* US stock markets reversed early gains sharply overnight, due to concerns further stimulus.
* European stocks markets ended flat overnight, hovering around 5-year highs.
* Asian stock markets eased back from 5-year highs, as the financial sector weighed again.
* Commodities prices lower, Gold prices are trading lower around $US1,367, while crude-oil closed around $US94.
The Aussie market is backing off 5-year highs, weakening below the 5200 and is looking to open lower today, as stock prices closed flat in Europe, but ended sharply lower in the US after news from the Fed. The RBA said record-low rates are “appropriate to encourage sustainable growth” as business confidence was cited as remaining weak.
SPI Futures is trading just above the key level of 5200, ended down -0.4% (or -20 points) at 5,151. The key levels for the ASX200 index today are 5120 to 5180. The Aussie dollar was slammed overnight down towards US96c.
In economic data we have Manufacturing PMI data from Europe and China today.
Key day reversal on the S&P500 index may trigger test of 50-day moving average near-term – would need to see follow-through tonight for confirmation.
See below for ASX listed companies in the news today.
US stock markets reversed early gains sharply overnight, due to concerns that the Federal Reserve will scale back its stimulus efforts if the labor market continues to improve.
The three benchmark indexes all ended down around -0.8% for the session. The Dow Jones remained around the 15,300 level. The S&P500 again held above the 1650 level around all-time highs, but the markets reversed early gains sharply and ended up giving back all the gains of the past 3-days. It will be a testing night tonight as the 13-day support level will be under pressure.
All ten S&P sectors ended lower with falls led by the Utilities, Materials and Telecom sectors all down -1.2%, closed followed by Financial, Energy and Industrials.
US stocks initially rallied after Fed Chairman Ben Bernanke said in prepared remarks to Congress that a premature withdrawal of quantitative easing would put the economic recovery at risk. Traders started selling after further remarks revealed the Fed could “step down” the pace of asset purchases in the next few meetings if the labour market continues to improve and “we have confidence that that is going to be sustained”.
The S&P 500 has risen for past 6-months without a 5% pullback and the 2.5% turnaround overnight may portend further weakness/profit-taking in the near-term. In commodities gold and silver eased again after the comments from the Fed overnight
For the session Dow Jones closed down -0.5% at 15,307, the S&P500 closed down -0.8% at 1,655, and the NASDAQ closed down -1.1% at 3,463.
European stocks markets ended flat overnight, hovering around 5-year highs.
The Europe Stoxx 600 ended rose 0.2% for the session, after comments that the Fed would keep its bond-buying program in place. The index is up 10% for the year and at its highest level since June 2008, and is on course for a 12th straight month of gains, the longest winning streak since 1997. Commodity related firms rallied again on the back of higher metals prices on the LME exchange.
It remains clear that the ECB will remain supportive of equities going forward. The index has rallied 97 percent since March 2009 as European Central Bank President Draghi pledged to preserve the euro and the Fed embarked on three rounds of stimulus.
The German market held a new all-time high, up for an twelfth straight day, its longest winning streak since July 2005 (the market is up around 12% for the year). In London traders pushed the FTSE to new 13 year highs, after last week the Bank of England (BoE) voted to keep quantitative easing at GBP375 billion ($US568 billion) this month.
In the UK the FTSE 100 closed up 0.5% at 6,840, the German DAX 30 closed up 0.7% at 8,531, the French CAC 40 closed up 0.4% at 4,051, while the Italian market closed up 0.7% at 17,545.
Asian stock markets eased back from 5-year highs, as the financial sector weighed again.
The MSCI Asia Pacific Index fell -0.1% for the session. The index is up 10% for the year and is on track for the longest winning streak since September 2009, on optimism over central bank stimulus, Japan will continuing to deploy more measures to beat deflation and as centrals banks remain supportive in the US and Europe.
In Japan the market pushed above the 15,600 at its highest level since December 2007, as exporters gained on the back of a weaker yen.
The Chinese market fell for the first time in 6-days, but has still risen 6% in the past week and has recorded its longest winning streak in 3-months, as the Shanghai Composite is now in the positive for the year (having fallen as much as -9% from its February peak), and yesterday the market fell as declines by technology and energy producers overshadowed gains in the property and consumer staples sectors. In Hong Kong the market eased as well.
For the session the Chinese Shanghai Composite closed down -0.1% at 2,302, the Hong Kong Hang Seng closed down -0.5% at 23,261, and the Japanese Nikkei closed up 1.6% at 15,627, while the South Korean KOSPI closed up 0.6% at 1,994.
The Dollar Index was higher at 84.25 on a lower Euro, and the Aussie Dollar closed down at 0.9693. Commodities prices traded lower.
Overnight the COMEX WTI Crude for MAY13 delivery closed down -2.0% at $US94.28, the COMEX Copper for May 13 delivery closed up 1.1% at 3.381, the COMEX Gold for JUN13 delivery closed down -0.7% at $US1,367.40.
ASX News Today
ABC – Adelaide Brighton the cement and lime manufacturer, expects net profit in 2013 to be flat or slightly below 2012 levels due to the effects of weak demand and the carbon tax.
BHP – BHP the mining giant is refusing to hire local workers for its two new central Queensland coal mines, a union claims.
EGP – Echo entertainment says a levy will be imposed on Sydney’s Star casino to help cover the cost of monitoring and regulating its operations.
ILU – Iluka Resources says lower prices for its mineral sands will cause a fall in earnings in 2013.
MQG – MacBank increased their hybrid offer from $4oom to $600m due to its popularity.
MYR – Myer says sales have grown slightly, but the department store remains cautious about the future for the retail industry.
SWM – US private equity firm KKR is to sell its entire 12 percent stake in Seven West Media, worth about $265 million, cutting its ties to Seven after an almost seven-year partnership.
RIO – Rio Tinto says workers at a Newcastle coal terminal will stop work for eight hours on Friday as part of an ongoing industrial dispute at the facility.
ASX – to open lower
US & UK/Europe – US lower, EU flat.
US ADRs – Sharply lower!!…
ANZ +3.3%, NAB -3.3%
BHP +1.2%, RIO -0.2%, NEM -1.1%
By Michael Hevern
D2MX Investment Advisor
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