Dow Up On Successful Portuguese Bond Sale
May 13th, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10,896.91 | 148.65 | 1.4% |
| NASDAQ | 2,425.02 | 49.71 | 2.1% |
| S P 500 | 1,171.67 | 15.88 | 1.4% |
| FTSE 100 | 5,383.45 | 49.24 | 0.9% |
| Nikkei 225 | 10,394.03 | -17.07 | -0.2% |
| ASX 200 | 4,573.10 | 25.1 | 0.6% |
| COMEX Gold - Dec 09 | 1,243.10 | 22.8 | 1.9% |
| COMEX Silver - Sep 09 | 19.663 | 0.369 | 1.9% |
| COMEX Copper - Sep 09 | 318.8 | -1.85 | -0.6% |
| WTI Spot | 0.8954 | 0.002 | 0.2% |
| AUD-USD | 0.8954 | -0.0075 | -0.8% |
| Aluminium | 2,100.50 | 72.5 | 3.6% |
| Copper | 7,082.00 | 197 | 2.9% |
| Lead | 2,026.00 | 50 | 2.5% |
| Nickel | 22,805.00 | 730 | 3.3% |
| Tin | 17,795.00 | 370 | 2.1% |
| Zinc | 2,069.00 | 58 | 2.9% |
The Dow finished up 148 points on the back of comforting news that the Portuguese bond sale was a success along with planned budget cuts in Spain and the U.K. This, along with the pledge of almost $1 trillion of emergency loans over the weekend has helped boost confidence that the European debt crisis is easing. Earnings reports also boosted the Dow with Cisco reporting better-than-estimated results after the close of trading, while IBM forecast earnings-per-share may double by 2015.
Gold rose to a record high of $1,249.20 an ounce on speculation international financial support for indebted European nations will depress currencies. Safe-haven buying, increased demand from general investors and bullish technical momentum drove prices into uncharted territory. The Gold price normally moves inversely to the USD, but recently the correlation has been positive as the USD has also rallied to multi-month highs. The fact that gold has become de-coupled from the U.S. dollar is another bullish clue for the precious yellow metal. This move should see further strength in our gold stocks NCM and LGL. Crude oil fell overnight after a U.S. government report showed that inventories are higher for the 14th time in 15 weeks as refiners reduced processing rates.
Our market is pointing to open 60 points on the upside. Data to watch out for today is unemployment for April with consensus to be unchanged. The index may initially test support at 4600 before potentially breaking resistance at 4680. Over the next week, we can expect some reversion back to the 100 day moving average which is 4766, so another 130 points to add. Australian resource stocks RIO, BHP and FMG have bounced strongly from its selloff last week, with more upside expected as these moves have tended to retrace around 50% from the last high, as it did in February.
In company news, CBA says unaudited cash earnings, the banks preferred measure of profitability, for the March quarter came to $1.5 billion.
Asciano Group has signed a long-term contract with freight forwarding company Toll Holdings for the haulage of intermodal rail freight. Asciano says the contract is expected to generate revenues of up to $1 billion over the next five years.
RIO has been given the green light by the state Environmental Protection Authority for the proposed expansion of its operations in the Pilbara.
With a degree of uncertainty still in the air, considering June buy writes in gold stocks may be prudent with premiums being higher due to increased volatility in the market.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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