* US stock markets ended lower for a fifth session, in a cautious session.
* European stock markets ended lower for a fifth session, after recording their longest losing streak in over five months, as the ECB talked of the risks over eurozone growth..
* Asian markets ended lower again, with fall again led Japanese profit taking from recent highs.
* Commodities prices lower, Gold prices are now trading around $US1,225, while crude-oil traded higher around $US97.
The ASX market is looking to open lower today, with the 5200 level key near-term, as markets continued lower across Europe and the US markets ended lower ahead of the NFP employment report on Friday.
The Australian share market closed at the low of the day yesterday, as the big banks sold off and Qantas plunged over 11%. The ASX had its biggest sell off since early August, wiping off $20 billion from the market’s capitalisation and is now down -5% below the October peak. In a research note Goldman Sachs has recommended large cap banks with exposure to the developed economies, citing the US, Europe and Japan as a key investment theme for next year. It looks like fund managers are looking to take profits on the Aussie banks to reallocate funds.
The SPI 200 futures were down -0.3% at 5,194, giving another negative lead for the ASX market today. The Australian dollar edged lower and is now trading around three month lows at US90.6c.
Crude Oil jumped this week, but is facing key resistance near-term.
US stock markets ended lower for a fifth session, in a cautious session. Economic data continues to improve raising concerns over Fed tapering ahead of the FOMC meeting on 17-18 December.
The three benchmark indexes edged lower, as traders remained cautious ahead of the monthly employment report, as trading volumes were up modestly above the monthly average. Volatilty has jumped to six week highs at 15.1, having risen over the past eight sessions. The S&P500 has fallen -1.3% in the past five session recording its longest losing streak since September. The index is still up 25% for the year and is on track for its best annual performance since 1999.
Eight of the ten S&P500 sectors ended lower again, with the falls dominated by the Financials and Consumer Staples were down -1.0%, the Materials sectors fell -0.7% and the Energy and Tech sectors fell -0.4%. Ten year interest rtes spiked higher and despite a surge in new home sales with purchases for October up the most in three decades, rising on an annual pace of 25.4 percent.
In economic news the US economy expanded at a faster pace in the third quarter, as GDP jumped to an annualised 3.6% (up from 2.8%), its strongest reading since 1Q 2012, while inventories increased the most since 1998. Earlier in the week the ADP jobs data improved adding 215,000 jobs in November, while the Beige report showed US services industries expanded at at a slower pace than forecast. Traders will also be looking to the monthly NFP employment report due Friday, with forecasters looking for a drop in the unemployment rate to 7.2% and Non-Farm employment change of around 200,000.
For the session Dow Jones closed down -0.4% at 15,825, the S&P500 closed down -0.4% at 1,786, and the NASDAQ closed down -0.1% at 4,033, while on 10-year Treasury notes jumped again to 2.86%.
European stock markets ended lower for a fifth session, after recording their longest losing streak in over five months, as the ECB talked of the risks over eurozone growth.
The Europe Stoxx 600 fell another -0.9% for the session. Across the region six of the ten sectors ended in the red again, with falls led by the Energy and Tech sectors down over -0.5%, while gains were led by the Telecoms up 1.5% and the miners up 0.2% on the session. The index is still up around 12% for the year and is still on track for its best annual gain since 2009.
The ECB kept rates on hold at 0.25% and the ECB President said there are downside risks to the eurozone growth prospects, citing weaker domestic demand, increasing commodity prices and slowing export growth.
The German market ended sharply lower, again backing off all-time highs. The index is up around 20% for the year, but valuations are at their highest levels since 2009, which has promoted some profit taking near-term.
The London market edged lower again, while in the UK the BoE left their rates at a record low of 0.5% and government officials raised their forecast growth rate for 2013 to 1.4 percent (up from 0.6 percent redacted back in March) and now expect the UK economy to grow 1.8 percent in 2014. The UK market is at six week lows, as selling was driven by the financials and the industrials which were down -0.2%, while the miners saw some buying up 0.1%.
For the session the German DAX 30 closed down -1.6% at 9,084, the UK the FTSE 100 closed down -0.2% at 6,498, the French CAC 40 closed down -1.2% at 4,099, while the Spain market closed down -1.6% 9,392.
Asian markets ended lower again, with fall again led Japanese profit taking from recent highs. The MSCI Pacific Index fell -0.3% for the session. The index is still up around 9% for the year.
The Chinese market edged lower after profit taking, having reached three month highs. Telecom stocks fell -4%, after having risen 36% for the year. The Japanese market saw profit taking again, recording its largest two day drop in four months, after having risen to its highest level since December 2007. The Hong Kong market eased again holding below the 24,000 level, backing off its highest level since April 2011.
For the session the Chinese Shanghai Composite closed down -0.2% at 2,247, the Hong Kong Hang Seng closed down -0.1% at 23,712, and the Japanese Nikkei closed down -1.5% at 15,117, while the South Korean KOSPI closed down -0.1% at 1,985.
The Dollar Index was lower 80.27 on a higher Euro, and the Aussie Dollar closed higher at US90.6c. Commodities prices were higher.
Overnight the COMEX WTI Crude for DEC13 delivery closed up 0.3% at $US97.50, the COMEX Copper for DEC13 delivery closed down -0.9% at 3.221, the COMEX Gold for DEC13 delivery closed down -1.8% at $US1,225.40.
ASX News Today
ANN – Ansell Limited issued 18,247,727 fully paid ordinary shares at an issue price of $18.50/share to institutional and professional investors under the institutional placement announced on 26 November 2013.
BHP - Potash Corp is cutting more than 1,000 jobs, about 18 percent of its workforce, because of slumping demand for potash and phosphate, two key fertiliser ingredients.
CSL – CSL the blood products and vaccines developer, has granted US firm Janssen Biotech a licence to develop and commercialise its treatment for acute myeloid leukaemia.
NUF – Nufarm the agricultural chemicals and seeds supplier, says seasonal conditions remain challenging in some key cropping regions in Australia, and the summer crop is likely to be below average, says agricultural chemicals and seeds.
QAN – Qantas share were punished after it said it expects to to cut 1000 jobs and post a half-year pre-tax loss of between $250 million and $300 million for the six months to end-December.
VED – Veda Group surged 40 per cent on their first day of trading on the Australian Securities Exchange.
ASX – to open lower
US & UK/Europe – lower
US ADRs – Broadly lower!!…
ANZ -1.9%, NAB -2.3%, NWS -0.8%
AWC -0.3%, BHP -0.6%, RIO -1.1%, NEM -3.0%
By Michael Hevern
D2MX Investment Advisor
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