– Boom! What a night for US data. No wonder stocks rose to new highs and the euro lost ground against the US dollar. Durable goods (+0.8%), Case Shiller house prices (+1.24%), Markit flash services PMI (58.4) and the Conference Board’s consumer confidence (83) were all stronger than expected.
– The impact of this was that the S&P 500 made an all-time intraday high as well as a record closing high of 1912, up 11 points to 1,912. The Dow hit 16689 at one stage before closing up 70 points or 0.42% while the Nasdaq was 1.22% higher at 4,237.
– Expectations of easing in the EU from the ECB and the strength of US markets helped kick European shares to fresh multi-year highs. The FTSE rose 0.43% to 6,845, the DAX rose 0.49% to 9,941 but the CAC only rose 0.07% to 4,530. Milan, however, fell 0.42% while in Madrid stocks were 0.25%.
– Locally on ASX futures market overnight, the June SPI 200 contract is up 8 points to 5534 bid this morning.
– In Asia yesterday, stocks in Shanghai fell 0.32% to 2,035 with some worries about the fund-raising ability of small firms within the economy after new regulations weighing on trade. In Tokyo, however, stocks rallied 0.24% to 14,637 but this was 107 points off the high of the day at 14,744. Stocks in Hong Kong bounced around, closing down 0.08% at 22,944. Once again, there is nothing material on the data front in Asia today but US strength should resonate throughout the region.
– Strange as it may seem – indeed it is somewhat incongruous – bond prices rose (yields lower) in the US with US 10-year Treasuries back down at 2.52%. Likewise, Australian 3-year bonds futures are up 1 point to 97.18 (2.82%) while 10-year futures rose 2.5 points to 96.285 (3.715%)
– Turning to Currencies, euro didn’t rally terrible much at all yesterday and sits at 1.3632 this morning after the solid US data. But it did find support near 1.36 again overnight. The pound is off a bit against the USD at 1.6803 while USDJPY sits at 101.99. The Aussie is holding in well, buoyed by the sentiment attached to the solid rise in stocks.
– On Commodities, Gold is down 2% to $1,277 as the solid rise in stocks and what looks like the prospect of a reasonable resolution to the Ukraine situation combine to sap the strength of the bulls. Silver fell a similar amount to $19.08 while Nymex June Crude sits at $104.17 – still extremely high. Copper was up 1 cent to $3.19 lb while on the Ags it was carnage across the board with Corn, Wheat and Soybeans all down around 1.8%.
On the data front, today in Australia we get the release of the Westpac leading index on the economy and construction work done. Tonight we get German import prices, French consumer spending, German unemployment and then EU-wide consumer and business sentiment. In the US, it’s mortgage applications and the Redbook index.
And now from CMC Markets’ Ric Spooner is today’s Stock of the Day
The strong rally in CBA’s share price over recent months has helped support the overall index by offsetting the influence of more volatile resource stocks.
Since early April, CBA’s rally has formed into a neat trend channel that may be useful for traders. Short term traders looking for levels to take profits are likely to have an eye on the top line of this channel. If CBA continues to rally, the resistance now intersects between about $82.20 and $82.50 depending on how quickly we get there.
If the market does back off the top of the channel again, a pullback to the lower support line and 20 day moving average looks a definite possibility.
Ric Spooner, chief market analyst, CMC Markets
You can follow Ric on Twitter @ricspooner_CMC
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