– The massive beats by Apple and Facebook after hours render the negative price action in US markets a little moot this morning but given the specificity of these results and the lack of follow-through into the broader market, it’s possible that these will prove more stock-specific than market-wide. Either way though, both are solid results and you can read more on Facebook here and Apple here.
– Already the local market had ignored the weakness in the US with the SPI 200 higher in overnight futures trade and the June contract is currently pointing to a better start for the ASX, up 11 points to 5520 bid.
– On the data front, the Chinese Flash PMI data was weaker than expected yesterday, with similar results in France and the US but Germany and the EU slightly better than expected. US new home sales tanked, down 14.5% month-on-month.
– So in the end the Dow was off slightly at 16,502, down 0.07%, the Nasdaq fell 0.83% to 4,127 while the S&P 500 was down 5 points of 0.24% to 1,875.
– In Europe, comments from ECB Council member Nowotny that the ECB wouldn’t rule out QE sounded a lot like softening up, but markets couldn’t get a lift and gave back the positivity of the previous day’s trade. At the close, the FTSE edged 0.1% lower to 6,675, the DAX fell 0.58% to 9,544 while the CAC lost 0.74% to 4,451. In Milan, stocks cratered a little, down 1.18% while in Madrid they fell just 0.13%.
– Also interesting in Europe was the return to bond markets with 750 million euro of 10-year bonds, which was oversubscribed with a bid ratio of around 3.5 times. Equally interesting was the failure of a Russian bond auction which was cancelled.
– Turning to Asia today and it looks likely to be another mixed bag after the Nikkei rose 1.09%. The leading index didn’t fall as far as some thought while BoJ governor Kuroda noted he thought inflation would print higher than the current BoJ projection. In China, the Shanghai exchange was down a little after the lower-than-expected outcome of the HSBC Flash PMI but the fall of 0.28% wasn’t overly material. Today’s focus is likely to be the Chinese leading index which is due out at midday.
– On Currency markets, the Aussie was the big mover, down around a cent after the lower CPI and Chinese PMI combined to knock the bulls for six. It is coming back a little in early Asian trade this morning at 0.9285. Elsewhere on Forex markets, Nowotny’s comments hardly dented euro which is still atop 1.38 at 1.3816 this morning. Sterling fell after the 9-0 vote to keep monetary policy as released with the BoE minutes, while USDJPY is at 102.46.
– Turning to Commodities, there was a huge build in stocks last week which has taken Crude lower but I’ve also had a change of contract so the move is so pronounced with may Nymex crude only down 0.21% to $101.54. Technically, $100.70/80 is the key to the next move given it is trendline support. Gold hasn’t done much, sitting at $1284 oz while Copper is at $3.07 lb. On the Ags it was typical price action with Corn up 1.36%, Wheat up just 0.52% while Soybeans fell 0.69%.
On the data front today, there is little in Asia other than the Chinese Central Bank’s leading index but German IFO tonight will be important, as will durable goods in the US along with the usual jobless claims data. The Kansas fed manufacturing index is also out.
And now from CMC Markets’ Ric Spooner is today’s Stock of the Day
The latest rally has extended to test the 200-day moving average for the 4th time since September last year. Investors will be hoping that this time they will be rewarded with a decisive move past the average confirming take off. For chartists the 2nd move through the previous major low at $1.18 looks encouraging.
Ric Spooner, chief market analyst, CMC Markets
You can follow Ric on Twitter @ricspooner_CMC