* US stock markets eased back from new record highs, as traders chose caution ahead of the next FOMC meeting will be held on 17-18 December and the ongoing federal budget negotiations.
* European stock markets snapped a two session winning streak, as the regional index is down -3.2% for the month so far.
* Asian stock markets ended lower snapping its biggest rally in three weeks, as the Aussie market continues its slide.
* Commodities prices higher, Gold prices are now trading around $US1,262, while crude-oil traded around $US98.
The ASX market is looking to open lower today, with the 5100 level key near-term, as markets were eased across Europe and the US markets ended modestly lower, after the comments about the likelihood of the Fed taper.
Australian shares ended in the red again yesterday, as the falls were led by yest another sharp sell-off in QBE, while Crown, CBA and Westpac provided some support to the ASX200 for the session. The Bureau of Statistics has reported First home buyer loan approvals fell to a new record low in Victoria while rising slightly in NSW in October, with the overall value of home loans lifting by 4.1 per cent in October, driven by a strong rise in investor activity, with the value of loans for investors jumping 8.2 percent for the month to reach $10.3 billion – the highest level on record.
According to Goldman Sachs the odds are in the bulls favour for the market setting up for a Christmas rally, with an over 80% chance of an over 3% rally starting in the next few trading sessions. This will need traders to come to terms with the prospect of the US Federal Reserve changing its stimulus policy into the new year, which they have appear to have done in US market.
The SPI 200 futures were down -0.7% at 5,111, giving another negative lead for the ASX market today. The Australian dollar rebounded from a around three month lows at US91.6c. Traders will look to the Westpac Consumer Confidence report due out today.
US stock markets eased back from new record highs, as traders chose caution ahead of the next FOMC meeting will be held on 17-18 December and the ongoing federal budget negotiations.
The three benchmark indexes edged lower back from new record highs, as traders continued to digested the the prospects of a Fed taper. Volatility continued lower -2.7% backing off six week highs. The S&P500 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 in the red, with the falls dominated by the Consumer Discretionary sector down -0.9%, Healthcare down -0.5%, followed by the Financials, Energy, Tech and Industrials sectors all down over -0.3%, while the Materials sector rose 0.3%.
In economic news the five US agencies approved the Volcker rule, which bans proprietary trading and aims to reduce the chances that banks will endanger federally insured depositor monies, but regulators did concede to bank lobbying, granting a broader exemption for banks’ market making desks.
Traders took profits after St Louis Fed President James Bullard said that the odds of tapering had risen given the better than expected monthly jobs report. Bloomberg says a third of the 35 economists surveyed now expect the Fed to begin to tape in the December meeting.
For the session Dow Jones closed down -0.3% at 15,973, the S&P500 closed down -0.3% at 1,802, and the NASDAQ closed down -.02% at 4,060, while on 10-year Treasury notes eased again to 2.80%.
European stock markets snapped a two session winning streak.
The Europe Stoxx 600 fell -0.7% and is down -3.2% for the month so far. Across the region eight of the ten sectors ended in the red, with gains in the Financials up 0.2%, but falls were dominated by the Automakers, Miners and Tech sectors were down over -0.7%, followed by the Consumer cyclicals and the Telecom sectors down -0.4. The index is still up around 12% for the year and is still on track for its best annual gain since 2009.
The German market ended their longest rally in a month, but the index is still down -2% this month, but is up around 20% for the year and valuations are at their highest levels since 2009. The London market fell back to six week lows, as the miners sold down on the Chinese production figures, while UK industrial production rose 0.4 percent to expand for a second month. The index is down nearly -4% from its October peak.
For the session the German DAX 30 closed down -0.9% at 9,114, the UK the FTSE 100 closed down -0.6% at 6,523, the French CAC 40 closed down -1.0% at 4,091, while the Spain market closed down -0.5% 9,438.
Asian stock markets ended lower snapping its biggest rally in three weeks, as the Aussie market continues its slide.
The MSCI Pacific Index eased -0.1%, backing off the prior -0.8% gain. The index is still up 8.6% 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 lower, after the Chinese factory output rose by 10% (down from 10.3% in the prior month) and just shy of forecasts. Recent CPI figures have show 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 Hong Kong market edged lower, holding below the 24,000 level, but the index is still up 29% from its June lows. The Japanese market eased, but has been strong and outperforming the region for 2013.
For the session the Chinese Shanghai Composite closed down -0.1% at 2,237, the Hong Kong Hang Seng closed down -0.3% at 23,744, and the Japanese Nikkei closed down -0.3% at 15,611, while the South Korean KOSPI closed down -0.4% at 1,993.
The Dollar Index was lower 79.95 on a higher Euro, and the Aussie Dollar closed higher at US91.6c. Commodities prices were higher.
Overnight the COMEX WTI Crude for DEC13 delivery closed up 1.2% at $US98.48, the COMEX Copper for DEC13 delivery closed up 0.2% at 3.265, the COMEX Gold for DEC13 delivery closed up 2.3% at $US1,262.70.
ASX News Today
BBG – Billabong the troubled surfwear maker says shareholders have suffered from its drawn out negotiations for a refinancing deal with two US investment firms.
DXS – Dexus Property Group has upgraded its earnings guidance as a result of a buyback of securities and the net impact of Dexus’s investment in the Commonwealth Property Office Fund (CPA).
EGP – Echo Entertainment the casino owner, will incur a one-off charge of $22 million from changes made to its debt arrangements.
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.
QHL – Quickstep the Australian firm, has signed a $75 million agreement with US aerospace giant Lockheed Martin to supply wing flaps for C-130J Hercules transport aircraft.
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 boss Alan Joyce insists the airline is not looking for a government bailout, unlike Australian car makers.
SVW – Seven Group Holdings subsidiary WesTrac China will pay $US130 million ($A143 million) to acquire Caterpillar Global Mining’s distribution and support business in north-east China.
WPL – Woodside Petroleum have risen after it halved its spending forecasts and narrowed its production targets.
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 lower
US & UK/Europe – lower
US ADRs – Broadly Mixed!!…
ANZ +0.5%, NAB +2.4%, NWS +0.9%
AWC -1.1%, BHP -0.8%, RIO -1.1%, NEM +2.5%
By Michael Hevern
D2MX Investment Advisor
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