Stock Market Analysis: Selling Eases as Tensions at the Ukraine …
* US stock markets rose from the open on Friday, recording their biggest single session gain in five months, as tensions on the Ukraine/Russia borer eased.
* European stock markets have held at their lowest levels for over three months, recording their first consecutive weekly losses in over six months. After market close the futures have risen as the tensions at the Ukraine-Russia borders are easing.
* Asian stock markets fell to a seven week low last week, as the US struck at Iraqi militants. Chinese trade data improved.
* Commodities prices eased. Gold prices eased to $US1,311, while crude-oil held at $US97. Copper edged held at US3.173c.
The Australian stock market sold off heavily last week with the ASX200 down another -1.3% to 5,435 on Friday, after news that the unemployment rate up at 6.4% its highest level since August 2002, when forecasts had been for it to remain steady at 6%.
Local investors are looking look ahead to company earnings season which starts in earnest this week. Reporting Next Week:
Monday: Bendigo Bank, 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
The SPI 200 futures are up 0.7% to 5413, giving a positive lead for the ASX market today, as the the US found some support and EU markets fell again. The 5465 level will be key for the ASX200 today. The Australian dollar held at US92.8c.
The Dow Jones Index heavily oversold, bouncing off its 200 day support
US Markets
US stock markets rose from the open on Friday, recording their biggest single session gain in five months, as tensions on the Ukraine/Russia borer eased.
The three benchmark indexes all finished up around 1%, closing on their highs as traders did not want to stay short ahead of the weekend. The S&P500 rebounded from being heavily oversold and erased all of its losses of the past four session and the major indexes tentatively recovered off key levels, with the S&P500 off its 100 day and the DOW Jones off its 200 day supports.
All ten S&P500 sectors finished in the green, the Utilities sector led up 2.0%, while Consumer, Industrials and Energy sectors all rose over 1.4%. The VIX eased -5% to 15.8. Eighty percent of the S&P500 stocks have still closed below their 50 day support levels.
The US earnings season continues with News Corp and CBS reporting. Focus turns to the retail sector earnings this week. Of the S&P500 companies that have reported 75% have beaten on profits, 64% beat on revenues, while 66% beat sales forecast.
For the session Dow Jones closed up 1.1% at 16,553, the S&P500 up 1.2% at 1,931 and the NASDAQ closed up 0.8% at 4,370, while the 10-year Treasuries rose 2.42%, off a twelve month low.
European Markets
European stock markets have held at their lowest levels for over three months, recording their first consecutive weekly losses in over six months. After market close the futures have risen as the tensions at the Ukraine-Russia borders are easing.
The Stoxx Europe 600 Index fell another -0.6% for the session, for a weekly decline of -2.1% (down -7% from its June peak) and closing at its lowest level since mid-March. Traders are concerned over the military intervention of the US in Northern Iraq, in a targeted and limited military response to the humanitarian crisis in that region. Also of concern is Russia’s move to ban billions of dollars of food imports from the US and other nations in response to the EU sanctions imposed against Russia.
The ECB has held its benchmark rate at 0.15%, but stocks have seen selling after the ECB President said the ECB is positioning itself to implement a European version of QE by the end of the year, in reaction to the heightened geopolitical risks, Russia and the financial problems in Portugal and Italy and the prospect of a faltering global economic recovery.
The German market retreated again and is down -11% since its July peak. In earnings of the Stoxx Europe 600 that have reported 57% beat on profits and 51% beat on sales, according Bloomberg. The London markets fell to new three week lows.
For the session the German DAX 30 closed down -0.3% at 9,009, the UK the FTSE 100 closed down -0.5% at 6,567, the French CAC 40 closed down -0.1% at 4,147, while the Spanish market closed up 0.3% at 10,105.
Asian Markets
Asian stock markets fell to a seven week low last week, as the US struck at Iraqi militants. Chinese trade data improved.
The MSCI Asia Pacific Index fell another -1.4%, in broad selling and its lowest level since the end of June, falling -2.5% last week. 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 recovered capping a four week winning streak (its longest since December) and snapping a three session losing streak, as export growth accelerated. Chinese trade data for July showed export growth surged 14.% (on year) and the trade balance jumped to a record high in July. Consumer stocks led the gains as monetary easing is showing signs of improving economic activity.
The Japanese market resumed its four session losing streak falling to its lowest close since June, after Nikon and Melco disappointed. The BoJ maintained its record stimulus at YEN65 trillion annually, after recent export and production reading have confirmed weakness in the economy. The Hong Kong markets fell -1.4% for the week, again backing off its highest level since mid-November 2010 as the market remains vulnerable to further downside.
For the session the Shenzhen Composite up 0.2% at 2,331, the Hong Kong Hang Seng closed down -0.2% at 24,331, and the Japanese Nikkei closed down -3.0% at 14,778, while the South Korean KOSPI closed down -1.1% at 2,031.
Commodities
The Dollar Index edged eased to 81.39 (holding around its highest level for a year) on a higher Euro, and the Aussie Dollar held at US92.8c. Commodities prices eased.
Overnight the NYMEX WTI Crude delivery up 0.3% to $US97.60, the COMEX Copper closed down -0.1% to 3.173, the COMEX Gold closed down -0.1% at $US1,311.00.
ASX News
AAD – Ardent Leisure the theme park and Goodlife gym owner has raised $50 million and is more than doubling its WA fitness clubs by buying Fitness First sites in the state’s capital.
ALZ – Singapore’s Frasers Centrepoint is struggling to get shareholders of Australand Property Group on side, with just hours to go until its takeover offer expires.
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.
CWN – Crown has reported a fall in its earnings at its JV in Macau.
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.
ENV – Envestra looks set to be taken over by a major Hong Kong developer after the Australian gas distributor’s biggest shareholder backed a $2.4 billion takeover deal.
FXL – FlexiGroup the financial services company shares rose despite reporting a drop in profit for fiscal 2014.
NWS – Newscorp says its titles have suffered an -18% drop in revenues.
RIO – Rio Tinto has more than doubled its half year net profit to $US4.4 billion.
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.
Market Summary
ASX – to open higher
US & UK/Europe – US higher
ANZ -0.6%, NAB -0.6%, NWS -1.5%
AWC -0.7%, BHP 0.5%, RIO +0.7%, NEM +0.8%
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: Selling Eases as Tensions at the Ukraine …
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