Holiday period over
January 6th, 2009 by Cale McCulloch
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8952.89 | -81.8 | -0.9% |
| NASDAQ | 1628.03 | -4.18 | -0.3% |
| S P 500 | 927.45 | -4.35 | -0.5% |
| FTSE 100 | 4579.64 | 17.85 | 0.4% |
| Nikkei 225 | 9043.12 | 183.56 | 2.1% |
| SPI Futures | 3749 | 68 | 1.8% |
| All Ords | 3,639.00 | -16.8 | -0.5% |
| Oil | 48.45 | 2.28 | 4.9% |
| Gold | 853.4 | -5.35 | -0.6% |
| Silver | 11.12 | -0.1 | -0.9% |
| Aluminium | 1515.5 | 23.5 | 1.6% |
| Copper | 3101.5 | 30.5 | 1.0% |
| Lead | 1079.5 | 39 | 3.7% |
| Nickel | 12405 | -305 | -2.4% |
| Tin | 11400 | -150 | -1.3% |
| Zinc | 1236 | 15.5 | 1.3% |
Wall Street
Wall Streets winning streak ended last night. The Dow closed down 82 points due to ongoing concerns about declining corporate profits. Although no one is expecting “good” results, I think it is more the reaction to those results that there is still some anxiousness about. Just how much is already priced in? Bad economic data continues to flow, but last weeks rally (on light volume) showed the extent to which this bad news has already been priced in. There is a saying “Buy the rumour, Sell the fact”. Although, in today’s unusual environment this seems to be reversed. Traders are selling stocks prior to the release of the results to the extent that they appear overdone. Then on the announcement (which may in fact be worse than expected), they are buying the stock. It is this mentality which is leading to the resilience of the market as negative data continues to flow.
Australian Market
The Australian market failed to rally yesterday on the back of a 3% rise on Wall St Friday night. Again, this shows that the domestic market is waiting to see the way global investors react to ongoing bad news, and the effect of larger volume (institutional activity) on global markets now the holiday period is over. It feels like the Australian market is building up pressure, like the tap is on but the nozzle is closed, getting closer and closer to a rally, but awaiting a signal. With so much of investors money on the side lines, it is likely that a bounce in the domestic market will be on high volume, as investors become satisfied with the amount of risk in the market, and seek returns higher than the 5% they can get in the bank.
Oil continued to surge as fighting escalated on the Gaza, rising over $2 per barrel to about US$ 48.50. While Gold pulled back $15 an ounce to $858.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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