* US stock markets rallied for a fifth straight day.
* European stock markets rose for the fourth day, again finishing at 4-month highs overnight. The Stoxx Europe 600 index rose 0.4%.
* Asian stock markets rose yesterday, as traders were buoyed by key news out of Chinese economic reports.
* Commodities prices higher, Gold prices are trading around $US1,620 while crude-oil closed up around $US93.35.
The Australian market looks set to open positively, as we had positive leads from the US and European as optimism remains that central banks may act to stimulate their respective economies. Reporting today: Crown (CWN) and Goodman Group (GMG).
The SPI Futures is trading above the key support level of 4180, ended up 0.1% (or 3 points) at 4278. The key levels for our index today are 4250 to 4300.
See below for ASX listed companies in the news today.
US stock markets edged higher for a fifth straight day, as investor sentiment was boosted by improving trade and weekly jobs data.
The three benchmark indexes ended flat, with the tech-heavy Nasdaq leading up 0.3%, and the Dow Jones easing a touch, but these indexes remain near 4-year highs. In a “Risk-On” move the materials, energy and technology sectors led the gains up around 0.5%, while consumer staples weighed.
Labor Department figures showed jobless claims unexpectedly dropped by 6,000 to 361,000 in the week ended 4 August. This latest job data comes on the back of last week’s monthly jobs figures which showed the unemployment rate climbed to a five-month high of 8.3 percent in July, which extent the period of above 8% unemployment since February 2009, the longest stretch since World War II. The July employment report was a positive surprise as 163,000 workers were added to payrolls last month following a 64,000 increase in June.
Traders are still betting on a QE3, as the world’s largest economy, has an issue with its stubborn unemployment rate, and needs a boost to prevent the ongoing European debt crisis and approaching US fiscal cliff from stalling the modest economic expansion. The Fed said at its FOMC meeting last week that it “expects economic growth to remain moderate over coming quarters”, it “will closely monitor incoming information on economic and financial developments”, and “will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability”.
With the benchmark indexes remaining near 4-year highs, investors are cautiously optimistic of further monetary easing in the coming months.
All ten company groups that make up the S&P index traded mixed, with Materials up 0.6%, Energy sector up 0.7%, Financials sector down -0.1%, Industrials sector was up 0.1%, Health Care down -0.1%, Technology was up 0.3%, while Consumer Staples were down -0.4%.
The Dow Jones closed down -0.1% (or -1 points) at 13,165, the S&P 500 index up 0.1% (or 1 points) at 1,403, the Nasdaq ended up 0.3% (or 7 points) at 3,018 and the smaller cap Russell 2000 was up 0.3%.
European stocks climbed for a fifth day overnight, as the reporting season rolls on.
The Stoxx 600 rose 0.4%, to its highest close since mid-March, as this index has rallied 16% from its 2012 June lows and is up for 9-straight weeks. The move higher is supported by policy makers eased repayment terms for Spanish lenders and growing optimism that central banks globally will add more stimulus. So far 261 companies in the Stoxx 600 have reported half-yearly profit this earnings season, 60% have exceed expectations despite the ongoing eurozone debt crisis.
Across the region the banking stocks have rebounded sharply since 26 July, when the ECB President Mario Draghi pledged to do “whatever it takes” to preserve the euro, with some banks doubling in value. In London the British exports have fallen in the second quarter, producing a record trade deficit, owing to the eurozone crisis.
Traders remain convinced there will be further monetary easing measures by the ECB and EU leaders to address the worsening eurozone debt crisis.
In London the FTSE 100 index closed up 0.1% (or 5 points) at 5,851, the German DAX was closed down -0.1% (or -1 points) at 6,965, while in France the CAC closed up 0.5% (or 18 points) at 3,456 and Spain closed down -0.5%.
Asian stock markets closed higher yesterday, on hopes the Chinese government will added to easing measures after its CPI report showed Chinese inflation cooled.
The Chinese market rose again yesterday, appearing to have found support in recent days at a key level, as there is increasing speculation that Chinese policy makers will do more to stimulate the economy, should the European crisis deepen. The National Bureau of Statistics reported Chinese consumer prices (CPI) rose 1.8% from a year earlier (down from a 2.2% gain in June), while industrial production growth cooled in July. Traders are anticipating more affirmative action from the Chinese central banks in terms of additional easing, as growth-sensitive stocks have seen a turnaround in the past couple of week. There is also talk that miners and energy company share prices are lagging gains in the underlying commodities markets and that for this reason they are undervalued for their future potential earnings.
In China the SSE Composite closed up 0.6% (or 13 points) at 2,174, while in Hong Kong the Hang Seng Index closed up 1.0% (or 204 points) at 20,269, and in Japan the Nikkei 225 Index was up 1.1% (or 97 points) at 8,978, South Korean KOSPI closed up 1.9% for the session, while the Indian market closed down -0.2%.
The Dollar Index was lower at 82.01 on a lower Euro, while the Australian Dollar last traded higher at 1.0573. Commodities prices traded higher.
For the session the Benchmark crude NYMEX for August delivery was up 0.1% settled at $US93.35. Copper prices are looking for key support level as Copper for August delivery was up 0.1% at $US3.425, while August Gold was up 0.3% (or $US4.20) at $US1,620.
ASX News Today
AVJ – AV Jennings the residential developer, says its short-term outlook for the property market remains uncertain after it posted a $29 million full year loss.
BEN – Bendigo and Adelaide Bank has sold its 7.8 percent stake in listed wealth management firm IOOF for $110 million (or $6.16/share).
FXL – Flexigroup the Australian financial services company, says its cash profit is likely to grow by up to 16% in the year ahead as it searches for a new chief executive.
HDF – Takeover target Hastings Diversified Utilities Fund says it will consider an increased offer from pipeline operator APA Group.
NSW – Newscorp says its struggling Australian newspapers have helped drag down News Corporation’s performance enough to produce a 4Q loss of $US1.6 billion.
TAH – Tabcorp Holdings gambling firm says 20% of its online wagering turnover is being placed through mobile devices such as smartphones and tablets.
TLS – Telstra shares have been marked down despite the company growing profits and boosting mobile subscriber numbers.
WEB – Webjet the online travel agent posted a net profit increase of 25% to $13.6 million for 2012 as consumer inquiries to the site through mobile devices doubled.
Goodman Group (GMG).
ASX – to open easier
US & UK/Europe – higher
Commodities Stock Index up 0.5%
Gold Stocks Index up 1.1%
Oil Stocks Index up 0.7%
US ADRs – Broadly higher!!…
BHP up 0.8%, RIO up 0.5%; AWC up 6.8%
ANZ up 0.4% & NAB up -1.3%
NEM up 0.6%, JHX up 0.2%, NWS down -0.3%
By Michael Hevern
Head of Research
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