Presented by Michael Hevern
Cubefinancial
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Good Morning and Welcome to Cube Wrap for Thursday, 11th of September, I’m Michael Hevern for Cube Financial.
The information provided within this presentation is general advice only and you should consult the services of a financial professional in order to ascertain whether the information is applicable to your investment strategies and risk profile. Again, it is general advice only.
Well the Dow recovered slightly overnight. It was fairly broad-based recovery actually on the S&P 500 with two stocks up through a big one that was down. The big news of course was the continuing backlash of Lehman’s third quarter loss that they reported $4bn biggest in their company’s history, which dates back around about 150 years though they have not been listed since the 90s. The Dow was up 0.3% and S&P 500 up 0.6% on the session.
We saw the NASDAQ recovered somewhat as well, but you can see they are chart that is still in control there, would need to close above the 2300 really in order to show that this is going to be turned in that market. Still looking to tentatively test this July to March lows and the big news in the NASDAQ market was the fact that the Texas instruments stuck to their earnings forecast and that helped the market.
Lehman’s reported a $4mn of quarter loss, the stocks fell further 6% after falling over 45% on the previous session and energy stocks did help the US markets with Demon Energy stocks breaking their loosing streak and we see that the oil index stocks were up 4% on the session and the gold stocks index was up 4% as well on the session.
We saw stocks like Newmont up 2.6%, Chevron and Exxon up around about 3% on the session. On the NASDAQ front, we saw that Texas being the big story there, Exxon Mobil was up 2.7% on the session and Texas Instruments were also up, RDM is up as well on the tick run, up 3.7% on the session.
Financials did weigh on the market, were rather mixed on the US down market with Washington Mutual down 20% after its fears that it maybe in the fall of its debt going forward.
The FTSE in the UK, we saw that market slipping 0.9% on the session, is on the back of low commodities and banks are concerned of what is happening in the US. We saw metal prices pulling miners down and banks low on the consent of Lehman Brothers.
Banks generally were down between 2.8% and 5.3% in the UK while retail stocks were also down that was lead by next down 2% after less than 12% fall of first half profits and its rival market dimension was down 4% on the session as well. We saw miners, Xstrata, Rio, and Eurasian Natural Resources all down between 3% and 8.8% on the session.
In the drug marketing sector, we saw Glaxo Smith Kline was up 2% after it said it is going to pay as much $1.5bn were needed to develop new drugs against the inflammatory disease with Anglo-German volume tick sales there and we also saw the retail or property sector recover slightly, they will cover on the UK as British land and land securities around 4.83% on the session after positive broker comments on that sector.
In the Nikkei or the Asian markets, we saw the Nikkei down 0.4% on the session. Exporters led the way there. Hong Kong was down 2.4% and the Chinese market was fairly flat up 0.23%. We saw banks down in the Japan market down through, Mitsubishi recovering towards the end of the day up 3.2% and Mitsuho planning to improve up 2.8% after being sold off in the previous session.
Sony one of the exporters and Canon fell 2.8% and 3.9% respectively. For every 9 stocks up, we saw 7 declining in the Japanese market, so not overly convincing up move there, but at least it closed positive. Oil down to just over $102 that was despite the fact that they came out yesterday and said that they are going to cut production bonus, might be at 500 million barrels. There is still a concern about this, but we did see energy stocks being picked up as market hunters said that maybe a turnaround on the oil price around the $600 mark.
Gold was down significantly overnight, down over 3.7%, almost $30 closing 862. We saw other commodities mixed with silver down 7%, copper up 0.2%, lead up 1.7%, zinc up 2%, aluminum up 1%, and nickel flat for the session.
We expect energy stocks to recover in the Australian market. Our market is likely to stabilize today after that biggest sell off yesterday, especially in the commodity stocks. We are looking for big catalogues to recover.
So we have in the news today Rio Norwegian Sovereign Fund selling its $1.1bn stake due to ethical concerns about an operation that Rio is involved in Indonesia and has avoided a certain stake in that operation. Seven shareholders have agreed to the $720mn buy back, but Mr. Stokes is not commenting on whether he was selling to that he currently holds 45% stake and could increase his stake to 56%, so we’ll just have to wait and see what happens there. Paper links are auctioning off their Australian manufacturing assets and that is progressing okay. Then the question is what price that will get for it and the money there will be used to shore up its cash banking.
BHP ADRs up 5%, I think Rio was up around about 4% as well in the US, leading despite the comments in the Norwegian sovereign fund. Banks ADRs above between 3% and 5% in the US as well. Property Trusts have the greatest of upgrade in the UK and we saw a bit of buying of the trust yesterday as well towards the end of the day, so this is probably something to look at. We will look to open up higher and look to see some recovery in this big sell off yesterday.
Should you have any questions about the information provided within this presentation, please call the equities and options desk or the CFD advising desk on the numbers provided, and as always trade carefully.
