* US stock markets continued higher to new record highs, following Friday’s better than expected employment data.
* European stock markets ended higher for second session, but the gains were subdued.
* Asian stock markets ended higher for the first time in four sessions, led by the Japanese market again, but Aussie market was an exception.
* Commodities prices higher, Gold prices are now trading around $US1,241, while crude-oil traded around $US97.
The ASX market is looking to open flat today, with the 5150 level key near-term, as markets were subdued across Europe and the US markets ended flat , after the NFP employment report on Friday surprised.
The Aussie share market closed sharply lower yesterday, extending last week’s -2.5% slump, making it the market’s worst six days since June and the worst week for shares in six months. The selling was led by QBE plummeted -22% after a profit warning, weighing on sentiment and the selling in the banks continued. Among the sectors, financials plunged -1.4% while the Miners eased-02.%, but the Telecom sector rose 0.8%.
The SPI 200 futures were down -0.1% at 5,140, giving a positive lead for the ASX market today. The Australian dollar edged lower to remain around three month lows at US91.1c, as the Fed moves towards taper and the market begins to start the countdown towards eventually tightening in policy. Traders will look to the NAB Business Confidence report and monthly home loan data due out today.
The Japanese market has outperformed on the world stage.
US stock markets continued higher to new record highs, following Friday’s better than expected employment data. Traders appear to becoming more comfortable over Fed tapering, as the next FOMC meeting will be held on 17-18 December.
The three benchmark indexes edged to new record highs, as traders continued to digested the monthly employment figures. Volatility continued lower -2.7% backing off six week highs. The S&P500 closed at a new record high and the index is up 26% for the year and is on track for its best annual performance since 1999.
Eight of the ten S&P500 sectors ended higher again, with the gains dominated by the Financials and Materials sectors rose 0.4%, followed by the Tech and Consumer Discretionary sectors up over 0.3%. Ten year interest rates held after spiking higher earlier in the week.
In economic news the household wealth in the US increased in the September quarter with household net worth increasing by $US1.92 trillion (up 2.6% on quarter). The gains on stocks were pared after St Louis Fed President James Bullard said that the odds of tapering had risen given the better than expected monthly jobs report.
For the session Dow Jones closed up 0.1% at 16,025, the S&P500 closed up 0.2% at 1,808, and the NASDAQ closed up 0.2% at 4,068, while on 10-year Treasury notes eased to 2.85%.
European stock markets ended higher for second session, but the gains were subdued.
The Europe Stoxx 600 rose 0.2%, after falling -2.7% last week. Trading volumes were nearly 20% down on the monthly average. Across the region six of the ten sectors ended in the green again, with gains led by the Consumer cyclicals up 0.6% and the Financials up 0.4%, while the Energy sector led the falls down -0.4%. The index is still up around 13% for the year and is still on track for its best annual gain since 2009.
The German market ended higher again, rebounding towards all-time highs again. The index is up around 21% for the year and valuations are at their highest levels since 2009. The London market edged higher off six weeks lows, after having fallen -1.5% last week and the index is down -3.2% from its October peak.
For the session the German DAX 30 closed up 0.3% at 9,195, the UK the FTSE 100 closed up 0.1% at 6,559, the French CAC 40 closed up 0.1% at 4,134, while the Spain market closed 0.9% 9,487.
Asian stock markets ended higher for the first time in four sessions, led by the Japanese market again, but Aussie market was an exception.
The MSCI Pacific Index rebounded 0.8%, after falling -1.7% last week. The index is still up 8.7% for the year. All ten sectors ended in the green, led by the Tech and industrials sectors. Sentiment was boosted by the positive response to the better US employment figures and the improving Chinese economic data, although it missed estimates.
The Chinese market edged higher, after trading down -0.8% last week. The Chinese trade surplus widened to $33.8 billion in November, the largest since the beginning of 2009, as outbound shipments rose 12.7 percent on year and imports gained 5.3 percent (missing the forecast of 7%), while inflation slowed more than estimated. Chinese November headline CPI edged down to a three-month low of 3.0% year-on-year, while the producer price index contraction narrowed to -1.4% on year in November, compared to -1.5% in October. Inflation pressures remain manageable, with the economy stabilising, which should allow policymakers to continue focusing on policies to support growth while implementing structural reform measures into 2014.
The Japanese market has been strong and outperformed again, as it remains around its highest level since December 2007, after a report showed GDP grew 1.1 percent in the third quarter (but less than the forecast 1.6%). The Hong Kong market ended higher but still held below the 24,000 level, its highest level since April 2011.
For the session the Chinese Shanghai Composite closed up 0.1% at 2,238, the Hong Kong Hang Seng closed up 0.3% at 23,811, and the Japanese Nikkei closed up 2.3% at 15,650, while the South Korean KOSPI closed up 1.0% at 2,000.
The Dollar Index was lower 80.1 on a higher Euro, and the Aussie Dollar closed flat at US91.1c. Commodities prices were higher.
Overnight the COMEX WTI Crude for DEC13 delivery closed down -0.3% at $US97.35, the COMEX Copper for DEC13 delivery closed up 0.3% at 3.25, the COMEX Gold for DEC13 delivery closed up 1.0% at $US1,241.40.
ASX News Today
AMC – Amcor the multi-national packaging firm, says the positives outweigh the disadvantages in separating its packaging distribution business to form a new company, Orora.
ERA – Investors have sold out of Energy Resources of Australia after a toxic leak at the company’s Ranger uranium mine in the Northern Territory over the weekend.
MTS – Metcash is splitting its food and grocery business into two, reversing a 2012 decision to merge the operations.
PNA – PanAUST the Laos based copper and gold producer says full year earnings to June EBITDA would come in at the low end of guidance of $US260-$US300 million, due to higher costs.
QAN – Qantas says its budget airline Jetstar will establish a new cabin crew and pilot base in Adelaide after cutting back on services from Darwin. The Standard and Poor’s ratings agency, has lowered Qantas’s credit rating for airline to BB+, which is considered below investment grade.
QBE – QBE the insurancer plunged dropped 22 percent after the company flagged its latest profit warning of a $250 million net loss this year. QBE said insurance margin will be 6% for 2013 (down from 11%) and the FY14 insurance margin forecast of 10% looks optomistic. The North American business was deeply disappointing.
TEL – Telecom NZ has sold its Australian AAPT unit for $450 million to internet service provider TPG Telecom, beating initial expectations.
WDR – Western Desert Resources the largest new iron ore mine in the Northern Territory for 20 years has been opened in the Roper Region.
ASX – to open flat
US & UK/Europe – flat
US ADRs – Broadly lower!!…
ANZ -1.3%, NAB -1.3%, NWS -0.7%
AWC +0.5%, BHP -0.3%, RIO +0.1%, NEM +2.5%
By Michael Hevern
D2MX Investment Advisor
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