* US stock markets rise for a second session, as investors speculate on Fed stimulus continuing.
* European stocks markets edged modestly higher, still recovering from their longest losing streak in 14-months.
* Asian stock markets are expected to see some recovery today on the back of positive leads from the US and Europe.
* Commodities prices were lower, Gold prices are trading around $US1,366 while crude-oil closed around $US98.
The Aussie market is looking open higher again today, with the 4850 level now key, as stock prices rebounded in Europe and in the US overnight. The banks are leading the way. It is index options expiry tomorrow.
SPI Futures is trading around the key level of 4850, ending up 0.7% (or 35 points) at 4,855. The key levels for the ASX200 index today are 4820 to 4900.
S&P500 within 1% of May peak, 50-day moving average is key near-term.
US stock markets rise for a second session, as investors speculate on the prospect that the Federal Reserve will confirm the fate of monetary stimulus after its meeting today.
The three benchmark indexes all ended up around 0.9% for the session. The Dow Jones rebounded towards the 15,300 level, while the S&P500 rose to around the 1650 level. The 50-day moving average levels have held, as the “buy-on-the-dip” mentality is being rewarded yet again. The S&P500 is now only 1% below its May peak. All ten S&P sectors ended in the green, with gains led by the Industrials and Consumer Discretionary sectors up over 1.1%, closely followed by the Technology, Materials and Financials sectors all up around 0.7%.
Traders continued to buy ahead of the Fed meeting speculating that concerns over the Fed “tapering” are premature as the economy is still in need of stimulus, particularly as the effects of sequestration are still apparent. Investors will be keen to see “effective communication” on the Fed’s stimulus exit strategy as a result of the meeting.
In economic data housing figures missed estimates as a Commerce Department report showed that housing starts climbed 6.8 percent in May to a 914,000 annualized rate after a revised 856,000 pace in April (below the 950,00 forecast), while applications to build one family homes increased 1.3 percent, the fastest since May 2008.
For the session Dow Jones closed up 0.9% at 15,318, the S&P500 closed up 0.8% at 1,652, and the NASDAQ closed up 0.9% at 3,482.
European stocks markets edged modestly higher, still recovering from their longest losing streak in 14-months. The Europe Stoxx 600 ended flat for the session and is now down -5.7% since US Fed hinted at tapering its stimulus.
In Germany the market edged higher as a report showed German investor confidence increased this month, with the ZEW Center for European Economic Research, reporting its index of investor and analyst expectations rose to 38.5 this month (up from 36.4), with zero the dividing line between optimism and pessimism.
In London markets the market rose for a fourth session, but investors are focusing on the defensive sector ahead of the US Fed meeting. UK stocks rallied in early morning trading due to speculation China may ease its monetary policy.
In the UK the FTSE 100 closed up 0.7% at 6,374, the German DAX 30 closed up 0.2% at 8,230, the French CAC 40 closed down -0.1% at 3,861, while the Italian market closed up 0.1% at 16,198.
Asian stock markets eased yesterday, after recording their best 2-day gains since September. We expect some recovery today on the back of positive leads from the US and Europe.
The MSCI Asia Pacific Index eased back -0.4% for the session, and is down -2% for the month, due to concerns over central bank “tapering”. The index is now down -9% from its May peak. Approximately $US2.7 trillion has been erased from global markets since Fed Chairman Bernanke said on 22 May US policy makers could scale back stimulus efforts if the employment outlook shows “sustainable improvement.”
The Chinese market traded higher, while in Japan and Hong Kong the markets eased. The Japanese market gave back early gains, as export stocks rose on the back of a weaker yen. A weaker yen boosts the value of overseas income at carmakers and electronics manufacturers when funds are repatriated.
Chinese stocks continued lower, remaining near 6-month lows, led by the property and materials sectors, after the Beijing government tightened rules for real estate projects to contain a rebound in home prices. The materials sector has weighed because of recent reports that showed industrial production and exports came in below forecasts and higher money market rates fueled concern about tighter liquidity.
For the session the Chinese Shanghai Composite closed up 0.1% at 2,159, the Hong Kong Hang Seng closed down 0.0% at 21,226, and the Japanese Nikkei closed down -0.2% at 13,007, while the South Korean KOSPI closed up 0.9% at 1,901.
The Dollar Index was higher at 80.63 on a lower Euro, and the Aussie Dollar closed down at 0.9484. Commodities prices traded mixed.
Overnight the COMEX WTI Crude for MAY13 delivery closed up 0.7% at $US98.44, the COMEX Copper for May 13 delivery closed down -1.3% at 3.155, the COMEX Gold for JUN13 delivery closed down -1.2% at $US1,366.90.
ASX News Today
AGL – AGL the energy retailer has won government approval to raise gas prices in NSW by 9.2 percent.
CBA – CBA was aware of forgery allegations and the overcharging of clients by a key senior financial planner at least nine months before he resigned.
ELD – Elders has rebuked a takeover bid for its rural services division by rival Ruralco.
NAB – NAB’s CEO believes Australia is not heading towards a recession, but expects economic activity to remain subdued until the September election.
NSW – the new News Corp Inc start trading today from 12 noon.
QAN – Security screening staff at Perth Airport’s Qantas terminal have extended industrial action for a fourth week, as they remain in a wage dispute with employer MSS Security.
SWJ – Chinese energy company Shandong has raised funds to buy a subsidiary of Australian gold miner Stonewall Resources.
UGL – Uniteed Group the engineering firm has secured $120 million in new contracts across its global property services business, DTZ.
ASX – to open higher
US & UK/Europe – higher.
US ADRs – Broadly higher!!…
ANZ -0.9%, NAB -0.9%, NWS +1.1%
BHP -1.1%, RIO +0.4%, NEM -2.5%
By Michael Hevern
D2MX Investment Advisor
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