Welcome to Friday. Here’s your market rundown:
– US stocks continue to swoon overnight with the S&P 500 closing under 1,850 and looking a bit vulnerable. But in what seems to be a continuation of the ex-poste rationalisation of moves, it is difficult to find a cause other than our notion yesterday that stocks are finding the air a bit heady up near all-time highs on the S&P, with the Fed warning of a continuation of the taper and eventual rate rises.
– So it could be that the improvement of jobless claims which printed 311,000 from 325,000 expected and the third read of US GDP for Q4 2013 of 2.6% annualised simply reinforced the path that Fed Chair Janet Yellen articulated last week.
– At the close, the Dow fell 0.03%, the Nasdaq lost 0.54% and the S&P 500 lost 4 points to 1849 or 0.19%.
– In Europe, stocks were mixed. In the UK, the FTSE fell 0.26% after retail sales both during February and year-on-year blitzed expectations, printing 1.7% and 3.7% respectively. Maybe traders were worried about the BoE following the Fed but equally Glencore’s news they were closing the Ravensworth mine in the Hunter Valley weighed also. The DAX had a messy day but barely moved, up 0.03% on the day. The CAC fell 0.14% while in Madrid and Milan, stocks rose 0.57% and 0.31% respectively.
– Locally, on the ASX futures market overnight the SPI 200 June contract fell 4 points to 5337 bid.
– On interest rate markets, US 10’s continued their stealth rally, falling to 2.68%, which is counter to what might be weighing on stocks but part of the equity swoon will be cash flowing back into cash and fixed interest investments. Gilts fell 2 points to 2.68% and Bunds fell the same amount to 1.55%. Locally, the 10-year bond contract on the SFE rose 1.5 points to 95.92 (4.08%).
– On FX markets, the big change has been a recognition – finally, many traders say – that the Fed and ECB are on divergent paths, so the euro has pulled back to 1.3740. Sterling’s recovery continued, helped by the data and it is back above 1.66 at 1.6608. USD/JPY is largely unchanged at 102.11. The Aussie just keeps keeping on and in what seems a big old-style “dollar bloc” (AUD, CAD and NZD) move, the Aussie sits at 0.9259 this morning.
– On Commodity markets, with the fog of war receding and the US and UK economies seemingly doing okay, Gold fell heavily once again to $1291 this morning for its lowest close since early February and back below the 200-day moving average. Crude rallied 1.13% to $101.39 Bbl. Copper rose back to $3.01 lb while on the Ags, Corn rose 1.44%, Wheat rose 1.97% and Soybeans fell 0.24%.
On the data front, there is nothing out in Australia but in our time zone today we see the release of industrial and manufacturing data in Korea and consumer price data in Japan. In the UK, the GDP for Q4 is out while in Europe, business consumer confidence and business climate and German CPI is out. In the US, personal consumption and Uni of Michigan consumer sentiment is out.
Here is CMC’s Stock to watch today from Michael Mccarthy
Ten Network Holdings
After the market close on Wednesday, TEN announced Chairman Lachlan Murdoch is stepping down to accept positions as co-chair of 21st Century Fox and News Corp, alongside his father Rupert. Normally, the loss of a key executive would weigh on a stock – however TEN shares held firm yesterday on volumes close to triple the recent daily average.
There may be a couple of factors at play.
Technically, the stock is sitting at key support, with the RSI giving an oversold reading. Perhaps more importantly, Lachlan Murdoch currently holds around 8.8% of TEN shares through his private investment vehicle. There are reports speculating that the new Coalition government may relax cross-media ownership laws – potentially clearing the way for Fox to launch a bid for TEN. This is strictly theoretical at the moment, but may have been a factor behind the elevated market volumes after the announcement.