Posts Tagged ‘overseas markets’

Stock Market Analysis: Weekly Market Wrap

Friday, July 30th, 2010admin

Weekly Market Wrap – Stress Relieved

Overseas markets generally traded higher this week after the successful completion of the ECB Bank “stress tests”. Banks benefited, trading higher this week. Markets are generally trading above their 200 day moving average, with the exception of China and Japan, and Copper has again been a highlight, rising to a 10-week high.

US Markets

The positive sentiment resulting from the earnings season has been tempered this week, as economic data in the U.S. pointed towards a slowing economy. Consumer confidence has slumped and durable goods orders dropped last month, raising concerns that the economic rebound is slowing as the government unwinds stimulus programs. This may be confirmed if the U.S. gross domestic product data, due out tonight, shows growth has slowed (the forecast is for a GDP of 2.6 percent in the second quarter). Overnight the Dow closed down -0.3% at 10,467, while in the broader market the S&P 500 index was down -0.4% at 1,102 and the tech-heavy Nasdaq ended down -0.6% at 2,252.

European Markets

European stocks advanced this week on the back of the successful completion of the ECB Bank “stress tests”. The results showed only 7 out of 91 banks failed the test which was fewer than expected, but analysts questioned whether the tests were tough enough, as they only showed $US3.5 billion needed to be raised to prop up capital adequacy (previous estimates had ranged from $75 to $85 billion). The UK economic data was also positive showing the economy grew at the fastest pace in four years in the second quarter as rebounding services, manufacturing and construction, supported more bullish sentiment. The Swiss banking giant UBS, upgraded its weighting on European equities to neutral from underweight. There appears to be a rotation to more positive sentiment in Europe as shown by the Euro being up above $US1.31, its highest since May. Overnight in London the FTSE 100 index closed down marginally, -0.1% at 5,314, the German DAX was down 0.7% at 6,135, while in France the CAC was down -0.5% at 3652.

Asian Markets

Asian markets had a solid week. Chinese equities continued to rise as the Central Bank said China’s economic fundamentals are “good”. The Chinese index is up 11 percent from its yearly lows, as the jump in industrial profits and the prospects for increased spending and tourism boosted the domestic economic outlook. Japan is also in focus this week with the reporting season starting off well, sending the index to its biggest gains in 3 weeks. The Yen reached its lowest level against the Euro since May. This helped exporters rise, and overnight in China the SSE Composite closed up 0.6% at 2,648, while in Hong Kong the Hang Seng Index was flat at 21,094 and in Japan the Nikkei 225 Index was down -0.6% at 9,696.

Commodities

Copper continued to shine this week, rising to an 11-week high on signs that growth is sufficient in China and the U.S. to spur demand. Copper prices rose to new monthly highs, above the key $US3.00 a pound, up 1.4% (or 4.4 cents) at $US3.2850 a pound. Oil prices held up this week with the benchmark crude NYMEX for September delivery rising 1.7% (or $US1.37) to settle at $US78.36 a barrel. Gold broke below key support. Overnight August gold was up $US8.80 at $US1,171.20 an ounce.

ASX News

The election dominated the news this week, but there were few surprises. Overseas market movements have dictated Aussie investor sentiment. Improvements in China have seen commodities prices continue to rise, while in Europe sentiment in improving.

Our View

Markets have again drifted higher as trading volumes continued to pick up this week. There does not appear to be a catalyst that will push markets through current key levels. China and Japan have been positive for Asian markets. The U.S. economic data is disappointing while Europe appears to be improving.

Overseas markets are keenly anticipating the U.S. GDP report and the European unemployment and consumer price index due out tonight. China also report their PMI data on Sunday.  The outcome of these reports will set the tone for next week.

The S&P ASX200 is currently trading around 4485. The key support level on the ASX is still around 4,200 and the key levels for our index next week are 4600 and 4350, with pivot at 4450.  The pending elections will have a dampener on the markets near term.

By Michael Hevern
Head of Research

Stock Market Analysis: US GDP Report Gives Pause; ASX to Trade Lower

Friday, July 30th, 2010Michael

Stock Market Analysis

US GDP Report Gives Pause; ASX to Trade Lower

U.S. stocks finished lower overnight for a second day, as disappointing revenue from utilities and consumer companies weighed. European markets continued lower.  Asian markets bucked the trend to the positive.  A weaker US dollar also helped commodity prices, however our markets will likely see further profit-taking today.

The SPI Futures is above the key level of 4400 the ASX is set to open lower as the SPI Futures closed down -0.5% (or -21 pts) at 4,473.   Key levels today are 4500 and 4400, with pivot around 4450. Mining and Energy stocks may offer support with improving commodities prices overnight.  M&A activity continues to drive specific stocks.

US Markets

The S&P 500 remains only just above the key 1100 level. The Dow clawed back from an initial 100 point selloff.  U.S. stocks still finished lower overnight for a second day, as disappointing revenue from utilities and consumer companies overshadowed some other strong earnings reports.  The market sentiment was under pressure after disappointing second-quarter revenue and guidance reports hit the utilities, consumer staples and technology sectors. Companies like Akamai Technologies, Nvidia, Symantec, and Colgate disappointed either on their profit margins, earnings or earnings forecasts.  However the market is on track to close out the best month since July 2009, with the Dow currently up 7 percent for the month.  Oil prices rose overnight on better-than-expected earnings from Exxon Mobil Corp and Southwest Airlines. The Dow closed down -0.3% (or -31 points) at 10,467, while in the broader market the S&P 500 index down -0.4% (or -5 points) at 1,102 and the tech-heavy Nasdaq ended down -0.6% (or -13 points) at 2,252.  The sectors weighing most on the indices were utilities and consumer staples sectors, while financials and materials sectors provided some support.  The key news out tonight is the U.S.gross domestic product data release.

European Markets

European stocks traded lower, despite a raft of impressive earnings, particularly in the autos and telecommunications sectors. Better-than-expected confidence data helped, with the euro-zone economic sentiment indicator rose to 101.3 from 99, its highest level since March  2008. The Euro traded above $US1.31 for the first time since May, confirming the improving investor sentiment after the successful Bank “stress tests” report.  The European markets have also benefited of late from the successful government debt auctions in countries like Spain and Portugal, where much of the sovereign debt concerns were focused.  Mitsubishi and Volkswagen AG turned in solid second-quarter performances, crediting healthy sales in China, and Nissan saw its quarterly sales jump 35.3 percent.  Telecoms helped the markets with France Telecom rising 5.5%, after it reported a drop in second-quarter earnings and revenue but said trends are improving across markets, and Spanish telecoms company Telefonica gaining 3.2%, after its second-quarter net profit rose 16% as revenue growth in its Latin American business compensated for a weaker domestic market.

In London the FTSE 100 index closed down marginally -0.1% (or -6 points) at 5,314, the German DAX down -0.7% (or -44 points) at 6,135, while in France the CAC was down -0.5% (or 18 points) at 3652.

Asian Markets

Asian markets were mixed.  In China the Shanghai Composite Index of equities continued to rise, as the central bank said China’s economic fundamentals are “good”.  Industrial metals prices continued to rise on the prospect of improving demand.  Japanese stocks fell for the first time in five days, weighed down by Panasonic down 7.7 percent after reporting is will raise capital for acquisition of Sanyo, however shipping lines rose as they raised their full-year profit forecasts.  In China the SSE Composite closed up 0.6% (or 14 points) at 2,648, while in Hong Kong the Hang Seng Index was flat (down 3 points) at 21,094 and in Japan the Nikkei 225 Index was down -0.6% (or -57 points) at 9,696.

Commodities

The Dollar Index down -0.6% at 81.65 on higher Euro, while the Australian Dollar last traded higher at 89.08. Commodities were generally higher.

Oil prices rose due to the lower US dollar.  The benchmark crude NYMEX for September delivery was higher 1.7% (or $US1.37) to settle at $US78.36. Copper continued to shine rising to an 11-week high on signs growth is sufficient in China and the U.S. to spur demand. Copper prices are trading well above the key $US3.00 a pound, Copper for September delivery delivery  was up 1.4% (or 4.4 cents) at $US3.2850 a pound, the highest settlement price since mid-May.  Gold rose, with August gold was uo $US8.80 at $US1,171.20 an ounce.

Key News International Drivers Today

US –  U.S.gross domestic product data release. S&P 500 companies continue to report earnings this week.
EU – M&A activity. Bank shares rose after the Basel Committee on Banking Supervision relaxed some of its proposed capital and liquidity rules.
CHINA –  Economic fundamentals are “good”.  Industrial metals prices rise.  JP Morgan says equities starting to look attractive.
JAPAN –   companies continue to report earnings this week.

Markets Overview

US GDP Report Gives Pause; ASX to Trade Lower

Market

Movement

The Dow Jones Industrial Average

Down -0.3% (or -31 pts)  at 10,467

The S&P 500

Down -0.4% (or -5 pts)  at 1,102

The Nasdaq

Down -0.6% (or -13 pts)  at 2,252

The FTSE 100

Down  Marginally -0.1% (or -6 pts)  at 5,314

The German DAX

Down -0.7% (or -44 pts)  at 6,135

SSE Composite (China)

Up -0.5% (or 14 pts)  at 2,648

The Dollar Index

Down -0.64% at 81.65

The Australian Dollar

Last traded higher at 89.08

The Commodities Index

Up 1.52% at 270.2

Crude Oil Futures

Up 1.7% at $78.27

Gold Futures

Up $8.80 at $1,171.20

Copper Futures

Up 1.36% at $3.2850

SPI Futures

Down -0.5% (or -21 pts) at 4,473

Market

Movement

SSE Composite (China)

Up 0.6% at 2,648

Hang Seng Index (Hong Kong)

Down  Marginally 0.0% at 21,094

Nikkei 225 Index (Japan)

Down -0.6% at 9,696

SPI: Above key Level 4400 – SPI down 0.5% at 4,479….

ASX News Today

The SPI Futures is above the key level of 4400 the ASX is set to open lower as the SPI Futures closed down -0.5% (or -21 pts) at 4,473.   Key levels today are 4500 and 4400, with pivot around 4450. Mining and Energy stocks may offer support with improving commodities prices overnight.  M&A activity continues to drive specific stocks.
AOE- Arrow Energy says gross sales in FY10 are up strongly, with gas and electricity sales doubling from last year.

AUN- Austar 1H10 profit dropped 42 percent. Net profit was $20.69 million compared with $35.5 million for the same period a year earlier. Revenue lifted 6.3 per cent to $351.86 million.

CNP- Centro Properties says it will refinance and extend the debt of its US business as the restructure of the company continued.

IIF- Industrial property developer Goodman Group has confirmed it is considering taking over management of ING Industrial Fund (IIF).

IIN- iiNet the internet service provider is in a trading halt, pending an announcement by the company about a potential acquisition.

LEI- Leighton  has won a five-year contract to provide construction and maintenance services to Queensland’s electricity provider, Ergon Energy.

NUF- NuFarm the embattled agricultural chemicals firm reported the U.S.and Canadian regulators have confirmed a final agreement with Nufarm on measures taken to ensure competition following it’s acquisition of AH Marks Holdings Ltd.

OZL- OZ Minerals the copper miner continues to seek acquisition opportunities and has already made non-binding offers for projects.

RIO- A state-owned Chinese company is buying a stake in a Rio Tinto iron mine in Guinea in West Africa for $1.5 billion.

SBM- St Barbara the WA gold producer said it produced 231,018 ounces in fiscal 2010, meeting annual guidance for 2010 and anticipates growth ahead.

Economic Reports :
AFOM – to auction $500 million of March 2019 Treasury notes
RBA – will report on financial aggregates data for June.
Companies:
AWE – releases quarterly report
ERA – ERA releases full year results
ORG – Origin releases quarterly report
MQG – Macquarie Group Ltd AGM today
PDN – Paladin Energy Ltd releases quarterly report
SGT – Singtel AGM today

Expect to see our market trade lower again today.  Time to protect positions and take profits.

Market Summary

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

US ADRs –  Mixed!!!…

BHP up 0.4% & RIO flat; AWC up1.1%
ANZ up 1.6% & NAB up 2.5%
NEM up 0.6%, JHX down 0.4%, NWS down 0.5%
Commodities Stock Index up 0.2%
Gold Stocks Index up 0.2%
Oil Stocks Index up 0.6%By Michael Hevern
Head of Research

Stock Market Analysis: Weekly Market Wrap

Friday, July 23rd, 2010Michael

Weekly Market Wrap – Earnings, Economy, Expectations

Overseas markets started the week trading higher after a sell-off on Friday last week. Markets (with the exception of Japan and China) are generally either at, or just above, the downtrend line that has been in place since the April sell-off, and they are also above their 200 day moving averages. This is obviously a positive and has been helped by the generally strong earnings season from the S&P 500 companies in the U.S. The big test for the European markets will be the investor reaction to the banks “stress test” reports due out tonight.

Copper has also been a highlight this week breaking into new monthly highs. This is another positive for the markets as copper is considered a bellwether for underlying economic strength.

US Markets

The U.S. markets have traded higher for three out of four of the past days and have broken the downtrend line that has been in place since April. The reporting season has progressed well this week as the majority of companies have beaten lower expectations, however revenue growth has disappointed. The standout performers were those multi-national companies that do not rely on the underlying strength of the U.S. domestic economy. IT and transport companies have beaten forecasts and this is another good sign for the ongoing economic recovery. However the Fed Chairman Ben Bernanke shook the markets on Wednesday when addressing the Senate by saying that the outlook for the U.S. economy remains “unusually uncertain”, and that the Fed plans no specific steps “in the near term” to try to fuel the struggling recovery. Investor concerns eased overnight though, as he reiterated that the Fed will remain accommodating and it is prepared to take further action to support the economy if the economic outlook deteriorates.

Overnight the Dow closed up 2.0% at 10,325, while in the broader market the S&P 500 index was up 2.3% at 1,094 and the tech-heavy Nasdaq ended up 2.7% at 2,246.

European Markets

The European markets have spent the week trading in a tight range – investors were not keen to take a substantial position prior to tonight’s release of the bank “Stress Tests” results. The tests will review 91 banks (14 from Germany, 6 from Greece and 4 from the U.K.) to determine whether they could withstand a shrinking economy and a drop in government bond values (assuming a 17 percent loss in Greek government debt and 3 percent loss on Spanish bonds). Overnight in London the FTSE 100 index closed up 1.9% at 5,314, the German DAX up 2.5% at 6,142, while in France the CAC was up 3.1% at 3600.

Asian Markets

The key news in Asia continues to point to a slowing economic recovery. Investors have taken the view that this will encourage the Chinese government to ease its monetary policies, as it appears to have engineered a “soft landing”, at this stage. The Chinese market looks to be finding support at current levels. The Japanese market has pulled back again, after growing concerns that the strong Yen will impact their exports. Overnight in China, the SSE composite closed up 1.1% at 2,562, while in Hong Kong the Hang Seng Index was up 0.5% at 20,590 and in Japan the Nikkei 225 Index was down -0.6% at 9,221.

Commodities

Oil prices held up this week on improving investor sentiment in the U.S. and the plugging of the Gulf of Mexico spill. The benchmark crude NYMEX for September delivery rose 3.5% (or $US2.74) to settle at $US79.30 a barrel. Copper prices rose to new monthly highs, above the key $US3.00 a pound, up 2.7% (or 7 cents) at $US3.1675 a pound. Gold is looking to find support – August gold was up overnight $US3.80 at $US1,195.60 an ounce.

ASX News

The Minerals Resource Rent Tax (MRRT) raised it head again this week, with those miners who were not invited to participate in the negotiations of the proposed tax threatening to resume the damaging advertising campaign.

Overseas market movements have dictated Aussie investor sentiment, but China and the U.S. markets appear to be finding support at current levels.

Our View

Markets have drifted higher as trading volumes started to pick up towards the end of the week. Overseas markets have the potential to punch through key resistance levels next week, particularly if the U.S. earnings season continues to support sentiment and the European markets react well to the bank “stress tests” tonight. The key support level on the ASX is still around 4,200 and the key levels for our index next week are 4550 and 4350, with pivot at 4450.

Overseas markets are keenly anticipating the EU bank “stress tests” due out tonight. In Australia the upcoming elections will add to the uncertainty in the markets near term, particularly on the MRRT tax front.

The S&P ASX200 is currently trading around 4450.

By Michael Hevern
Head of Research

Stock Market Analysis: Fed Warns on U.S. Growth. ASX to Trade Lower Today

Thursday, July 22nd, 2010Michael

Stock Market Analysis

Fed Warns on U.S. Growth. ASX to Trade Lower Today

Overseas markets were mixed with comments from the Fed Chairman weighing on the US markets to continue to rise, while Europeans were cautious ahead the European bank “stress tests” results due Friday, but manged to push their markets higher.

The SPI Futures is below the key level of 4400 the ASX is set to open lower as the SPI Futures closed down -1.1% (or -49 pts) at 4,349. Our market looks set to trade lower today. Key levels today are 4400 and 4300, with pivot around 4350. Sectors were weak across the board in the U.S. and this will pressure our markets today. M&A activity continues to drive specific stocks.

US Markets

U.S. stocks closed sharply lower on overnight after the Fed chairman Ben Bernanke warned that the U.S. economy has weakened and that the economic “outlook remains unusually uncertain”.  Bernanke reiterated that the Fed will remain accommodating, however he ruled out any additional near term stimulus spending and said the unemployment will likely remain above 7 percent until at least 2012 (the next election).  The selloff was broad-based and most sectors were around 1.5 percent lower.  This was despite the beter-than-expected reports from Morgan Stanly and Wells Fargo.  Among the stocks reporting tonight include: Microsoft, Amex.

The Dow closed down -1.1% (or -109 points) at 10,121, while in the broader market the S&P 500 index down -1.3% (or -14 points) at 1,070 and the tech-heavy Nasdaq ended down -1.6% (or -35 points) at 2,187. Two stocks fell for every one that rose on the NYSE.

European Markets

European markets finished higher breaking a four session losing streak session. Investors are still cautious though, ahead of the results of the European bank stress tests are due 23 July.  In London the FTSE 100 index closed up 1.5% (or 75 points) at 5,215, the German DAX up 0.4% (or 23 points) at 5,990 and the French CAC was up 0.8% (or 26 points) at  3,494.

Asian Markets

Most Asian markets rose yesterday, with the exception of Japan on their concerns of the impact of a stronger Yen on their export economy.  The Shanghai Composite finished nearing a three-week high on the back of a report that the government will boost investment in the alternative energy sector as well as expectations of strong first half profits for airlines.  In China the SSE Composite closed up 0.3% (or 7 points) at 2,535, while in Hong Kong the Hang Seng Index was up 1.1% (or 223 points) at 20,487 and in Japan the Nikkei 225 Index was down marginally -0.2% (or -22 points) at 9,279.

Commodities

The Dollar Index up 0.7% at 83.32 on lower Euro, while the Australian Dollar last traded lower at 87.64.

Crude oil prices dropped after the weekly report showed U.S. inventories on the rise (up 400,000 barrels).  The benchmark crude NYMEX for August delivery was down 1.3% (or $US1.02) to settle at $US76.56. Copper prices are trading above the key $US3.00 a pound, Copper for September delivery delivery was up 3.0% (or 9.2 cents) at $3.0930  a pound.  Gold was steady, with August gold flat at $US1,191.80 an ounce.

Key News International Drivers Today

US – Fed Chairman Ben Bernanke warns on the “uncertain” economic outlook. S&P 500 companies continue to report earnings this week.

EU – M&A activity. Bank “stress test” results on the 23 July.  .

CHINA – Bargain hunting continues, on speculation the government may ease policies.

Markets Overview

US Earnings Give ASX a Positive Lead Today

Market

Movement

The Dow Jones Industrial Average

Down -1.1% (or -109 pts)  at 10,121

The S&P 500

Down -1.3% (or -14 pts)  at 1,070

The Nasdaq

Down -1.6% (or -35 pts)  at 2,187

 

 

The FTSE 100

Up 1.5% (or 75 pts)  at 5,215

The German DAX

Up 0.4% (or 23 pts)  at 5,990

SSE Composite (China)

Up 0.8% (or 0 pts)  at 36.2

 

 

The Dollar Index

Up 0.69% at 83.32

The Australian Dollar

Last traded at 87.64

The Commodities Index

Flat at 261.5

 

 

Crude Oil Futures

Down 1.3% at $76.56

Gold Futures

Flat at $1,191.80

Copper Futures

Up 9.3 cents at $3.0930

SPI Futures

Down -1.1% (or -49 pts) at 4,349.0

 

 

 

 

Market

Movement

SSE Composite (China)

Up 0.3% at 2,535

Hang Seng Index (Hong Kong)

Up 1.1% at 20,487

Nikkei 225 Index (Japan)

Down  Marginally -0.2% at 9,279

ASX News Today

The SPI Futures is below the key level of 4400 the ASX is set to open lower as the SPI Futures closed down -1.1% (or -49 pts) at 4,349. Our market looks set to trade lower today. Key levels today are 4400 and 4300, with pivot around 4350. Sectors were weak across the board in the U.S. and this will pressure our markets today. M&A activity continues to drive specific stocks.
AXA- AXA Asia Pacific expects 1H10 operating earnings to rise 5.7 percent.BDG -Bendigo Mining the gold producer Bendigo Mining is in a trading halt pending a merger proposal announcement.
BHP- quarterly production figures were strong. They increased shipments of metallurgical coal by around 50 percent, as steel production recovers.
JET – the ACCC has called for comment on Jetset Travelworld’s proposed $180 million takeover of Stella Travel Services.
MCC- “former” suitor Peabody will not confirm whether it stands to benefit from the new MRRT proposal. Peabody has reported that its Australian businesses delivered a 75 percent rise in June quarter pre-tax profits of $255 million.  This sets up a positive lead form other Aussie coal producers this quarter.
PDN- Paladin is on the acquisition trail after NGM Resources has recommended its shareholders accept a $27 million takeover bid from the African-focused uranium miner.
RHG – the former Rams Home Loans Group, has upgraded its profit forecast to between $86 to $96 million, due to a contingent income tax asset.
RXL – Rox Resources the junior exploreris allowing RIO to take a stake and is hoping to develop its Myrtle zinc deposit.
TEN – Ten has withdrawn from the bi-annual survey of television advertising revenue, citing “serious concerns” about the numbers collected.
WOW- Woolworths the grocery heavy weight reported disappointing 4Q sales, with its lowest sales growth n 10 years.

TLS- Telstra is shedding more than 300 senior management roles in Sydney and Melbourne (no frontline staff will lose their job)

Economic Reports :

AXA – AXA Asia Pacific Holdings Ltd group CEO Andrew Penn is will address a business lunch today in Melbourne.
AFOM -  to auction $500 million of October 22, 2010, Treasury notes.
MQG – Macquarie Group deputy managing director Richard Sheppard will address a business lunch today.
NAB – National Australia Bank releases its business survey for the June quarter.

REPORTSJune quarter production reports are due from Santos Ltd, Newcrest Mining Ltd and Beach Energy Ltd, and Petsec Ltd releases June quarter and first half results.

Expect to see our market trade lower today.
Market Summary
ASX – to open lower
US & UK/Europe – mixed.

US ADRs –  Broadly lower!!!…

BHP down 1.2%  & RIO down 1.2%; AWC down 3.8%
ANZ down 1.8% & NAB down 2.8%
NEM down 1.4%, JHX down 3.2%, NWS down 2.3%
Commodities Stock Index down 1.2%
Gold Stocks Index down 0.5%
Oil Stocks Index down 1.3%
By Michael Hevern
Head of Research

Stock Market Analysis: Weekly Market Wrap

Friday, July 9th, 2010Michael

Weekly Market Wrap

Overseas markets started the week trading lower but this has given investors a chance to step in and pick up stocks that have been heavily oversold. The economic news in Australia continues to surprise to the upside. The mining sector and Merger & Acquisition activity picked up this week on the resolution of the RSPT. Improving investor sentiment was also supported with the better-than-expected employment report and the International Monetary Fund’s (IMF) upgrade of its economic growth forecasts.

Markets worldwide continued higher overnight as the IMF upgraded its 2010 global growth forecast to 4.6 percent (from 4.2 percent), citing robust expansions in Asia and renewed U.S. private demand. It warned that the EU debt issues pose a significant risk to recovery and expect the Asian regional economy to grow 7.5 percent in 2010 (up from 7 percent).

US Markets

The U.S. markets have traded higher for a third straight day for the first time since April. Investor sentiment was supported after the Department of Labor said new claims for US unemployment benefits had dipped more than expected last week, with initial claims falling to 454,000 in the week ending 3 July (from 475,000 in the previous week).

The recovery this week has been broad-based across all sectors. Overnight the Dow was up 120 points, or 1.2 per cent, to 10,139. In the broader market the S&P 500 index was up 10 points (or 0.9 per cent) to 1,070 and the tech-heavy Nasdaq ended up 16 points or 2.8 per cent at 2,175.

European Markets

Overnight the European Central Bank (ECB) and the Bank of England (BoE) both confirmed that they will leave their interest rates at historic lows. Banks have led the European markets higher this week as investors are becoming more comfortable with the stress test methodology that the banking system will undergo, as it shows the EU regulators are serious. EU regulators have confirmed they will carry out their “stress test” on 91 banks (14 from Germany, 6 from Greece and 4 from the U.K.), accounting for 65 percent of the bank areas. The test will review whether the banks could withstand a shrinking economy and a drop in government bond values (assuming a 17 percent loss in Greek government debt and 3 percent loss on Spanish bonds). The results will be released on 23 July on a bank-by-bank basis. This news helps the European markets. In London the FTSE 100 index was up 90 points (or 1.8 per cent) to 5,014 points, the German DAX was up 43 points, or 0.7 per cent, to 6035 points, while in France the CAC rose 54 points, or 1.6 per cent, to 3,538 points.

Asian Markets

The key news in Asia continues to point to a slowing economic recovery. The markets were mixed overnight with Chinese shares drifting lower after posting early gains, as investors remained cautious ahead of Agricultural Bank of China’s market debut on July 15. This IPO is set to be the world’s largest. In Japan the Nikkei index of the Tokyo Stock Exchange was up 2.7% to end at 9,535. The benchmark Hang Seng Index was up 1.0% at 20,050 and China was down 6 or 0.3% at 2,415.

Commodities

Oil prices were up this week on improving investor sentiment and the IMF upgrades. The benchmark was up for crude NYMEX in July and delivery up US$1.37 to settle at US$75.44 a barrel. Copper prices rose above the key $US3.00 a pound, at $US 3.0155 a pound. Gold has dropped over 4% this month with August gold down $US2.80 overnight to settle at $US1,196.10 an ounce.

ASX News

Earlier in the week the RBA left interest rates on hold as expected. The mining Merger & Acquisition activity started to pick up with the Government’s evolution of the RSPT to the Minerals Resource Rent Tax (MRRT), which is a watered down version of the RSPT. On Monday we had over $5 billion worth of M&A deals including Centennial Coal and CSR. Bargain hunters have stepped into the market, but they would be well advised to stick to liquid stocks at this stage. Investors have been bolstered by the improving employment and upgrades in world economic growth forecasts by the IMF.

Our View

Markets have bounced this week, and we may see come consolidation next week. The key support level is still around 4,200 and the key levels for our index next week are 4550 and 4250. Overseas markets will be keenly anticipating the EU bank “stress tests” due out 23 July. The positive economic news in Australian should support our market next week.

By Michael Hevern
Head of Research

Stock Market Analysis: Gold Rules

Friday, June 18th, 2010Michael

We had mixed leads from overseas markets in our shortened trading week, with most markets trading at, or just above, their 50 day moving average. Gold continues to trade strongly.

U.S. Markets

The U.S. continues to get mixed data signals about the strength of its recovery. The latest data was the U.S. Index of leading indicators, a key gauge of the outlook for growth over the next three to six months. This rose 0.4 per cent in May, while other data showed the cost of living dropped and the claims for jobless benefits unexpectedly increased to the highest level in a month. The data is confirming that even though the U.S. economy will keep expanding in the second half of 2010, it will begin with inflation and little job growth. The U.S. markets are trading into their 50 day moving average, with the Dow Jones at 10,434 and the S&P 500 Index at 1,116.

BP was again a focus overnight with the CEO Tony Hayward being grilled by the Congress in the U.S. BP agreed to 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 what’s even more incredible is that BP are likely to survive this scenario, highlighting what a profitable business they have.

European Markets

In Europe the primary focus has been Spain’s sovereign debt, but concerns appear to be abating as Spain had two successful bond auctions to help pay their debt in the past couple of days. Other positives from Europe include Spain agreeing to allow its banks to undergo “stress testing”, the results of which will be reported in the next couple of weeks; and Greece has been assessed as being on track with the reforms required as part of its rescue package setup to save it from bankruptcy, this is according to a delegation of the International Monetary Fund (IMF), the ECB and EU. This saw the euro trade above $US1.2380.

In the U.K. the FTSE is at 5,253, Germany and the French CAC are trading above their 50 day moving averages.

Asian Markets

During the week the IMF 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 that Asia is set to expand 50 per cent in the next half decade. China was closed most of the week and Japan’s Nikkei index has bounced above 10,000.

Gold is strong

Gold continues to outperform  in the commodities market and closed at record highs overnight at $US1,245.60, and crude oil has also been trading higher around $US77.

Resource super profits tax

In Australia the resources super profits tax (RSPT) continues to be debated, with BHP, Fortescue and Xstrata all still adament that they have not been consulted by the government about the tax.

Our View

Markets are again at key decision levels, as the bulls and the bears are fighting for control. The bulls got the slight upper hand this week by pushing most markets from the 200 to the 50 day moving average levels, but until indices close significantly above these levels, markets will lack positive momentum.

Traders can use the three day highs and lows as triggers to confirm short term market movements, remember that we’re now trading into the end of the financial year. The ASX 200 is above the key pivot level of 4500 at 4,540, at the confluence of the 50 and 200 day moving averages. Investors will be watching carefully as to how the market reacts here, with the key levels for our index next week being 4650 and 4450.

By Michael Hevern
Head of Research

Make the most of the trading tips and market analysis provided in this blog – take advantage of our low brokerage rate of $19.50 and trade shares with Trader Dealer. Also get FREE live ASX Data until December 2010 with our online trading platform Rapid Trader.

Friday, 21st May 2010 Morning Wrap

Friday, May 21st, 2010Michael

Morning Market Wrap

GFC Mark II? – as Overseas Markets Meltdown

US stocks sank again, closing at their lows, as concerns over poor employment figures, European debt, the advance of financial overhaul legislation and austerity measures sent investors heading for the exit yet again. In Europe we saw a market sell-off as credit markets cease and Germany calls for new banking regulations.

The SPI Futures are below key level of 4400, the ASX is set to open lower as the SPI closed down 106 points (or 2.5%) at 4211 and overseas weakness will weigh.

US Markets

Germany’s short selling ban worries investors & now calls for banking regulations.

US markets join European route.

SP500: down 3.9% at 1,071
DOW down 3.6% at 10,068
Broadly Lower – Investors are scared over Europe
NASDAQ: down 4.1% at 2,203

Dollar Index: Euro Sinks Again Towards 4-year Lows
A$ down 81.38c (Risk Aversion Rules)

FTSE: down 1.7% at 5,073 – Financials Weighs
DAX down 2.0% – Europe Runs Scared
Markets Sell-off over Debt and Germany’s “Temporary Naked Short Selling Bans”

Oil: down 2.7% at ($68.28)
Recovers from 8% Sell-off and focus still on spread of oil spill in Gulf of Mexico

Gold: down 0.5% at ($1,180)
Commodities Weigh;

SPI: Below Key 4400 ASX
SPI down 106 (-2.5%) at 4211

ASX News

The SPI Futures is below key level of 4400 the ASX is set to open lower as the SPI closed down 106 points (or 2.5%) at 4211, and overseas weakness will weigh.

BHP – Execs are going to Canberra to meet with Treasury over Henry Tax Reform today

HSP – gets bid sweetened from $5.50 to $5.75/share. Shares were up 2.9% at $5.33.

ILU – Joins chorus on Henry Tax.  Tax is unfair citing compliance cost s burdens and  the fact that to ILU sharholders who have forgone $650million in dividends in the past 3 years,
and now that operations are about to become profitable they wuill be hit by the resources tax.

SHL – likely to sell-off as it says FY10 result will fall short due to government’s cut to Medicare fees for pathology services

Market volatility will continue to rise near term as world investors come to terms with the ramifications of the credit squeeze and new regulatory regimes.

ASX – to open sharply lower

US & UK/Europe – meltdown

U.S. ADRs  – Broadly Lower!!!…

BHP down 6.2% & RIO down 8.7%; AWC down 8.2%
ANZ down 8.3% & NAB down 6.2%
NEM down 4.5%, JHX down 5.9%, NWS down 5.3%

Commodities Stock Index down 4.9%
Gold Stocks Index down 4.5%
Oil Stocks Index down 4.0%

Presented by Michael Hevern
MDS Financial

Thursday, 20th May 2010 Morning Wrap

Thursday, May 20th, 2010admin

Presented by Michael Hevern
MDS Financial

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

Overseas Markets Lower Over Continuing Debt Concerns

US stocks sank again, closing at their lows, as concerns over European debt, the advance of financial overhaul legislation and austerity measures sent investors heading for the exit. In Europe we saw a market sell-off over Germany’s “Temporary” Naked Short Selling Bans.

The SPI Futures is below key level of 4400 the ASX is set to open lower as the SPI closed up 7 points (or 0.1%) at 4396, and overseas weakness will likely weigh.

US Markets

Germany Short Selling Ban Worries Investors US Markets Giving Back Gains for the Year

SP500: down 0.5% at 1,115
DOW down 0.6% at 10,444
Broadly Lower – Investors Nervous Over Europe
NASDAQ: down 0.8% at 2,298

Dollar Index: Lower as Euro Recovers Off 4-year Lows A$ down 84.82c (below February Lows)

FTSE: down 2.8% at 5,158 – Financials Weighs DAX down 2.7% – Euro Currency Finds Support Markets Sell-off over Germany’s “Temporary Naked Short Selling Bans”

Oil: up 0.7% at ($69.87)
Recovers and focus still on spread of oil spill in Gulf of Mexico

Gold: down 1.8% at ($1,193)
Commodities Weigh;

SPI: testing key 4400 ASX

SPI up 7 (0.1%) at 4396

ASX News

The SPI Futures is below key level of 4400 the ASX is set to open lower as the SPI closed up 7 points (or 0.1%) at 4396, and overseas weakness will likely weigh.

AAC – is positive about its current performance but has given shareholders no guidance on when they will again receive a dividend.

BHP – Execs are going to Canberra to meet with Treasury over Henry Tax Reform Friday

BKN – Bradken the mining and engineered products provider has raised $50 million through an insto share placement priced at $7.05 per share. A retail share offering to raise up to $15 million will be set at the same price.

FMG – Fortescue shelves $17bn in projects as it put two of its three expansion projects on hold due to the financial impact of the federal government’s proposed Resources Super Profits Tax (RSPT). May cost 30,000 in jobs.

MQG – expects improved operating results in all its businesses in fiscal 2011, reaffirming guidance from the company’s full-year results presentation last month.

RIO – Execs are going to Canberra to meet with Treasury over Henry Tax Reform today

SGP – Property developer confirmed its guidance and says it is on track to deliver record residential sales this FY.

TLS – CEO Thodey says Telstra is in deep discussions with NBN Co, the company set up to build the government’s broadband network.

Market volatility will continue to rise near term, as world investors come to terms with the ramifications of the ECB $1 trillion rescue package.

We the suggest trading strategy is to get small, reduce you exposure to equities. Be prepared to open/hold short positions.

ASX – to open marginally higher
US & UK/Europe – negative leads

U.S. ADRs – Broadly Lower!!!…

BHP down 1.6% & RIO down 2.4%; AWC down 1.3% ANZ down 2.9% & NAB down 4.8% NEM down 2.8%, JHX down 1.8%, NWS down 1.9%

Commodities Stock Index down 1.1%
Gold Stocks Index down 3.9%
Oil Stocks Index down 0.5%