17 Month High Made On Dow
March 18th, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10,733.67 | 47.69 | 0.4% |
| NASDAQ | 2,389.09 | 11.08 | 0.5% |
| S P 500 | 1,166.21 | 6.75 | 0.6% |
| FTSE 100 | 5,644.63 | 39.15 | 0.7% |
| Nikkei 225 | 10,846.98 | 125.27 | 1.2% |
| ASX 200 | 4,863.40 | 10.2 | 0.2% |
| COMEX Gold - Dec 09 | 1,124.80 | 2.3 | 0.2% |
| COMEX Silver - Sep 09 | 17.455 | 0.101 | 0.6% |
| COMEX Copper - Sep 09 | 341.9 | 5.4 | 1.6% |
| WTI Spot | 82.97 | 1.04 | 1.3% |
| AUD-USD | 0.9236 | 0.005 | 0.5% |
| Aluminium | 2,213.50 | 5.5 | 0.2% |
| Copper | 7,341.50 | 11.5 | 0.2% |
| Lead | 2,194.50 | 9.5 | 0.4% |
| Nickel | 22,000.00 | 700 | 3.3% |
| Tin | 17,510.00 | 10 | 0.1% |
| Zinc | 2,278.00 | 24 | 1.1% |
Our market is set to open stronger this morning with SPI futures up 23 points as the Dow broke resistance level at 10738 – making a 17 month high. It got as high as 10768 after selling off slightly late in the trading session finishing at 10732. Commodities are also stronger as US producer prices underscored the Federal Reserve’s assessment that inflation is not a threat to low interest rates. The S&P 500 and the Stoxx Europe 600 Index also made new highs
A positive sign is that a benchmark gauge of corporate credit risk in the U.S. fell to the lowest in more than two months, led by American International Group Inc. as the insurer sought to improve liquidity. A drop in producer prices signals supports that the US recovery isn’t strong enough to justify higher borrowing costs so Fed funds rate is set to remain at zero. This supports the sentiment in gold as it has rose on the expectation that it would remain unchanged. Gold is taking a breather after its last run finishing only slightly up. Some other positive news offshore is the Bank of Japan doubled a lending program aimed at stoking credit growth to $222 billion, while investor confidence was boosted in Europe as earnings from UniCredit SpA and Inditex SA exceeded predictions.
The Australian index is trading above long term moving averages on a weekly chart, this being the third time it is testing resistance levels at around 4940. Only this time, the lead up to this level has been lead by a stronger trend. The fact that the market has been range bound over the last few months suggest fair value and support being established at moving average at 4720. Should we see a break of 4900 the next test would be 4971, followed of course by the psychological resistance of 5000. Over the last two trading sessions, strength is seen from buyers as each hourly bar has been above the 20 period moving average. The fact that the Dow has now made a new high should see our market follow suit. The first stage of economic recoveries traditionally see gains in cyclical high beta stocks, the second stage now could see a change to high quality growth stocks as the cyclicals take a breather. This could see stocks such as AIO, CSL and NWS see gains
over the next few months.
In company news, BHP says the closure of its Hay Point coal export terminal in Queensland is starting to affect production at some coal mines and rail operations. The port was closed on Thursday due to severe weather conditions. David Jones Ltd (ASX:DJS) has booked a record 10.2% rise in first half earnings and reaffirmed profit growth guidance of between five and 10% for this year and next. The department store chain has reported a profit of $100.5 million for the 26 weeks to January 23, up from $91.2 million for the same period the year before.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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