Earnings season unofficially kicks off this week
July 7th, 2009 by Neil Gynther
Closing Data
| Current | +/- | % | |
|---|---|---|---|
| Dow Jones | 8324.87 | 44.13 | 0.5% |
| NASDAQ | 1787.4 | -9.12 | -0.5% |
| S P 500 | 898.72 | 2.3 | 0.3% |
| FTSE 100 | 4194.91 | -41.37 | -1.0% |
| Nikkei 225 | 9680.87 | -135.2 | -1.4% |
| US Bond 10 Yr | 3.5081 | 0.0077 | 0.2% |
| US Bond 30 Yr | 4.3579 | 0.0332 | 0.8% |
| COMEX Gold - Aug 09 | 924.3 | -6.7 | -0.7% |
| COMEX Silver - Jul 09 | 13.238 | -0.17 | -1.3% |
| COMEX Copper - Jul 09 | 226.25 | -4.3 | -1.9% |
| WTI Spot | 64.06 | -2.62 | -3.9% |
| Aluminium | 1559 | -37 | -2.3% |
| Copper | 4859 | -132 | -2.6% |
| Lead | 1653 | -37.5 | -2.2% |
| Nickel | 15380 | -875 | -5.4% |
| Tin | 14300 | -200 | -1.4% |
| Zinc | 1497 | -43.5 | -2.8% |
US stocks cut losses, ending mixed on Monday, as a dismal jobs report last week and expectations for a gloomy earnings season worried the market. Nonetheless, the Dow and the S&P 500 rebounded in late trading as worries about the duration of the recession triggered a move into defensive stocks. The shift in mood sent the CBOE Volatility Index up, to around 29. Commodity, homebuilding, technology and retail shares were among the big decliners on Monday.
On the Dow, Chevron (-0.4%) and Exxon Mobil (-0.6%) led the declines, falling along with the price of oil. Techs declined as investors rotated out of cyclicals and into defensive stocks.
Earnings season unofficially kicks off this week with a report from Alcoa after the bell on Wednesday; the street expects a third straight loss from the aluminium giant.
Commodities
Oil fell more than 4% to $64 a barrel (the lowest settle price since May 27, when crude ended at $63.45), as doubts over a potential rebound in the global economy spurred investor risk aversion. The Reuters-Jefferies CRB index, a global commodities benchmark, gave up about 1.75% by the early afternoon.
Gold fell to the lowest in almost two weeks as the US dollar climbed and oil slid; silver also dropped. Copper dropped more than 2% in New York, and nickel declined 1.6% in London. Corn, soybean and wheat prices dropped, as concerns that the US economic recovery may be slower than projected spurred investors' shift away from commodities to the USdollar.
COMPANY NEWS
Rio Tinto (RIO) - Sells a small portion of Alcan Packaging
RIO has finally moved to sell part of the Alcan Packaging business. Subject to regulatory approvals, Alcan Packaging Food Americas has been sold for US$1.2B to Bemis Company. This business generated US$1.5B in sales in 2008. It represents ~23% of Alcan Packaging's total revenues. This sale brings the total divestments by RIO to ~US$3.7B during 2009.
Expect a very quiet and flat day on the Australian market. Financials may have a small rebound with Resource companies probably a little lower. Money could start to flow back into Defensives. It is widely expected that the Reserve Bank will leave official interest rates unchanged.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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