Good morning. Here’s what you need to know.
– US stocks came under pressure last night, unable to stretch the recovery from last week’s lows beyond four days. The shooting in the Canadian capital Ottawa didn’t help sentiment, coming just a day after a hit and run of military personnel in Canada.
– But Nymex crude’s 2.46% fall to $80.46 and Boeing’s weakness suggests that the impact of the shooting was really at the margin. Traders just couldn’t find fresh catalysts to buy.
– So at the close, the Dow was down 154 points or 0.93% to 16,461, the Nasdaq fell 0.83% and the S&P 500 dipped 14 points to 1,927 for a loss of 0.74%.
– On the data front, the CPI in the US was a little bit firmer than expected – up 0.1% to 1.7% year-on-year – but this is still very low and suggests the Fed has plenty of time before embarking on tightening once QE ends.
– In Europe, traders exited play when the US market was still in the black, so it was a far better day for the region than what occurred in the US. The FTSE rose 0.43% to 6,400, the DAX was 0.6% higher to 8,940 and the CAC was up 24 points to 4,105 for a gain of 0.58%. Stocks in Milan and Madrid were up 1.09% and 0.96% respectively.
– Locally, the SPI 200 December contract fell 35 points overnight to 5,342, suggesting a weaker start to trade today.
– In Asia, the Nikkei’s volatility continued with another 2% plus move – the third in a row. The Nikkei rose 2.65% to 15,196 with the Yen back above 107 and following on from the solid lead in US stocks the previous night. The Hang Seng was up 1.37%. In Shanghai however, stocks dipped 0.54% to 2,327 and traders will be eyeing the preliminary measure of the October HSBC PMI which is due to be released at 12.45 AEDT today.
– Bonds were fairly quiet with only very small 1 or 2 point moves but on Currency markets the US dollar has a little of its mojo back with the euro down at 1.2641, sterling at 1.6045 and the USDJPY at 107.18.
– The Aussie dollar is also off the highs for the night at 0.8815 and sits at 0.8777 this morning but it has outperformed the other major currencies.
– On Commodities, there might be some good news for Australia’s listed coal miners today with Newcastle Coal rallying 1.86%. Iron ore was off 88 cents a tonne to $79.50 and Nymex crude down 2.55%. Gold dipped 0.8% to $1,241, silver lost 2.28% and copper dipped 0.43% to $3.01 a pound. On the Ags, wheat stayed strong after the previous day’s rally, up another 0.62% but corn fell 0.84% and soybeans gave back 1.6%.
On the data front today, the NAB’s quarterly business survey – the one with a larger number of respondents – is out but all eyes will be on the Chinese HSBC manufacturing PMI. Tonight there is a raft of preliminary manufacturing PMIs around the globe and retail sales in the UK are important. Also out are jobless claims in the US, which have been reflective of an improving economy lately.
And now from CMC Markets’ Michael McCarthy is today’s Stock of the Day
Surge in Sirtexn
Medical research is a difficult sector for investors. Results can be binary – both for investors and for the human beneficiaries of medical break throughs. If the new technology works, lives are saved and investors are rewarded. If it doesn’t work, the search goes on but investors get burned.
Investing in medical research can be like sitting at the roulette table and putting some of your portfolio on red or black.
That’s what makes this week’s action in Sirtex Medical (SRX) so curious. On Monday, Sirtex released an update on clinical trials. It appears at this early and limited stage that its SIR-Spheres technology is significantly reducing toxic side effects in cancer patients undergoing radiation treatment. Yet on Monday the share price did almost nothing. Tuesday, nothing.
Yesterday, a 5.6% surge to a new high, on increased trading volumes. This means SRX has doubled in share price this year. A slow burning rise in a medical research stock – definitely one to watch.
Michael McCarthy, chief market strategist, CMC Markets
You can follow Michael on Twitter @MMcCarthy_CMC