– Concerns over China drove Asian and European stocks sharply lower but with a bit of a data vacuum overnight traders in the US managed to shrug off the negativity with prices recovering their early weakness and at the close the Dow was down 0.07% while the S&P 500 was flat at 1,868. The Nasdaq was however in the black rising 0.37%.
– In Europe the FTSE fell 0.97%, the DAX fell 1.28% and the CAC dropped 1.01%. Stocks in Milan and madrid were 0.25% and 0.92% lower respectively.
– Locally on the ASX futures trade overnight the march SPI 200 contract is up 2 points but well off yesterdays lows at 5372 bid.
– On global FX markets the US dollar lost some ground with the Euro and Yen stronger and the Aussie recoverying very well from the weakness yesterday that took it down to 0.8822. This morning Euro is up 0.33% to 1.3905, GBP is flat at 1.6618 and USDJPY is down 0.30% to 102.69. Incredibly the Aussie is also up on the day at 0.8988 for a gain of 0.14%.
– On commodities copper for March deliver lost 0.31% to $3.02 lb which together with the fall of 1.84% in Nymex Crude for march to $98.14 (on a huge 6 million barrell build) suggests the US and global growth outlook continues to be rerated. Gold rallied $20 or 1.51% to $1366 while on the Ags corn rallied 1.31%, wheat roared 3.73% but Soybeans sold off 2.11%. Continuing the Ag volatility Oats rallied 4.7% and have made up all the ground lost earlier in the week.
On the data front today Austalia’s biggest number for the month will be released at 11.30 when the ABS announced the employment report. The market is expecting some payback after the last 2 month’s fall with an expectation of a rise of 18,000 jobs and the unemployment rate stable at 6%.
Chinese retail sales and industrial production might overshadow this data a little when released and this afternoon and then tonight’s inflation data in the EU is likely to focus traders about what is happening with deflation in the Eurozone. In the US its jobless claims, new housing price index and very importantly retail sales.
Now here is Ric Spooner from CMC Markets Stock to Watch today
JB Hi Fi and today’s unemployment report
Investors in retail stocks joined the throng on the wall of worry yesterday. Another weak Consumer Confidence read cast doubt on the longevity of the revival in retail sales. The Westpac Confidence survey revealed consumers to be understandably jittery in the face of relentless news on job cuts. With this in mind, this morning’s unemployment report has the potential to again impact sentiment towards retail stocks.
JB Hi Fi completed a double bottom formation on Friday, breaking above resistance and the 200 day moving average at the same time. This followed Thursday’s news that January retail sales grew 1.2%.
Yesterday’s change in sentiment saw price retreat into the body of the double bottom pattern. From here a break below the previous low at $17.49 would represent a failure of this pattern. However, this pullback might yet prove to be no more than the classic “re test” of support.
“Re test” buyers could now be interested in the zone around the 20 day moving average as a possible support area
Ric Spooner, Chief Market Analyst CMC Markets
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