* US stock markets rallied for a sixth straight day, closing above 4-month highs.
* European stock markets rose again overnight, and are higher for an eleventh week.
* Asian stocks generally drifted higher, but still underperform.
* Commodities prices lower, Gold prices are trading around $US1,617 while crude-oil closed around $US96.
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 continues today.
The SPI Futures is trading above the key support level of 4200, ended up 0.1% (or 5 points) at 4335. The key levels for our index this week are 4280 to 4400.
See below for ASX listed companies in the news today.
US stock markets rose on Friday, finishing up for the past six weeks ending near 4-year highs. The three the benchmark indexes all closed higher due to better-than-forecast economic data.
Better-than-forecast data on consumer confidence and leading economic indicators have supported the move higher last week. The S&P 500 approached its highest level since 2008, the cost of using options to protect against declines in the benchmark index hovered around five-year lows as the VIX volatility index closed at 13.5.
In economic news, US consumer confidence and leading economic indicators are improving with as the Thomson Reuters preliminary August index of consumer sentiment increased to 73.6, its highest level since May (up from 72.3). Elsewhere the Conference Board’s gauge confidence for the outlook for the next three to six months increased 0.4 percent. This follows reports earlier last week that showed better-than-expected retail sales figures and applications for building permits rose to the highest since August 2008.
For the week the Dow Jones closed up 0.5%, the S&P 500 index up 0.9%, the Nasdaq ended up 1.8% and the smaller cap Russell 2000 was up 2.3%. Investors will be watch out for news from central banks this week, plus the earnings season continues, but trading volumes remain at lows not seen since before the GFC in 2008.
All ten company groups that make up the S&P index traded mixed, with Materials down -0.2%, Energy sector down 0.1%, Financials sector up 0.3%, Industrials sector was up 0.5%, Health Care down -0.5%, Technology was up 0.6%, while Consumer Staples were up 0.4%.
The Dow Jones closed up 0.2% (or 25 points) at 13,275, the S&P 500 index up 0.2% (or 2 points) at 1,418, the Nasdaq ended up 0.5% (or 14 points) at 3,077 and the smaller cap Russell 2000 was up 0.8%.
European stock markets rose for a eleventh consecutive week, recording their longest winning streak since January 2006.
The Stoxx Europe 600 increased 1.1 percent for the week, again led by gains in the banking sector. This index is now up 17% since its June lows, and is at a 13-month high, as investors see that the eurozone policy makers will eased repayment terms for Spanish banks and they grow more confident that central banks will introduce new stimulus measures.
Spanish 10-year yield fell eight basis points to 6.44 percent, while the 2-year yield dropped 22 basis points to 3.77. Bankinter SA and Bankia SA rallied more than 2 percent on hopes that the European Union will disburse the first installment of a EUR100 billion bailout facility to Spanish lenders. HSBC research analysts expect 2-year yields to fall to as low as 2 percent should the ECB buy debt through its bond-purchase program.
For the week in London the FTSE 100 index closed up 0.1%, the German DAX was closed up 1.5%, while in France the CAC closed up 1.4%.
In London the FTSE 100 index closed up 0.3% (or 18 points) at 5,852, the German DAX was closed up 0.6% (or 44 points) at 7,041, while in France the CAC closed up 0.2% (or 8 points) at 3,488 and Spain closed up 1.9%.
Asian stock markets have underperformed again last week, due to ongoing concerns over slowing global growth. Investors are showing concern that the central bank may hold off on further easing measures in the near-term.
The Chinese market is down at 2-week lows, again approaching its 4-years lows, as traders are concerned over the nation’s economic slowdown as it is curbing demand for products from copper to household appliances. The Chinese market has been holding back the region, as comments from the Chinese central bank reveal that it is concerned about a rebound in inflation. The Chinese central bank has left the reserve ratio for the biggest banks at 20 percent since mid-May and has lowered interest rates in June and July.
For the week in China the SSE Composite closed down -2.5%, while in Hong Kong the Hang Seng Index closed down -0.1%, and in Japan the Nikkei 225 Index was up 3.1%. Europe will be the focus again this week.
In China the SSE Composite closed up 0.2% (or 3 points) at 2,114, while in Hong Kong the Hang Seng Index closed up 0.7% (or 153 points) at 20,116 and in Japan the Nikkei 225 Index was up 0.8% (or 69 points) at 9,162, South Korean KOSPI closed down -0.6% for the session, while the Indian market closed up 0.5%.
The Dollar Index was higher at 82.54 on a lower Euro, while the Australian Dollar last traded higher at 1.042. Commodities prices traded lower.
For the session the Benchmark crude NYMEX for August delivery was up 0.4% settled at $US96. Copper prices are looking for key support level as Copper for August delivery was up 1.1% at $US3.4195, while August Gold was up 0.1% (or -$US1.70) at $US1,617.50..
ASX News Today
ABC – Adelaide Brighton the building materials provider is optimistic of increasing its full year earnings, despite the challenges facing the residential and commercial property markets.
AMP – AMP the wealth manager beat expectations with a seven per cent rise in underlying first half profit.
ASX- ASX Ltdthe equity market operator, has reported a four per cent drop in annual net profit, due to decreased investor activity arising from the European debt crisis.
AWC – Alumina Ltd has flagged an end to Chinese control over aluminum prices as it posts a $US14.6 million half year loss.
BHP – BHP Billiton has flagged potential job losses at some of its Australian operations as it reins in costs amid falling
BXB – Brambles the global pallet and container business has lifted annual profit by more than 20 percent and expanded its overseas markets in the face of weak global conditions.
DXS – Dexus Property Group has suffered a 67 percent slump in full year profit, but is predicting a pick-up in earnings in the FY13.
IIN – iiNet sales team will soon follow the trucks that have arrived in towns across Australia to roll out the $37
billion national broadband network (NBN).
IVA- Ivanhoe Australia plans to cut costs by almost $100 million and reduce spending by up to $74 million over the next two years as it tries to improve cash flow and look to joint ventures in volatile market conditions.
FXJ – Fairfax sayas the Ellerston Capital, a fund manager controlled by Australian billionaire James Packer’s family interests, has emerged as a substantial shareholder in online auction site Trade Me.
GFF – Goodman Fielder has played down reports that the world’s biggest palm oil processor has its eye on the breads and spreads maker.
IVC – Invocare Australia’s biggest funerals operator is on the hunt for acquisitions after lifting its interim profit by 40 per cent.
MCR – Mincor Resources has achieved a return to profitability despite a falling nickel price.
ORL – Oroton says the top American designer Ralph Lauren is ending its 23-year licence deal with Australian accessories group.
PTM – Platinum Asset Management the listed funds manager expects a pick up in world share markets that will assist it to improved profitability.
TSE – Transfield Brothers Luca and Guido Belgiorno-Nettis will retire as directors of construction and maintenance group Transfield Services, ending a longstanding link between the company and its founding family.
TTS – Tatts Group is suing the Victorian government for hundreds of millions of dollars in compensation following the expiry of its gaming operator’s license.
WES – Wesfarmers the Canny shoppers are seeking value for money to combat falling house prices and shrinking superannuation funds, Wesfarmers boss Richard Goyder says as his conglomerate posts an 11 per cent lift in full-year profit.
ASX – to open higher
US & UK/Europe – higher
Commodities Stock Index down -0.4%
Gold Stocks Index down -1.2%
Oil Stocks Index down -0.1%
US ADRs – Broadly mixed!!…
BHP down -0.1%, RIO down -1.6%; AWC down -4.6%
ANZ up 1.8% & NAB down -0.7%
NEM down -0.9%, JHX down -0.6%, NWS down -0.9%
By Michael Hevern
Head of Research
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