Stock Market Analysis: Traders See Corporate Earnings Trump …
* US stock markets surged on the open and held on to those gains through to the close, as once again geopolitics took a back seat to the news of better US corporate earnings.
* European stock markets rebounded overnight, snapping a three session losing streak, as traders set aside their concerns over the downed Malaysian flight and the Ukraine and escalating conflict in the Gaza Strip, focusing on earnings and M&A.
* Asian stock markets rose again yesterday, trading around their highest levels in six years and the overseas market have given a positive lead for today.
* Commodities prices eased. Gold prices eased to $US1,308, while crude-oil held above $US104. Copper rose to US3.204c.
The Australian sharemarket closed slightly higher again yesterday, with the ASX200 up 0.1% at 5543 in light trading. The Materials and utilites sectors rose around 0.4% for the session offsetting the losses in the Consumer Staples sector down -0.5% which were the worst performing for the day, while Financials were mixed. Highlights included Western Areas up 4% on the back of the release of its June quarter production report, while LNG surged another 10%. Uranium stocks have had a good move in recent sessions.
Today the focus turns to Q2 CPI data expected to come in at 3%, which is key for the RBA interest rate outlook. BHP report production figures today and should shed some light on iron ore and coal supply and margins.
The SPI 200 futures rose 0.2% to 5512, giving a positive lead for the ASX market today, as geopolitical concerns again took a back seat to the US the corporate earnings season and M&A activity continues. The Australian dollar rose to US93.9c. The 5560 level is key near-term for the ASX200, as the markets across Europe and the US rebounded.
US Markets
US stock markets surged on the open and held on to those gains through to the close, as once again geopolitics took a back seat to the news of better US corporate earnings.
The three benchmark indexes all finished 0.5% higher for the session. The Dow Jones and the S&P500 are back at record levels, with trading volumes improving. The S&P500 is up 7.3% for the year. Eight of the ten S&P500 sectors finished higher, led by gains in the Healthcare,Tech and Energy all up 0.8%, Discretionary, Industrials and Financials sectors all rose around 0.4%, while the Staples sector fell -0.2%.
The US earnings seasons continues as focus now turns to the industrials and tech majors this week. Thirty six S&P500 stocks reported overnight (including Coke, McDonald’s, Apple and Microsoft) and there are a total of 145 stocks to report this week. Of the S&P500 companies that have reported 76% have beaten on profits, while 70% beat sales forecast. 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.
In economic news the Commerce Department reported US CPI rose 0.3% in June, in line with forecasts and giving the Fed some breathing room over having to increase interest rates. Existing home sales rose in June to their highest level in eight months.
For the session Dow Jones closed up 0.4% at 17,113, the S&P500 closed up 0.5% at 1,983 and the NASDAQ closed rose 0.7% at 4,456, while on 10-year Treasury notes found support at 2.46%.
European Markets
European stock markets rebounded overnight, snapping a three session losing streak, as traders set aside their concerns over the downed Malaysian flight and the Ukraine and escalating conflict in the Gaza Strip, focusing on earnings and M&A.
The Stoxx Europe 600 Index closed up 1.3% for the session, recouping most of the losses of the past few sessions. Trading volumes were 20% above the monthly average. Across the region the miners jumped 2.4% for their best performance in the industry groups. The rebound of stocks overnight is symptomatic of the recent retracement being due to a lack of buying rather than panic selling over the geopolitical concerns over Gaza and the Ukraine.
Traders sentiment have accepted the news of the imposition of Russian sanctions from the EU and the US and the calls for more stricter sanctions to be implemented and speculated that global growth will not be impacted significantly going forward.
The Russian market rose for the first time in a week. European Union foreign ministers meet to discuss whether to extend penalties against Russia amid outrage over the downing of Malaysia Airlines flight MH17 over Ukraine.
The London market rose on the back of the miners. The German market rebounded.
For the session the German DAX 30 closed up 1.3% at 9,734, the UK the FTSE 100 closed up 1.0% at 6,795, the French CAC 40 closed up 1.5% at 4,369, while the Spanish market closed up 1.6% at 10,648.
Asian Markets
Asian stock markets rose again yesterday, trading around their highest levels in six years and the overseas market have given a positive lead for today.
The MSCI Asia Pacific Index rose 0.6% for the session, its highest levels in six years. Across the region gainers outnumbers losers by two to one, as all ten of the industry groups finished higher for the session.
The Japanese market played catchup after a holiday, rising as trading volumes were up 10% above the monthly average. The BoJ is calling on the government to introduce measure to improve Japanese growth.
The Chinese market built on the gains from last week, as traders went bargain hunting, ahead of corporate earnings which continues to the end of August. There are eleven companies due to list this week. The Hong Kong markets finished higher.
For the session the Shenzhen Composite rose 1.2% at 2,192, the Hong Kong Hang Seng closed up 1.7% at 23,782, and the Japanese Nikkei closed up 0.8% at 15,343, while the South Korean KOSPI closed up 0.5% at 2,028.
Commodities
The Dollar Index edged higher to 80.78 on a lower Euro, and the Aussie Dollar held at US93.9c, edging towards from its highest level since November. Commodities prices eased.
Overnight the COMEX WTI Crude for AUG14 delivery eased -0.2% at $US104.40, the COMEX Copper for AUG14 delivery closed up 0.2% to 3.204, the COMEX Gold for AUG14 delivery close down -0.5% at $US1,308.50.
ASX News
AIO – Asciano the rail freight and ports operator Asciano has confirmed that it is in talks over a possible sale of a non-controlling interest in its terminal and logistics business.
ARI – Arrium the steel and mining group has accepted discounted prices on its iron ore shipments due to additional supply and tightening credit growth in China.
AZZ – Antares Energy the oil and gas company which is the target of a takeover bid, have met in Perth to vote on a proposal board shakeup.
KRS – Kresta Australia’s biggest blind and curtain maker, is urging shareholders to accept a $34.5 million takeover offer from China.
NCM – Newcrest Australia’s largest gold miner is preparing to fight a class action by shareholders hurt by a massive financial writedown in 2013.
OSH – Oil Search has confirmed the ramp up of a massive liquefied natural gas project in Papua New Guinea has fuelled a surge in Oil Search’s quarterly revenue, double the previous quarter.
SPL – A revolutionary condom featuring a gel that attacks sexually transmitted viruses has been given the go ahead for sale in Australia.
WSA – Western Areas says that FY14-End Cash Balance rose to $230.5M, $55M, while FY14 Cash Cost $2.50/Lb, 7.4% below guidance.
Market Summary
ASX – to open higher
US & UK/Europe – rebounded
ANZ 0.4%, NAB 0.5%, NWS -0.2%
AWC 4.1%, BHP 1.7%, RIO 1.9%, NEM 0.2%
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].
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: Traders See Corporate Earnings Trump …
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