Stock Market Analysis: Market Fall on News of Stricter Russian …
* US stock markets finished lower for the session, as Russian sanctions trumped consumer confidence and corporate earnings.
* European stock markets snapped a two session losing streak, but pared gains as the stricter Russian sanctions were announced.
* Asian stock markets rose again yesterday, trading at new six years highs, with China up at seven month highs and Hong Kong in bull market territory.
* Commodities prices eased. Gold prices rose to $US1,300, while crude-oil held below $US101. Copper edged lower to US3.219c.
The Australian sharemarket closed modestly higher yesterday, as the ASX200 up 0.2% at 5,588. Yield traders were active as the Consumer Staples setor rose 0.9% and Healthcare sectors rose 0.3%, the Banks edged higher with NAB outperforming up 1.2%. Iron ore miners butilt on to recent gains with Fortescue up another 2.3%. A couple of stocks were punished after reporting profit downgrades QBE slumped -11% and and ALS closed down -6.5%.
The SPI 200 futures eased -0.1% to 5538, giving a subdued lead for the ASX market today, as the US corporate earnings season continues. The Australian dollar held at US93.8c.
The US Dollar Index is at its highest levels since February. Thanks to flight to safety Treasuries trade.
US Markets
US stock markets finished lower for the session, as Russian sanctions trumped consumer confidence and corporate earnings.
The three benchmark indexes all finished down -0.4% for the session. The Dow Jones and the S&P500 eased back from record levels and the S&P500 is now up 6.7% for the year. Nine of the ten S&P500 sectors finished lower, led by falls in the Industrials and Energy sectors fell -0.4%, Utilities the sector fell-0.3%, while Telecoms sector rose 0.1%, paring earlier gains.
In economic news consumer confidence rose to 90.9, its highest level since October 2007, while Case-Schiller reported real estate prices in 20 US cities rose 9.3% in May on year, the slowest pace in over a year.
The US earnings seasons continues as Twitter shares surged 30% after market after reporting better, while Corning, Herbalife and UPs all sold down after disappointing. Of the S&P500 companies that have reported 79% have beaten on profits, 65% beat on revenues, while 66% beat sales forecast. Companies have reported second quarter profits have risen 11%, the fastest growth rate in three years. Analysts expect S&P500 stocks to report profits up 45%, earnings rose 6.2% and sales up 3.3% in the June quarter, according to Bloomberg.
It is a busy week for economic data, with the Fed FOMC began its two day meeting and the monthly NFP employment report is due on Friday. Last week’s benign inflation figures, are seen to give the Fed some room on when they will have to raise interest rates. The Fed is expected to continue its tapering, cutting bond purchases to $US25 billion per month.
For the session Dow Jones closed down -0.4% at 16,912, the S&P500 closed down -0.5% at 1,969 and the NASDAQ closed down -0.1% at 4,442, while on 10-year Treasury notes edged lower to 2.47%.
European Markets
European stock markets snapped a two session losing streak, but pared gains as the stricter Russian sanctions were announced.
The Stoxx Europe 600 Index closed up 0.3% for the session, paring earlier gains when the EU said it will cease granting of access of shares and bonds to Russian state owned banks and will stop exports of equipment used to upgrade the oil and gas industry, while setting up an embargo of the sale of arms to Russia. Geopolitical tensions continued to simmer, with the continuing violence in Ukraine and the Gaza Strip.
The London markets recovered overnight, as traders focused on earnings, with 27 FTSE 100 companies due to report this week, including BP, Shell, Lloyds and Barclays. The German market continued recovered as good news is being tempered by the concerns of the geopolitics in the region and caution over the impacts of the EU limits Russia’s access to capital markets.
In economic news eurozone we will see a plethora of data this week with CPI, GDP, Retail Sales and manufacturing data due for release. In earnings of the Stoxx Europe 600 that have reported 57% beat on profits and 51% beat on sales, according Bloomberg.
For the session the German DAX 30 closed up 0.6% at 9,653, the UK the FTSE 100 closed up 0.3% at 6,807, the French CAC 40 closed up 0.3% at 4,365, while the Spanish market closed up 0.3% at 10,923.
Asian Markets
Asian stock markets rose again yesterday, trading at new six years highs, with China up at seven month highs and Hong Kong in bull market territory.
The MSCI Asia Pacific Index was up another 0.2%, up 2.6% for the month, holding at its highest levels in six years. In earnings of the corporates that have reported on the MSCI Asia Pacific Index since the start of July, 56% have beat on earnings.
The Chinese market rose for an eighth session, its longest winning streak in a year and is at its highest levels in seven months. Tech stocks led the gains and sentiment was boosted as profits at industrial companies in China rose 18% in June on year, the largest jump since September (up from 8.9% in May) and two more Chinese cities eased restrictions on home purchases. The corporate earnings continues until the end of August. Chinese PMI and CPI figures are due out this week and will give a read on the consumer and manufacturing.
The Hong Kong markets finished higher again up to its highest level since mid-November 2010 and has entered into bull market territory after rising 20% from its March lows. The Japanese market recovered for a third session and is trading at six month highs, as investors digest corporate earnings, in the first quarter since sales tax was raised back in April.
For the session the Shenzhen Composite rose 0.3% at 2,331, the Hong Kong Hang Seng closed up 0.6% at 24,640, and the Japanese Nikkei closed up 0.6% at 15,618, while the South Korean KOSPI closed up 0.6% at 2,062.
Commodities
The Dollar Index edged higher to 81.20 (its highest level since February) on a lower Euro, and the Aussie Dollar eased to US93.8c, edging back from its highest level since November. Commodities prices eased.
Overnight the NYMEX WTI Crude delivery down -0.7% at $US100.90, the COMEX Copper closed down -0.8% to 3.219, the COMEX Gold closed down -0.4% at $US1,300.50. Last week the Chinese Gold Association reported a 19% fall in gold demand from January to June, as demand for gold bars fell 62% during in the first six months of the year and gold coin demand also fell 42%.
ASX News
ALQ – ALS Group the analytical testing services group shares plunged after the company announced a surprisingly weak profit outlook, saying it expects its underlying first half net profit will fall by over 25%, citing the volatility across the markets it operates in: the minerals, energy, industrial and food sectors.
BPT – Beach Energy shares have fallen after the oil and gas producer flagged a slide in production in the coming year.
ORI – Orica the chemical giant says it regrets a series of pollution incidents which resulted in it being fined more than $750,000 and has pledged to improve the facilities where the problems happened.
QAN – Qantas has reassured passengers it is still safe to fly over Iraq, despite network partner Emirates deciding to steer clear of the conflict-torn nation.
QBE – QBE shares plunged -11%, after the insurer flagged a slide in its first half profit linked to problems with its Latin American operations.
RXM – Rex Minerals has been given the green light by the South Australian government to develop what it says is Australia’s largest unexploited copper project.
Market Summary
ASX – to open lower
US & UK/Europe – consolidated
ANZ -0.5%, NAB -0.5%, NWS -0.7%
AWC -1.2%, BHP -0.1%, RIO -0.3%, NEM 1.5%
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].
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: Market Fall on News of Stricter Russian …
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