Posts Tagged ‘oil prices’

Stock Market Analysis: US Markets Lower; ASX to open lower

Tuesday, June 22nd, 2010

U.S. Markets Lower on Chinese currency revaluation; Gold Lower; ASX to Open Lower

U.S. stocks saw selling after early gains could not be sustained.   The key driver was the news that China will be relaxing its Yuan Peg to the US dollar, which was initially seen as a positive,
however the fact there was little detail given about how the revaluation of the Yuan will unfold, sent nervous investors to the sidelines. Our market is likely to trade lower with negative lead from the U.S. Expect to see some profit taking ahead of the month end.

The SPI Futures is above the key level of 4500 the ASX is set to open lower as the SPI closed down 30 points (or 0.7%) at 4,569.   Key levels this week are 4450 and 4650. Expect our market to trade lower today with gold stocks again in focus as the precious metal reaches record highs, Gold stocks see profit taking.

US Markets

In the U.S. the retailers were the biggest drag with the sector down 1.7 per cent over concerns that the yuan revaluation will increase their cost of goods, all 30 stocks in the retailing index fell.  The tech heavy Nasdaq index also retreated with a possible key day reversal overnight. There were some positives with the credit card businesses, Visa and Mastercard jumped 5% as financial regulation changes were not as onerous as first feared.  The Dow down 8 points, or 0.1 per cent, to 10,442, while in the broader market the S&P 500 index lost 4 points, or 0.4 per cent, to 1,113, and the tech-heavy Nasdaq ended 0.9 per cent lower at 2,289.

European Markets

European shares generally rose overnight, with miners in the lead BHP was up 4.7 % and RIO up 5% in London.  In the U.K. the London FTSE 100 index added 48 points, or 0.92 per cent, to 5,299 points. The German DAX gained 76 points, or 1.2 per cent, to 6,292 points, while in France, the CAC 40 rose 50 points, or 1.3 per cent, to 3,736 points.

China has made a move on its currency ahead of this weeks’ G20 meeting, by announcing it will be removing its two year yuan peg to the US dollar, not in a one-off revaluation but the currency will be appreciated in an orderly manner.  This is potentially good news for our miners because a strengthening in Chinese currency will make our resources cheaper.

Asian Markets

The Chinese revaluation news sparked a jump in Asian markets yesterday.  In Japan the Nikkei index of the Tokyo Stock Exchange jumped 2.5% to end at 10,238. The benchmark Hang Seng Index was up 3.1% at 20,912, and China jumped up 2.9% at 2586.

Oil prices finished the week above US$77 a barrel overnight as U.S. The benchmark crude NYMEX for July delivery up US$0.64  to settle at US$77.82 a barrel. Copper prices finished down again but remains around the critical $US3.00 a pound. Copper for July delivery up 5.8 cents to settle at $US2.942 a pound. Gold closed below record levels falling the most in a month, with August gold fell  $US17.60 to settle at $US1,240.70 an ounce.

Key News Drivers Today

G20 – meeting to be held in Toronto this week.

YUAN – China to end its two-year yuan peg to the US dollar. China has signaled a “more flexible yuan” currency policy, which will allow its currency appreciate in an orderly manner against the US dollar.

The yuan has been pegged at 6.83 against the US dollar since mid-2008.  It will not be a one-off revaluation.

US – reacts to Chinese currency revaluation

Markets Overview

U.S. Markets Off Their Highs; Gold Pulls Back

SP500: down 0.4% at 1,113 – Above 200 day Moving Average
DOW down 0.1% at 10,442 – Above 10,000
NASDAQ: down 0.9% at 2,289

Dollar Index: bounce at 85.25 on Higher Euro
A$ higher at 87.96

FTSE: flat at 5,250 – Financials Weigh
DAX down 0.1% at 6,217 – Still in Outperforming�

CHINA: up 2.9% at 2,586 – Currency Allowed to Revalue
HSI  up 3.2% at 20,912

Oil: up 0.5% ($77.82)

Gold: down 1.5% at ($1,240.70)
Commodities Mixed

SPI: Above key Level 4500 ASX
SPI down 0.7% at 4,569

ASX News

The SPI Futures is above the key level of 4500 the ASX is set to open lower as the SPI closed down 30 points (or 0.7%) at 4,569. Key levels this week are 4450 and 4650. Expect our market to trade lower today with gold stocks again in focus as the prescious metals reaches record highs, Gold stocks see profit taking.

AUD – lower at 87.75

AGO – Atlas Iron rose after the company said it had begun mining at its second mine and was on track to quadruple exports by the end of this calendar year.

AMC – faces $466 million law suit in class action seeking damages over the pricing fixing cardboard box cartel.

BHP – S&P Equity Research has downgraded BHP’s target to reflect the RSPT impact, citind estimated lower EPS around 15% due to the RSPT. They went on to say the tax has a 50% chance of being approved.

FMG – Fortescue is poised to sign an agreement with a Chinese engineering group for works to boost iron ore production at its Chichester Hub operations in WA.

GCL – Gloucester Coal independent directors have recommended the miner’s shareholders accept a $1 billion takeover bid by Singapore’s Noble Group Ltd.

MTE – MetroCoal has upgraded the inferred resource at its Bundi thermal coal deposit in the Surat Basin in Queensland by 500 percent.

NAB – NZ’s Commerce Commission has given AMP regulatory approval to acquire the Australasian operations of AXA Asia Pacific Holdings.

ORI – board has approved a $75 million investment to help expand its ammonium nitrate plant in Newcastle.

RIO – BHP Billiton and Rio Tinto have reached an agreement with the WA government for iron ore royalties that brings them in line with other producers.

SDL – Sundance  missing executives has been found dead in aircraft crash.

TLS – again in spotlight as it is to receive $11 billion from the government in exchange for sharing its infrastructure with the NBN and migrating customers to the new fibre network.  This is obviously a huge step in resolving issues between the government and Telstra re the NBN rollout.

Economic Reports out today:

Committee for Economic Development of Australia – two-day conference

AGMs -  Trust Company; Extract Resources; CBio

Market volatility will continue near term, some speculative accumulation is underway.

We the suggest trading strategy is to tighten stops. Be prepared to take profits and open/hold short positions, remember we are trading into the end of the financial year.

Market Summary

ASX – to open lower
US & UK/Europe – US lower, Europe Higher
US ADRs - Mixed!!!…

BHP up 2.3% & RIO up 2.5%; AWC up 3.6%
ANZ up 0.6% & NAB up 1.3%
NEM down 2.9%, JHX down 0.6%, NWS down 1.3%

Commodities Stock Index up 0.2%
Gold Stocks Index down 2.6%
Oil Stocks Index down 0.6%

By Michael Hevern
Head of Research

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Stock Market Analysis: Friday 18th June 2010

Friday, June 18th, 2010

Stock Market Analysis

Gold at Record; U.S. Markets End Flat; BP Faces Off U.S. Congress.

U.S. stocks ended the day flat, but off their lows.  The big news of the day was the BP face-off with Congress in the U.S. though little was resolved there.  Economic data from the U.S. was also weak.  Across in Europe the Spain successfully auctioned off debt to refesh is funds.

The SPI Futures is above the key level of 4500 the ASX is set to open flat as the SPI closed up 8 points (or 0.2%) at 4,540.   Key levels today are 4500 and 4650. Expect our market to trade flat.  Gold stocks will be in focus as the prescious metals reaches record highs.

In the U.S. the index of leading indicators, a key gauge of the outlook for growth over the next three to six months, rose 0.4 per cent in May, while other data showed the cost of living dropped and the claims for jobless benefits unexpected increased to the highest level in a month.  The data is confirming that even though the U.S. economy will keep expanding the second half of 2010, it will be with benign inflation and little job growth.

The Dow rose 24 points, or 0.2 per cent, to 10,434, while in the broader market the S&P 500 index gained 1 points, or 0.1 per cent, to 1,116, and the tech-heavy Nasdaq ended flat at 2,307.

European Markets

European markets ended the day higher following a successful bond auction by Spain to help fund its debt.  Yesterday Spain agreed to allow Spanish banks to undergo “Stress Testing”, the results of which will be reported in the next couple of weeks. Greece was also assessed to be on track with its reforms required as part of its rescue package to save it from bankruptcy, according to a delegation of the IMF, the ECB and EU.  This saw the euro above $US1.2380.

BP Gulf Oil Spill

BP was again in focus with the CEO Tony Hayward being grilled by Congress in the U.S., this saw price of its shares see some relief rising 6.7%.  BP have ageed suspend their dividend and to put $US20 billion into a fund for the victims of the Gulf Oil Spill.  There are incredible amounts of money involved here with the total cost of the spill estimated to be as much as $US100 billion over the next 10 years, and ever more increbile is that BP would likely survive in that scenario, highlighting what a profitable business they have.

In the U.K. the London FTSE 100 index added 16 points, or 0.3 per cent, to 5,254 points. The German DAX gained 32 points, or 0.5 per cent, to 6,223 points, while in France, the CAC 40 rose 7 points, or 0.2 per cent, to 3,683 points.

Asian Markets

The IMF has confirmed that Asia’s regional economy is growing so fast that it will rival long-standing economic powers of the U.S. and Europe in the next five years. They went on to say Asia is set to expand 50 per cent in the next five years.  In Asia the Nikkei index of the Tokyo Stock Exchange eased 0.7% to end at 9,999.   The benchmark Hang Seng Index was up 0.4% at 20,138, and China reopened down 0.4% at 2560.

Commodities

Oil prices dropped below US$77 a barrel overnight as U.S.  The benchmark crude NYMEX for July delivery fell US$0.88 to settle at US$76.79 a barrel.  Copper prices finished a six day gain but remain around the critical $US3.00 a pound. Copper for July delivery fell 9 cents to settle at $US2.924 a pound. Gold closed at a record on concerns about the pace of the U.S. recovery, with August gold jumped  $US18.20 to settle at $US1,245.60 an ounce.

Markets Overview

Gold at Record; U.S. Markets End Flat; BP Faces Off U.S. Congress;

SP500: flat at 1,116 – Above 200 day Moving Average
DOW up 0.2% at 10,434 – Above 10,000
NASDAQ: flat at 2,307

Dollar Index: lower at 85.67 on Higher Euro
A$ higher at 86.72 

FTSE: up 0.3% at 5,254 – Financials Weigh
DAX up 0.5% at 6,223 – Still in Outperforming

CHINA: down 0.4% at 2,560
HSI  up 0.4% at 20,138

Oil: down 1.3% ($76.61)
BP Faces Off Congress

Gold: up 1.5% at ($1,247.20)
Commodities Mixed

SPI: Above key Level 4500 ASX
SPI up 0.2% at 4,540

ASX News Today

The SPI Futures is above the key level of 4500 the ASX is set to open flat as the SPI closed up 8 points (or 0.2%) at 4,540.   Key levels today are 4500 and 4650. Expect our market to trade flat.  Gold stocks will be in focus as the prescious metals reaches record highs.

AUD – higher at 86.61.

ANZ – says it may still bid for Korea Exchange Bank

AMU – Amadeus Energy has revealed it’s the target of takeover moves by U.S. companies. 

GFF – Goodman Fielder says it has raised $350 million worth of unsecured notes in the U.S. to help repay bank debt.

JHX – has been downgraded by 10% by Deutsche Bank after cutting earnings estimates on  back of higher costs and softer demand, saying “we think a recovery is more likely in FY12, not FY11″. Target is now a Hold at $7.44 (from $8.23)

LEI – Leightons has secured $1.5 billion worth of contracts in Australia and Indonesia over the next 10 years.

NMS – the engineering services company has appointed four new senior executives as it returns to growth.

PPT – the listed fund manager has reported a fall in funds under management.

TRF - Trafford Resources plans to sell $3.75 million in new shares to fast track a South Australian iron ore project.

UGL – The engineering company has secured $280 million of new works and project extensions.

Economic Reports out today:  Melbourne Institute to report on its bulletin of economic trends

Market Summary

Market volatility will continue near term, some speculative accumulation is underway.
We the suggest trading strategy is to tighten stops. Be prepared to take profits, remember we are trading into the end of the financial year.  Gold stocks will be in focus as the prescious metals reaches record highs.

ASX – to open flat
US & UK/Europe – flat
US ADRs – Generally Negative!

BHP down 0.7% & RIO down 0.8%; AWC down 1.4%
ANZ down 1.1% & NAB down 1.0%
NEM up 2.3%, JHX down 0.8%, NWS down 0.1%

Commodities Stock Index down 0.1%
Gold Stocks Index up 2.1%
Oil Stocks Index down 0.2%

By Michael Hevern
Head of Research

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Stock Market Analysis: Thursday 17th June 2010

Thursday, June 17th, 2010

Stock Market Analysis

Markets flat as Europe’s Spanish banks undergo “Stress Tests”

US stocks ended the day flat. The big news of the day was that BP have agreed to put $US20 billion into a fund for the victims of the Gulf Oil Spill. Across in Europe the Spanish banks have agreed to “Stress Testing”.

The SPI Futures is above the key level of 4500 the ASX is set to open flat as the SPI closed up 6 points (or 0.1%) at 4,566. Key levels today are 4500 and 4650. Expect our market to trade flat. The government remains steadfast on the 40% RSPT tax.

The Dow rose 4 points, or 0.1 per cent, to 10,409,  while in the broader market the S&P 500 index lost 0.6 points, or 0.06 per cent, to 1,114, and the tech-heavy Nasdaq ended flat at 2,306. Better than expected May data for the output at factories, mines and utilities rising 1.2 per cent (vs 0.7 per cent in April) offset a 10 percent fall in Housing starts last month. The industrial production data did provide further confirmation that the manufacturing sector continues to recover, in the U.S. BP was again in focus agreeing to set up a $US20 billion fund and at the same time suspending its $US10 billion dividend.

European markets ended the day higher following an agreement by Spanish banks to undergo “Stress Testing”, the results of which will be reported in the next couple of weeks. The Stress testing of the US Banks marked the turnaround in the recent GFC, and governments are looking for this to mark a “line in the sand” for European banks. There is a concern though that the results will be delivered over a number of days, which will cause speculation on those banks that have not reported their “Stress Test” results, but it is definitely a step in the right direction.  This saw the euro above $US1.23.

In the U.K. new financial service regulation is being implemented as a result of the now largely nationalised banking system as a result of the GFC. The Bank of England (BoE) is now the new regulator. In the U.K. the London FTSE 100 index added 20 points, or 0.4 per cent, to 5,237 points. The German DAX gained 15 points, or 0.3 per cent, to 6,190 points, while in France, the CAC 40 rose 14 points, or 0.1 per cent, to 3,676 points.

IMF has confirmed that Asia’s regional economy is growing so fast that it will rival long-standing economic powers of the U.S. and Europe in the next five years, they went on to say Asia is set to expand 50 per cent in the next five years. In Asia the Nikkei index of the Tokyo Stock Exchange gained 2% to end at 10,067. The benchmark Hang Seng Index was flat at 20,062, and China was closed again for a public holiday.

Oil prices rose above US$77 a barrel overnight as U.S. gasoline inventories fall and on a stronger euro bolstered investor confidence. Benchmark crude NYMEX for July delivery rose US$0.73  to settle at US$77.67 a barrel. Copper prices finished a six day gain but remains around the critical $US3.00 a pound. Copper for July delivery fell 9 cents to settle at $US2.9955 a pound. Gold fell with August gold down $US3.90 to settle at $US1,230.50 an ounce.

Markets Overview

US Markets End Flat; Spanish Banks to be “Stress Tested”

SP500: flat at 1,115 – Above 200 day Moving Average
DOW up 0.1% at 10,409 – Above 10,000
NASDAQ: flat at 2,306

Dollar Index: lower at 86.17 on Higher Euro
A$ lower at 86.31

FTSE: up 0.4% at 5,238 – Financials Weigh
DAX up 0.8% – Still in Outperforming

CHINA: was closed
HSI  flat at 20,06

Oil: up 0.5% ($77.76)
BP $US20 billion Fund

Gold: down 0.2% at ($1,231)
Commodities Lower

SPI: Above key Level 4500 ASX
SPI up 0.1% at 4,566

ASX News Today

The SPI Futures is above the key level of 4500 the ASX is set to open flat as the SPI closed up 6 points (or 0.1%) at 4,566.   Key levels today are 4500 and 4650. Expect our market to trade flat. The government remains steadfast on the 40% RSPT tax.

AUD – lower at 86.31.

AMC – Amcor has bought a US plastic packaging business for $326 million as the company targets health care and food related industries for growth.  UBS has downgraded Amcor to Neutral from Buy, target $6.75, saying “AMC faces considerable macroeconomic headwinds in Europe which, despite being defensive now, represents 40% of earnings”.

BHP – BHP Billiton Ltd, Rio Tinto Ltd and Xstrata all say the federal government is yet to indicate whether their key concerns with a proposed new tax will be reviewed.

CEY – Thai-based Banpu increased its stake to just below the takeover threshold, in the miner to become its largest shareholder.

CPL – Coalspur Mines announced a deal to acquire new coal leases next to its Hinton project in Canada.

GPG- Guinness Peat Group is planning a restructure throuth a demerger of GPG Australia from the parent group.

NWS- British Sky Broadcasting has rebuffed a buyout offer from News Corp, that values the company at $20.6 billion, but
is open to a sweetened bid.

POS- the nickel explorer said it had identified seven new targets at its Windarra project in WA.

QBE- says FY10 has been tough with tight insurance margins and higher than usual larg losses.

RIO- plans to invest $US550 million developing its Kennecott Eagle nickel and copper mine in the U.S., after it received environmental approvals for the project.  The S&P’s Ratings Services lifted its outlook on Rio to positive now BBB+), saying metals and minerals prices have rebounded
after a severe downturn in 2008, and noting the company had reduced its debt.

Economic Reports out today:

ANZ – CEO of Asia is to speak in Melbourne.
ACC – Australia Chamber of Commerce to release data for industrial trends.
Melbourne Institute to  report on June Household Savings and Investment

Market volatility will continue near term, some speculative accumulation is underway.
We the suggest trading strategy is to tighten stops. Be prepared to take profits as we are trading into the end of the financial year.

Market Summary

ASX – to open flat
US & UK/Europe – flat

US ADRs – Broadly Negative!!!…

BHP down 0.5% & RIO down 0.7%; AWC down 0.9%
ANZ flat & NAB up 2.2%
NEM up  3.6%, JHX down 2.1%, NWS down 2.4%

Commodities Stock Index down 0.3%
Gold Stocks Index up 1.2%
Oil Stocks Index down 0.2%

By Michael Hevern
Head of MDS Financial Research

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Wednesday, 16th June 2010 Stock Market Analysis

Wednesday, June 16th, 2010

Stock Market Analysis

Markets rise sharply after Europe’s successful debt auction and positive reports from the US.

US stocks rose on the back of higher oil prices, good news for the industrials and reduced concerns over the European debt issues after a successful auction overnight.

The SPI Futures is above the key level of 4500 the ASX is set to open sharply higher as the SPI closed up 68 points (or 1.5%) at 4,590.   Key levels today are 4500 and 4650. Expect our market to trade sharply higher.

The Dow  rose 213 points, or 2.1 per cent, to 10,404,  while in the broader market the S&P 500 index gained 25 points, or 2.4 per cent, to 1,115, and the tech-heavy Nasdaq ended 2.8% per cent higher at 2,306. Some highlights included: The energy sector appears to be divorcing its self from the BP meltdown as value investors look to step in.  President Obama will be addressing the people tonight re BP and deep sea drilling.  Data showed that US regional manufacturing rose for an eleventh consecutive month, according the the Fed; the report showed that orders and sales accelerated, while employment climbed at a slower pace.  Technology stocks rose after Intertnational Data Corp said it expects the PC market to grow 20 per cent this year.  Boeing also sparked the industrials saying that they will be boosting production and forecast an increased demand for computers.  Boeing was up 4%.

European markets ended the day higher following a success debt auction, easing the fears of another credit crisis in Europe.  Investors ignored the Moody’s downgrade of Greek Debt to Junk status, saying its was already factored in. News Corp’s $13.4billion bid for its remaining 61% of B-skyB sparked interest in the pay-TV space in Germany, with pay TV channel Sky Deutschland up 18% (News Corp already owns 45% of the company). This saw the euro above $US1.235.  In the U.K. the London FTSE 100 index added 15 points, or 0.3 per cent, to 5,218 points, however BP continued to fall and is now saying the oil spill is running at 60,000 bpd (vs previous estimates of 35,000bpd).  The German DAX gained 50 points, or 0.8 per cent, to 6,175 points, while in France, the CAC 40 rose 36 points, or 1.0 per cent, to 3,661 points.

In Asia the Nikkei index of the Tokyo Stock Exchange gained 9 points to end at 9,888.   The benchmark Hang Seng Index rose 0.1 per cent, to 20,062, and China was closed for a public holiday.

Oil prices rose above US$77 a barrel overnight as rallying stock markets and a stronger euro bolstered investor confidence.  Benchmark crude NYMEX for July delivery rose US$2.00 to settle at US$77.10 a barrel.  Copper prices rallied for a sixth day toward the critical $US3.00 a pound,  after a new report showed Europe’s economy might not be hurting from mounting deficits as much as previously foreshadowed. Copper for July delivery rose 16.7 cents to settle at $US3.005 a pound. Gold recovered on the lower US Dollar. August gold rose $US11 to settle at $US1,235.50 an ounce.

Markets Overview Summary

US Markets Higher Led by Energy and Industrials

SP500: up 2.4 at 1,115 – Above 200 day Moving Average
DOW up 2.1% at 10,192 – Above 10,000
NASDAQ: up 2.8% at 2,306

Dollar Index: lower at 86.06 on Higher Euro
A$ higher at 86.44

FTSE: up 0.3% at 5,218 – Energy Leads
DAX up 0.8% – Still in Outperforming

CHINA: was closed
HSI up 0.1% at 20,063

Oil: up 2.9% ($77.10)
Energy Sector Rallies (ex BP)

Gold: up 1.1% at ($1,235.5)
Commodities Higher

SPI: Above key Level 4500 ASX
SPI up 1.5% at 4,590

ASX News Today

The SPI Futures is above the key level of 4500 the ASX is set to open sharply higher as the SPI closed up 68 points (or 1.5%) at 4,590.  Key levels today are 4500 and 4650. Expect our market to trade sharply higher.

AUD – higher at 86.44.

AIO – Asciano has secured a new contract with its largest customer in Queensland to haul coal worth $775 million in revenue over 10 years

CQT – Conqest Mining rejects t/o offer saying it does not reflect its true value.

FGL – UBS says a joint bid could be in the offing for Foster’s Beer citing interest from SABMiller, Coca-Cola Amatil (CCL.AX), Molson Coors, Asahi and Diageo. Molson Coors holds 5% economic interest in Foster’s and UBS says others may follow. But UBS retains its neutral rating and A$5.57 target based on sum-of-parts.

NWS - bids $13.4billion for the 61% stake it does not already own, of British pay-television company B-SkyB

RIO – has still held talks with the government re the super profits tax (RSPT).

WES – says the RSPT could impact dtheir dividend payouts.

Economic Reports out today:

ABS – to release dwelling units comencements data for March
WESTPAC – to release Index of Economic Activity Data
AGMs – Cazalay Resources and Gindalbie Metals.

Market volatility will continue near term, some speculative accumulation is underway. We the suggest trading strategy is to tighten stops. Trade to long side, looking for value, but remember we are trading into the end of the financial year.

Market Summary

ASX – to open sharply higher
US & UK/Europe – Positive Leads

US ADRs – Broadly Higher!!!…

BHP up 3.0% & RIO up 4.1%; AWC up 3.1%
ANZ up 2.1% & NAB up 2.2%
NEM up 2.5%, JHX up 3.6%, NWS up 6.8%

Commodities Stock Indexup 2.8%
Gold Stocks Index up 2.7%
Oil Stocks Index up 2.9%

By Michael Hevern
Head of Trader Dealer Research

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Tuesday, 8 June 2010 Morning Wrap

Tuesday, June 8th, 2010

Morning Market Wrap

Overseas markets continue to slide on economic growth concerns.

US markets continued to slide on concerns over indications that the local and international economic growth is falling short of forecasts, in particular the disappointing employment figures and the lingering presence that Europe’s economic problems will derail a global recovery. Commodities prices were under pressure due to concerns that Europe’s economic recovery will stall resulting in China cutting its imports, plus a strengthening US dollar.

The SPI Futures is below the key level of 4500 the ASX is set to open sharply lower as the SPI closed down 39 points (or 0.9%) at 4,299. Key levels today are 4200 and 4400. Expect our market to continue to trade lower, on global growth concerns and European debt worries continue to weigh overseas.

The Dow Jones fell 115 points, or 1.2 per cent, to its lowest close since November 2009. The Dow lost 323 points on Friday after the government’s May jobs report fell short of expectations.  And in the broader indexes the S&P 500 1.4 per cent, at 1050 and the technology based Nasdaq Composite Index fell 2 per cent at 2138.  The S&P500 Financials index lost over 2%, while miners also dragged on the markets as a result a falling commodities prices.

Weak US employment data for May and comments from a Hungarian official saying the country could be hit by a Greece-like fiscal crisis have undermined confidence in global economic growth and oil demand.  The new British government will be delivering an emergency budget, saying that the nation’s financial situation is worse than they were led to believe.  The Euro fell below $US1.19 overnight the lowest since march 2006.

U.K. stocks fell, with the FTSE 100 Index falling 1.1 percent, to 5,069 , and in Europe the German DAX was down 0.6% and the French CAC was down 1.1%.

Chinese stocks remained at a 13-month low, on concern bank fundraising and government efforts to cool the property market will hurt shareholder stakes and dent demand for resources. The Shanghai Composite Index down 1.6% to close at 2,511 and in Hong Kong the  market was down 2.0%.

Oil prices closed lower overnight on worries the debt crisis in Europe could spread and clip the recovery in global fuels demand.  On NYMEX July crude oil fell 0.6% to settle at $US71.04.  BP have stemmed the flow of the oil spill in the Gulf of Mexico.  COMEX August gold rose $US23.10 to settle at $US1240.80 a fine ounce, while the July silver settled up 86.3 US cents at $US18.162 an ounce.

Fears that China could cut back on metals imports saw copper prices fall sharply to their lowest level in October 2009, as investors foreshadow a drop in demand for the metal.   Copper for July delivery fell 5.35 to settle at $2.766 a pound. Early in the day, copper fell as low as $2.72 a pound, its lowest level since October.

Markets Overview

Overseas Markets Continue to Sell-off!

SP500: down 1.4% at 1,050 – Below “Flash Crash” Lows
DOW down 1.2% at 9,816 – Below 10,000
NASDAQ: down 2.0% at 2,174

Dollar Index: higher at 88.49 on Lower Euro
A$ lower at 81.02 (above 10-month Lows)

FTSE: down 1.1% at 5,126
DAX down 0.6% – Still in Uptrend

CHINA: down 1.6% at 2,511 – 13-month Lows as Suport becomes Resistance
HSI down 2.0%

Oil: down 0.6% ($71.04)
BP Makes Progress on Oil spill in Gulf of Mexico

Gold: up 0.2% at ($1,241)
Commodities Mixed

SPI: Above Key 4500 ASX
SPI down 0.9% at 4,299

ASX News

The SPI Futures is below the key level of 4500 the ASX is set to open sharply lower as the SPI closed down 39 points (or 0.9%) at 4,299. Key levels today are 4200 and 4400.  Expect our market to continue to trade lower, on global growth concerns and European debt worries continue to weigh overseas.

AUD – weakens to 81.02, just above 10 months lows.

BXB – says it is to lose the business of ConAgra, a food company in the United States.

CEU – says traffic and revenue on its EastLink tollway in Melbourne grew in May.

NAB – A subsidiary in the U.S. has acquired US loan and deposit assets for a cash payment of $US76 million ($A90.31 million).

NDO – is in a trading halt pending the release of drilling result for its Tindalo-1 well.

Wheat – Planting in Western Australia was 60 percent to 70 percent completed while New South Wales was 70 percent to 90 percent sown, WA needs followup rains though. Commonwealth Bank of Australia this week reiterated a forecast for a 5 percent year-on-year drop in the national wheat area, resulting in a crop of 20 million to 21 million tons.

Market volatility will continue near term, Non-farm payrolls figures disappointment and European debt concerns, setting a negative tone for this week.

We the suggest trading strategy is to tighten stops. Be prepared to open/hold short positions.

Market Summary

ASX – to continue lower
US & UK/Europe – negative leads

US ADRs – Broadly Lower!!!…

BHP down 2.1% & RIO down 1.4%; AWC down 2.6%
ANZ down 1.7% & NAB down 1.7%
NEM up 2.7%, JHX down 3.6%, NWS down 2.1%

Commodities Stock Index down 0.9%
Gold Stocks Index up 2.3%
Oil Stocks Index down 0.6%

By Michael Hevern
Head of Research

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Thursday 12th February 2009 MDS Morning Wrap

Thursday, February 12th, 2009

Presented by Michael Hevern
MDS Financial

Click here to watch the presentation.

or

Click here to download the mp3 audio recording (897Kb).

*********************************************

In this morning’s wrap…

World Indices
DOW up 0.6%

  • banks grilled by Congress

NASDAQ up 0.4%

  • Lack of detail in stimulus package
  • Apple down, Microsoft and Cisco up

US Stimulus plan

  • funding to buy toxic debts
  • additional capital for banks
  • $US50bn to prevent foreclosures
  • Strings attached to monies: salary caps, dividend restrictions & acquisition constraints

FTSE up 0.5%

  • RIO up 3.5%, on Chinalco deal.

CAC up 0.2%

DAX up 0.5%

Commodities
Oil down 4%

  • US inventories confirming supplies are increasing, falling global demand

Gold up 2.5% ($940)

  • weaker US dollar

Silver, lead and zinc up; copper and nickel down; aluminium flat

Commodities stocks index flat
Gold stocks index up 8.2%

  • US Dollar falling

Oil stocks index down 0.4%

Local market
SPI up 13 points

  • Rio Tinto, Leighton and Coca Cola to report

ASX News
CBA: profits down by 16%; bad debts soar
CPU: 1H profits down, free cash flow up 26%
Miners likely to recover today
Energy to weigh
Banks will hold ground
Look to gold for support
ASX likely to open higher

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Wednesday 11th February 2009 MDS Morning Wrap

Wednesday, February 11th, 2009

Presented by Michael Hevern
MDS Financial

Click here to watch the presentation.

or

Click here to download the mp3 audio recording (850Kb).

************************************************

In this morning’s wrap…

World Indices
DOW down 4.6%

  • US Senate passed the $US838bn stimulus package, but not enough detail for the market
  • bouncing below 50-day moving average

S&P 500 down 4.9%

NASDAQ down 4.2%

  • US Treasury s Bank Stabilisation Plan passed
  • Apple, Microsoft and Cisco down

FTSE down 2.2%

  • lower commodity prices affecting energy and material stocks

CAC and DAX down 3.5%

NIKKEI down 0.3%

  • expect a selloff today
  • concerns about strength of the Yen

Commodities
Oil down 4%

  • below $40 level ($38)
  • continuing oversupply and falling demand

Gold up 2.7% ($917)

  • continuing an upward rising channel since mid-October

Silver up 2.2%
Aluminium, lead, copper, nickel, and zinc all down.

Commodities stocks index down 5%
Gold stocks index down 2.3%
Oil stocks index down 5%

Local Index
SPI down 80 points

  • expect a selloff this morning

ADRs
RIO down 4.5%
BHP down 9%
Alcoa down 10%
Alumina down 6%
ANZ down 7%
NAB down 8.5%

  • our market likely to open sharply lower today

ASX News
JB Hi-Fi: positive results for 1H09
Cochlear: 1H09 profit growth fastest in 3 years
AWB: forecast 1H09 profit down 55%
SUN & IAG: bushfire and flooding bill escalates
Miners and Energy to retrace
Banks to weigh
Look to gold for support

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