Dow Up 225, Eyes On Employment Data Tonight In The US
June 3rd, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10,249.54 | 225.52 | 2.2% |
| NASDAQ | 2,281.07 | 58.74 | 2.6% |
| S P 500 | 1,098.38 | 27.67 | 2.6% |
| FTSE 100 | 5,151.32 | -11.98 | -0.2% |
| Nikkei 225 | 9,603.24 | -108.59 | -1.1% |
| ASX 200 | 4,413.10 | -16.6 | -0.4% |
| COMEX Gold - Dec 09 | 1,222.60 | -4.3 | -0.4% |
| COMEX Silver - Sep 09 | 18.315 | -0.236 | -1.3% |
| COMEX Copper - Sep 09 | 304.05 | -2.25 | -0.7% |
| WTI Spot | 72.86 | 0.28 | 0.4% |
| AUD-USD | 0.8306 | -0.0158 | -1.9% |
| Aluminium | 1,954.00 | 1 | 0.1% |
| Copper | 6,605.00 | -110 | -1.6% |
| Lead | 1,709.50 | -41.5 | -2.4% |
| Nickel | 19,880.00 | -625.00 | -3.0% |
| Tin | 17,650.00 | 220 | 1.3% |
| Zinc | 1,791.00 | -30 | -1.6% |
The Dow was up 225 points overnight on the back of home sales data which rose to the highest level since October. Signs of improving credit markets were reported by Bank of America and Wells Fargo & Co. Gold closed slightly lower on a profit taking pull back. Risk appetite increased slightly in US equities which added to downside pressure on gold. Gold seems to have found some resistance at around $1200 and may find continued support by safe haven buying amid the European Union’s Debt crisis that has yet to fully play out.
On further downgrades to European Union countries’ sovereign debt ratings, we could see gold break above the $1200 level. A further boost to gold on the geopolitical front, is the North Korea-South Korea tensions and the weekend Israeli raid on a ship carrying food to the Gaza region. The yen slid versus 15 major currencies following Japanese Prime Minister Yukio Hatoyama’s resignation.
Our market looks to open 77 points on the upside as indicated by the SPI futures. Our big miners look to open firmer with ADRs for BHP and RIO up in London trading, AUD equivalents are $38.51 and $68.84 respectively. Whilst we have time on our side for June expiry, it may be wise to lock in premium from selling calls whilst the market has pulled back up from lows made last week. Today, the ASX S&P200 should cross above the 20 day moving average at 4427 with the next level of resistance being the last high 4488 which we could see it break this week. It will be interesting to see if we can close above 4488 as this was the lower band of the trading range we saw over the last 6 months preceding the May selloff. If the market does this on good volume we could see it trading back within this band.
What could significantly boost the market is the employment report out tonight in the US. There are two employment reports - the ADP's report due Thursday and the U.S. employment report on Friday – with consensus to be strong. The national unemployment rate is expected to have fallen to 9.8% from 9.9% in May, with average hourly earnings increasing 0.1%, according to a census forecast.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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