Good morning. Here’s what you need to know.
– The S&P 500 closed over 2000 for the first time ever – just. Settling at 2000.02 after a new intraday high of 2005.04, stocks were buoyed by both more ebullience from European stocks markets on the prospect of QE from the ECB together with some solid US economic data.
– Durable goods orders surged 22.6% in July, largely on the back of some large Boeing orders, but non-defence capital goods were actually down 0.5%. The Case Shiller house price index was 0.2% with all cities lower than the previous month’s annual rate for the first time since 2008. But it was the huge jump in the Conference Board’s consumer confidence index to 92.4 this month which was the big news. This is the best result since October 2007, just after the collapse of Lehman Brothers.
– So at the close, as well as S&P 2000, we saw had the Dow up 0.18% to 17,107 and the Nasdaq up 0.3% to 4,571.
– In Europe, it’s all about free money and ECB QE. The FTSE rose 0.7% to 6,823, the DAX was 0.82% higher to 9,588 while the CAC was up 1.17% to 4,393. In Milan and Madrid, stocks rose 1.33% and 1.28% respectively.
– Locally, in overnight futures trade the SPI 200 September contract was up 8 points to 5605. The miners will have a little bit of relief given iron ore lifted 29 cents a tonne overnight to $89.54, but the price action on the local market hasn’t been very constructive the past couple of days, so the outlook is a little uncertain.
– In Asia yesterday, it was a poor day for stocks with the Nikkei down 0.59% to 15,521 and the Hang Seng off 0.37% to 25,075. Stocks in Shanghai are perilously close to big break of 2200 with a fall of 1% yesterday to 2,207.
– On Bond markets, US 10s closed at 2.4%, German 10s finished a point higher at 0.94% and UK Gilts played catch-up after their day off for the late Summer bank holiday (which I forgot to mention yesterday) rallying 7 points to 2.34%. The rally in the periphery continued as well, with Italian bonds down 4 pips to 2.42% and Spanish 10s down another 5 pips to 2.18%.
– On Currency markets, the focus on QE is keeping the euro under pressure with the brief foray above 1.32 giving way for weakness once again. It’s sitting at 1.31675. USDJPY is at 104.06, sterling is at 1.6540 and the Aussie remains becalmed at 0.9306.
– On Commodity markets, Iron Ore lifted a little as noted above. Newcastle September Coal was up 35 cents to $70 a tonne. Nymex Crude was up 45 cents a barrel to $93.80 while Gold is at $1279 and Silver is $19.41 an ounce. Copper is at $3.20 as its recent strength persists. On the Ags, Soybeans are still ripping higher up 2.62% while Corn rose 0.9% and Wheat fell 0.18%.
– On the data front, we get construction work done in Australia today before the Gfk consumer confidence and trade data in Germany. In the US, it’s quiet with only the MBA mortgage applications out tonight.
And now from CMC Markets’ Ric Spooner is today’s Stock of the Day
Investors have pushed OSH shares higher since last week’s solid profit result.
Still, everything has a price and OSH shares look to have arrived at a chart resistance zone. If this is respected with a trend peak close to current levels, a move lower could be on the cards. This resistance is made up of:
• The top line of a trend channel
• The 78.6% Fibonacci retracement level
• A projection that the swing up from “b” to “c” will be about the same size as (100% of) the first leg of the correction up to “a”. This is common behaviour for “abc” corrections
Of course, none of this applies if there is no trend peak around current levels.
Ric Spooner, chief market analyst, CMC Markets
You can follow Ric on Twitter @ricspooner_CMC
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