– More disappointing data from Europe overnight hit stocks on the continent as the German IFO business expectations (98.3), climate (103.4) and current assessment (108.4) all missed the markets expectations. It is just another sign of the moribund nature of the Europen economy but somehow the Euro rallied and the US dollar is lower across the board.
– In the end the FTSE was 0.4% lower at 6,363, the DAX dropped 0.94% to 8,903 with the DAX banking index off 1.74%, while the CAC fell 0.77%. On the periphery Milanese stocks dropped a stunning 2.39% with the world’s oldest bank, Monte Paschi di Siena under intense pressure after failing the ECB stress tests. In Madrid stocks fell 1.4%.
-Stocks in the US shook off the early weakness on the back of the European lead eking out small gains by the close of play. The Dow finished up 0.07% at 16,818, the Nasdaq was 0.05% higher and the S&P 500 dipped 3 points to 1,962.
– Even with the recovery in US stocks traders on the local futures market took the SPI 200 lower overnight and the December contract is off 15 points to 5,423. Looking at sectors today we might see the miners under a little pressure again after coal, iron ore and gold dipped again.
– In Asia Shanghai fell again, down 0.53% yesterday to 2,290. Stocks on the exchange have now fallen 2.83% over the past 5 trading session while the Nikkei is up more than 5% in that period and was 0.64% higher once again yesterday. The divergence in the region is really interesting and likely rests in enduring stimulus in Japan from the BoJ and, so far at least, the lack of aggressive stimulus from the PBOC.
– On rates markets US 10 year Treasuries closed at 2.26% down 1 point, UK Gilts rallied 3 points to 2.21% while German Bunds closed at 0.83%.
– On currency markets the Yen is the big winner at 107.76 from a high of 108.37 yesterday but the Euro is higher as well reflecting a little bit of position squaring maybe in the run up to the FOMC meeting. Euro sits at 1.2705 while the pound is at 1.6123 and the Aussie dollar is at 0.8799.
– On commodities Dec iron ore was down 73 cents to $79 a tonne while Newcastle coal was 60 cents lower to $65.20 a tonne. Nymex crude was off 0.37% to $80.71 a barrel and gold is sitting at $1,225. Interestingly copper managed to rally to $3.06. The Ags fairly exploded though with soybeans were up 6.88%, corn 2.55% higher and wheat rose 1.16% after looking like it might have been breaking its recent uptrend.
On the data front there is nothing to be released in Australia today but Japanese retail trade is out while tonight we get German import prices. In the US durable goods is going to be huge as will consumer confidence and the Case Shiller house price index.
And now from CMC Markets’ Ric Spooner is today’s Stock of the Day
Twitter is down about 10% in aftermarket trading following release of its quarterly results. The main concern for markets appears to be the forecast for December quarter sales of $440-$450m compared to consensus expectations of $448.8.
This leaves scope for this quarter to be a bit below consensus or at best marginally above. For a stock trading above $40 but with earnings of 1c per share, narrow misses provide scope for plenty of disappointment.
The after-market price of $43.89 will see Twitter break conclusively below its trend line and 200 day moving average. From a chart point of view the support around $42.95 provided by the July peak and August low looks significant. A break below that level could imply more downside to come.
Ric Spooner, chief market analyst, CMC Markets
You can follow Ric on Twitter @ricspooner_CMC