532 companies in western Europe to have reported results this quarter, 52 percent fell short of profit forecasts and earnings fell -5.7 percent in the period.
In London the Bank of England (BoE) cut its growth forecast (with forecast GDP of 2%) and said inflation will be below its target of 2% (at around 1.6%) in two years, as the crisis in the eurozone area and the UK fiscal tightening weighed on demand.
Greece is facing another credit downgrade (form its CCC rating, eight levels below investment grade), as the S&P Rating Agency is citing concerns over the worsening economy raises the likelihood the nation will need more support from the European Union and International Monetary Fund rescue package.
Investor are awaiting announcements of more stimulus, as expectations that policy makers will take action to address the eurozone debt crisis by bringing down borrowing costs for Spain and Italy. German industrial production declined in June, pointing to a slowdown in the eurozone’s strongest economy.
In London the FTSE 100 index closed up 0.1% (or 5 points) at 5,845, the German DAX was closed down -0.1% (or -1 points) at 6,966, while in France the CAC closed down -0.4% (or -15 points) at 3,438 and Spain closed down -0.8%.
Asian Markets
Asian stock markets were mixed yesterday, as traders await key news out of Chinese economic reports.
The Chinese market edged higher, ahead of CPI, Retail Sales and Industrial Production reports due out today. The defensive sectors such as Health-Care and Consumer Staples weighed, and traders banked on the government to take steps to support slowing economy. The Shanghai Composite has plunged -12% from its yearly highs in March, due to concerns the economic slowdown is deepening.
In Hong Kong the market eased ahead of the Chinese data, while in Japan the market closed higher on the back of the technology sector gains.
In China the SSE Composite closed up 0.2% (or 3 points) at 2,161, while in Hong Kong the Hang Seng Index closed down -0.1% (or -7 points) at 20,066, and in Japan the Nikkei 225 Index was up 0.9% (or 77 points) at 8,881 South Korean KOSPI closed up 0.9% for the session, while the Indian market closed down -0.1%.
Commodities
The Dollar Index was higher at 82.34 on a lower Euro, while the Australian Dollar last traded lower at 1.0574. Commodities prices traded higher.
For the session the Benchmark crude NYMEX for August delivery was up 0.3% settled at $US93.35. Copper prices are looking for key support level as Copper for August delivery was up 0.6% at $US3.4215, while August Gold was up 0.2% (or $US3.20) at $US1,616.
ASX News Today
AAC – Australian Agricultural Company our largest listed cattle producer, has narrowed its financial losses and flagged an improvement in cattle prices and looking towards the growing market for meat in China, as it reduces dependence upon Indonesia as a market for live exports of cattle.
BANKs – Banking share jumped after the Australian banking industry said it is trying to reduce its reliance on foreign money in the face of high offshore funding costs.
AGO – Atlas Iron says China’s demand for iron ore remains strong, just as the demand for labour in Australia’s resources areas begins to cool.
CPU – Computershare the shareholder services group, says full year profit has fallen 41 percent because of weak corporate activity.
EVR – Endeavour Mining Corporation, the gold producer has brokered a late night deal to take over Canada’s Avion Gold, making it one of West Africa’s largest mining companies.
FMG – Fortescue Metals Group says the construction and ramp up of its Solomon mines will be critical to achieving the company’s iron ore production targets next year.
QAN – Qantas can use as many contract staff as it likes, after the industrial tribunl ruled in Qantas’s favour in the long-running dispute with the Transport Workers Union.
RIO – Rio Tinto has provided a bullish outlook for China predicting a quick recovery in its pace of growth, after the miner’s profits fell due in part to weaker demand from Asia.
SGP – Stockland the property developer says real estate markets are at their worst in 20 years due to weak consumer confidence.
UGL – United Group the engineering firm UGL has secured a contract worth almost $100 million to carry out work at BHP’s Jimblebar mine in WA.
Corporate News
Reporting today:
Aquarius Platinum (AQP)
Aurora oil & Gas (AUT)
Newscorp (NWS)
Tabcorp (TAH)
Telstra (TLS)
Ex-dividend Date
None
Market Summary
ASX – to open easier
US & UK/Europe – mixed
Commodities Stock Index up 0.4%
Gold Stocks Index down -0.6%
Oil Stocks Index up 0.1%
US ADRs – Broadly mixed!!…
BHP up 0.8%, RIO up 2.8%; AWC up 1.4%
ANZ up 0.8% & NAB up 1.5%
NEM up 1.1%, JHX down -2.4%, NWS
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
