Stock Market Analysis: Bears Prevail In Europe | Online Stockmarket …
* US stock markets sold down again, weighed down by the energy sector, which fell -4.1% last week, due to concern over geopolitics in Europe.
* European stock markets fell to their lowest levels for there months, after factory orders in Germany fell and Italy has regressed into recession again.
* Asian stock markets fell again yesterday, following on from weak overseas leads. We had weak leads again overnight.
* Commodities prices rose. Gold prices rose to $US1,307, while crude-oil held below $US97. Copper edged down to US3.16c.
The Australian sharemarket flat yesterday with the ASX200 up 0.1% at 5,512, but trading volumes were down. Local investors are looking look ahead to company earnings season which starts in earnest next week. The market was weighed down by the Financials sector which fell -0.3%, Consumer staples eased -0.2%, while the Materials sector and the Consumer Discretionaries rose 0.3%.
Reporting continues today with: BWP Trust, Flexigroup, Henderson Group, TABCorp.
Friday: Newscorp, Realestate.com
The SPI 200 futures are down -0.2% to 5450, giving a negative lead for the ASX market today, as the US and EU markets fell again. The 5500 level will be key for the ASX200 today. The Australian dollar edged higher to US93.5c.
US Markets
US stock markets finished flat as selling eased, as the financials provided some support.
The three benchmark indexes finished flat for the session. Six of the ten S&P500 sectors finished in the red, led by falls in the Utilities down -1.3%, the Tech and Industrials sectors fell over -0.3%, while gains were led by the Materials sector up 0.7% and Financials up 0.5%. The VIX eased -3% to 16.4. The S&P500 is now down -3.4% from its recent peak.
Traders have been selling the rallies in recent sessions, as they move to reduced their risk exposure on the prospect of higher rates as early as mid-2015, due to improving US economic data. With the markets at their 100 day support we saw the selling ease overnight.
The US earnings season continue this week with 72 S&P500 companies due to report this week. Bank of America raised its dividend and sparked some support in the financials, while energy stocks saw some bargain hunting after the sector has retraced over -5% in recent sessions. Failed M&A deals hit a number of stocks including Sprint, Time Warner and Walgreen. Of the S&P500 companies that have reported 76% have beaten on profits, 65% beat on revenues, while 66% beat sales forecast.
For the session Dow Jones closed FLAT at 16,443, the S&P500 flat at 1,920 and the NASDAQ closed flat at 4,355, while on 10-year held at 2.46%, a twelve month low.
European Markets
European stock markets fell to their lowest levels for there months, after factory orders in Germany fell and Italy has regressed into recession again. Investors are concerned that the build up in troops at the Ukrainian border could portend another incursion into the Ukraine.
The Stoxx Europe 600 Index fell -0.9% for the session, after giving back early gains and some. The index is down -6% in the past month. Concerns prevail over financial contagion and the escalating violence in the Middle East and Ukraine. Geopolitical tensions continue, with the continuing violence in Ukraine and Russian troop buildups and the Gaza Strip.
Traders sentiment continues to be weighed down on concerns over geopolitics and caution over the impacts of the EU limits Russia’s access to capital markets. In earnings of the Stoxx Europe 600 that have reported 57% beat on profits and 51% beat on sales, according Bloomberg.
The Italian market slumped 02.7%, after its economy fell into recession for the first half of the year, with GDP contracting -0.2% in the second quarter. This is the third time the economy has regressed into recession since the GFC.
The German market retreated once more after Ge,man factory orders fell -3.2% in June, the largest contraction since September 2011 and well short of the +0.9% predicted. The London markets fell to new three week lows having fallen -1.8% last week, the most in three weeks.
For the session the German DAX 30 closed down -0.7% at 9,130, the UK the FTSE 100 closed down -0.7% at 6,636, the French CAC 40 closed down -0.6% at 4,207, while the Spanish market closed down -1.0% at 10,246.
Asian Markets
Asian stock markets fell again yesterday, following on from weak overseas leads.
The MSCI Asia Pacific Index fell another -0.5%, in broad selling as all ten industry groups finished in the red, with the Telecom sector the worst performer after China Unicom disappointed. In earnings of the corporates that have reported on the MSCI Asia Pacific Index since the start of July, 60% have beat on earnings.
The Chinese market fell for a second session, led by weakness in the financials and energy sectors down nearly -1%, on concerns that global growth could wane in the face of the economic environment. The People Bank of China (PBOC) has also warned that it not in the position to extend monetary easing to further stimulate growth at this stage. The corporate earnings continues until the end of August.
The Japanese market has closed lower for a fourth straight session to its lowest close since June, due to disappointing earnings, in the first quarter since sales tax was raised back in April. The Hong Kong markets eased backing off its highest level since mid-November 2010 as the market remains vulnerable to further downside.
For the session the Shenzhen Composite down -0.3% at 2,363, the Hong Kong Hang Seng closed down -0.3% at 24,584, and the Japanese Nikkei closed down -1.1% at 15,159, while the South Korean KOSPI closed down -0.3% at 2,060.
Commodities
The Dollar Index edged eased to 81.42 (holding around its highest level for a year) on a higher Euro, and the Aussie Dollar rose to US93.5c. Commodities prices rose.
Overnight the NYMEX WTI Crude delivery down -0.1% to $US96.90, the COMEX Copper closed down -0.1% to 3.16, the COMEX Gold closed up 1.7% at $US1,307.10.
ASX News
AAD – Ardent Leisure the theme park and Goodlife gym owner is more than doubling its Western Australia fitness clubs by buying Fitness First sites in the state’s capital.
ABC – Adelaide Brighton the construction material firm will buy concrete businesses in South Australia and Queensland.
ASL – Ausdrill the mining services firm, has flagged another hit to its profit and warned a recovery in its industry will take longer than previously expected.
BCI – BC Iron the Pilbara iron ore miner, predicts the iron ore price will head above $US100 per tonne over the next six months as demand for the company’s product remains strong.
DOW – Downer EDI the engineering group has predicted a weaker net profit for 2015 citing “very difficult” mining markets as contractor reported 2014 profits in line with expectations, in a worrying sign at the start of the earnings season. Downer said is targeting NPAT of $205 million for fiscal 2015 after reporting a 6% rise in 2014.
NHF – Deutsche Bank cuts NIB Holdings to Hold (from Buy) after trimming its FY14 EPS forecast 2%, for a forecast 10% compound annual growth rate.
ORI – Orica will look to split off its chemicals business as it looks to refocus on its mining services division.
SPO – Spotless the cleaning company has sealed a $1.2 billion contract from the Australian Department of Defence.
WES – Wesfarmer’s Coles has put one of its most prominent critics on its payroll as it works to repair its battered image over its treatment of suppliers.
Market Summary
ASX – to open lower
US & UK/Europe – lower
ANZ 0.8%, NAB 0.8%, NWS -0.4%, STO -1.6%
AWC 1.8%, BHP 1.9%, RIO 1.0%, NEM 1.2%
By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email [email protected].
Reporting next week:
Monday: Bendigo, JB Hi-FI
Tuesday: Bradken, Dominos, GPT, United Group, Wotif
Wednesday: CommBank, Computershare, Carsales, Echo, Goodman Fielders, OZ Minerals, Primary, Skilled, Suncorp.
Thursday: Crown, Dexus, Envestra, Fairfax, Goodman Group, SingTel, Telstra
Friday: ANZ, Crown, James Hardie
Tags: Asian Markets, ASX, ASX News, Business News, Commodities, Crude Oil, European Markets, Ex Dividend, gold price, Nasdaq, Stock Market Analysis, stockmarket, trading, US Market wrap
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Stock Market Analysis: Bears Prevail In Europe | Online Stockmarket …
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