* U.S. stock markets ease back from a four day rally with selling late in the session, as traders take profits, ahead of the release of GDP figures.
* European stocks held on to recent gains and are trading at six year highs.
* Asian stock markets edged higher yesterday and remain around six year highs, but are expected to ease today following price action from the US and Europe.
* Commodities prices lower, Gold prices slumped to $US1,259, while crude-oil fell to just above $US102. Copper jumped eased to US3.173c. The gold price continued lower overnight, as the US 10 year yield plunged to 2.44%.
The Australian share market closed higher yesterday, just shy of new six-year high ,with the ASX200 up 0.3% at 5527, but trading volumes remain thin, indicating caution as the market tests new highs. Housing affordability is at the most favourable levels in 12 years a private survey has revealed, due to low interest rates, but the builders fail to gain traction again. OZ Minerals and Sandfire Resources added over 5.5%, Iluka Resources rose 6% after reporting 2014 sales are expected to exceed production. The banks posted steady gains for the session, while Materials were mostly stronger, particularly to nickle and copper stocks, but the gold stocks slumped along with the gold price. Investors will be keenly awaiting capital expenditure data, due out today. ALS was a standout performer again today, adding another 8%.
The SPI 200 futures are down -0.2% at 5524, giving a negative lead for the ASX market today as it hovers near six year highs. The Aussie Dollar eased to US92.3c. The 5520 level is key near-term for the ASX200, as markets across Europe and the US eased. Remember it is equities options expiry today and there will be a report on quarterly Private Capital Expenditure out at 11:30am.
Aussie Copper stocks are finding some love as the Copper price bounces from key level.
US Markets
U.S. stock markets ease back from a four day rally with selling late in the session, as traders take profits with markets trading at record levels ahead of the release of GDP figures.
The three benchmark indexes all finished around -0.2% lower, with the Nasdaq and the Russell 2000 outperforming again. The S&P500 and Dow Jones eased back from their new all-time highs, after having traded within a relatively tight 5% range over the past few months. Half of the ten S&P500 sectors finished lower, with gains led by the Utilities and Telecom sectors up 0.8%, The Energy sector rose 0.2%, but falls were seen in the Tech and Healthcare sectors down -0.3%, while the rest of the sectors fell 0.1%.
Traders took the opportunity to take some profits off the table ahead of tomorrow’s GDP figures which are expected to show the US economy contracted around -0.5% last quarter. If you are confused over what is happening in the markets you are not alone. The President of Goldman Sachs Gary Cohn commented that the low volatility and low interest rates which are holding in very tight ranges are resulting in “abnormal” trading conditions. The VIX remains at its lowest levels since last in 14-months indicating investors are comfortable with the state of the current market. The VIX has traded this low one once in the past seven years, while US 10 year yields continue to fall.
For the session Dow Jones closed down -0.3% at 16,633, the S&P500 closed down -0.1% at 1,909 and the NASDAQ closed down -0.3% at 4,225, while on 10-year Treasury notes slumped to 2.44%.
European Markets
European stocks held on to recent gains and are trading at six year highs. The Stoxx Europe 600 Index eased -0.1% for the session, after recording its longest winning streak since April. The index has risen nearly 9% from its February lows and is up nearly 2% for May. Equites have been supported by the recent comment from the ECB President who said that policy makers are ready to take action against low inflation.
The German market held at new record levels, even as unemployment unexpectedly rose for the first time in six months and consumer confidence fell this month on growth concerns in the eurozone as the region grew just 0.2% in the last quarter. The index is now up over 7.3% above its April lows. The London market held and is trading near 14 year highs, after rising over 6% from its February lows.
For the session the German DAX 30 closed flat at 9,939, the UK the FTSE 100 closed up 0.1% at 6,851, the French CAC 40 closed up 0.1% at 4,531, while the Spanish market close up 0.4% at 10,757.
Asian Markets
Asian stock markets edged higher yesterday and remain around six year highs, on thin volumes, but are expected to ease today following price action from the US and Europe.
The MSCI Asia Pacific Index rose 0.5% for the session, reaching its highest level since last November as two stocks rose for every loser. The index has risen over 8.5% from its February lows. In Japan the market held around seven week highs, as construction companies led gains on speculation that the government may extend tax benefits for investment in city development.
The Chinese market edged back towards two week highs, after Chinese money market rates eased on the back of the President Li signalling that there will be more policy easing designed to stabilise the slowing economy.
The Hong Kong market rose just above the key 23,000 level, as the industrial and consumer sectors led the way, on the bcd of improving company profits for industrial corporations up 10% in the four months to April, on year.
For the session the Shenzhen Composite closed up 1.0% at 2,169, the Hong Kong Hang Seng closed up 0.6% at 23,080, and the Japanese Nikkei closed up 0.2% at 14,670 while the South Korean KOSPI closed up 0.4% at 2,017.
Commodities
The Dollar Index edged higher at 80.56 on a lower Euro, and the Aussie Dollar eased to US92.3c. Commodities prices lower.
Overnight the COMEX WTI Crude for JUN14 delivery closed down -1.3% at $US102.70, the COMEX Copper for JUN14 delivery closed down -0.1% at 3.173, the COMEX Gold for JUN14 delivery closed down -0.5% at $US1,259.70.
ASX News
ALL – Aristocrat Leisure the poker machine maker says it expects strong annual profit growth after raising its first half earnings 9%.
ALZ – Australand the property developer is considering a sweetened $2.5 billion ($4.35 per share) takeover bid from rival Stockland.
QAN – Qantas will close its call centres in Brisbane and Melbourne with the loss of about 450 jobs, as the airline moves ahead with a $2 billion transformation program.
RHC – Ramsay Health Care has appointed Michael Siddle as its new chairman following the death of the company’s founder Paul Ramsay.
RIO – Rio Tinto has appointed BP executive Alfredo Barrios to run its aluminium business.
WES – Coles has opened up a new front in its battle with Woolworths, launching an overhaul of its liquor business, Coles operates 820 bottle shops under the Liquorland, First Choice and Vintage Cellars brands where its liquor sales have fallen in the first nine months of this financial year. Wesfarmers says that its coal business will continue to struggle, but there are signs that metallurgical coal is nering a bottom.
WOW – Woolworths may sell its chain of hotels and liquor stores. Woolworths recently reported sales growth in its Dan Murphy’s and BWS businesses.
Market Summary
ASX –open lower
US & UK/Europe – eased
US ADRs – Broadly lower!…
ANZ -0.3%, NAB -0.2%, NWS -0.9%
AWC -1.2%, BHP -1.3%, RIO -2.9%, NEM -0.9%
By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.