Dow down 40pts, Bernanke states "Recovery will be modestly paced"
June 10th, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 9,899.25 | -40.73 | -0.4% |
| NASDAQ | 2,158.85 | -11.72 | -0.5% |
| S P 500 | 1,055.69 | -6.31 | -0.6% |
| FTSE 100 | 5,085.86 | 57.71 | 1.1% |
| Nikkei 225 | 9,439.13 | -98.81 | -1.0% |
| ASX 200 | 4,385.10 | 4.1 | 0.1% |
| COMEX Gold - Dec 09 | 1,229.90 | -15.7 | -1.3% |
| COMEX Silver - Sep 09 | 18.189 | -0.288 | -1.6% |
| COMEX Copper - Sep 09 | 285 | 7.05 | 2.5% |
| WTI Spot | 74.38 | 2.39 | 3.3% |
| AUD-USD | 0.8281 | 0.0002 | 0.0% |
| Aluminium | 1,850.50 | 22 | 1.2% |
| Copper | 6,091.00 | -66 | -1.1% |
| Lead | 1,562.50 | 4 | 0.3% |
| Nickel | 17,955.00 | -95 | -0.5% |
| Tin | 15,830.00 | -320 | -2.0% |
| Zinc | 1,623.00 | 28 | 1.8% |
The Dow finished down 40 points in a sell off late in the session on concerns that BP will run into difficulties to finance the clean up of the Gulf of Mexico Spill. Also pushing the market down was the Fed’s Beige book which is a regional survey of economic growth. The survey showed growth was slow in many parts of the country even though the economy expanded in all 12 Federal Reserve districts for the first time in more than two years.
Earlier in the session there was positivity from Fed Chairman Ben Bernanke’s speech which reinforced that policy makers will aid the economic recovery. He also mentioned that he will keep the pledge to keep interest rates at a record low for an extended period given high unemployment and low inflation. So, in light of the depth of the recession, the recovery shall be moderately paced.
Gold was down on some profit taking after making a record high on Tuesday. There doesn’t seem to be any early technical clues to suggest a market top is close at hand.
Today, our market suggests an opening of 16 points to the down side with all eyes now on the miners which will move on the release of Chinese Macro data out today around midday - CPI, PPI, Industrial Production and Retail Sales. An hourly chart of our index shows an up trend channel we have held since the 7th of June. The technical level of 4380 ( 100 period moving average) should act as support today which is also right on trend line support.
Looking to long term trends, the Australian market is now trading around 7% below its 200 day moving average at 4700 whilst the Dow is at only 5% below its long run average at 10500 which shows our underperformance. Over the medium term we could see the index catch up to take the index up to atleast 4450. The next week will be interesting as it seems momentum is building as we have now seen a month of inside range days since the big sell off we saw on the May 6th. This pennant formation could see the market break to the upside strongly if volume is there to support the move with 4700 as a target over the medium term.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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