A little lead could be a cause for weakness
July 20th, 2009 by Cale McCulloch
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8743.94 | 32.12 | 0.4% |
| NASDAQ | 1886.61 | 1.58 | 0.1% |
| S P 500 | 940.38 | -0.36 | -0.0% |
| FTSE 100 | 4388.75 | 26.91 | 0.6% |
| Nikkei 225 | 9395.32 | 51.16 | 0.5% |
| SPI Futures | 3985 | 3 | 0.1% |
| All Ords | 3,993.00 | 5.1 | 0.1% |
| Oil | 63.56 | 1.49 | 2.4% |
| Gold | 937.5 | 2.1 | 0.2% |
| Silver | 13.403 | 0.168 | 1.3% |
| Aluminium | 1671.5 | 35.5 | 2.2% |
| Copper | 5230 | -1.5 | -0.0% |
| Lead | 1604 | 3.5 | 0.2% |
| Nickel | 15880 | 30 | 0.2% |
| Tin | 13175 | -35 | -0.3% |
| Zinc | 1520 | 14.5 | 1.0% |
The Dow Jones Industrial Average managed its fifth straight daily gain on Friday night, closing higher by a modest 32 points on the back of strong results from IBM and Bank of America, although others managed to disappoint including GE and Google. The key point here was that investors were willing to overlook some disappointment for the light at the end of the tunnel, but this week will see if it lasts.
The real catalyst for the market this past week was the banking sector, following the jump in Goldman Sachs, it should be noted that the rises that followed have priced many of the companies set to report this week for outperformance also. Any failure may fail to be looked over for too much longer with ¼ of all the companies in the S&P 500 set to report.
A resurgence in commodities was the real strength for the local market last week, and looks set to continue with the price of oil climbing to USD 63.56 a barrel on Friday night, while base metals all managed minor gains. Weakness on the local market is likely to come from the banking sector, as all of the banks near strong resistance (with the exception of NAB), and are unlikely to push through without some serious signs from the local market opposed to the foreign markets which have carried them higher in the past week.
On the domestic economic front, we have the Producer Price Index (PPI) out today, although likely to climb slightly will not be great cause for concern, with the Wednesday Consumer Price Index (CPI) which is the key inflation gauge to be the more closely observed of the two.
The SPI has us opening 11 points higher, but look for weakness in the financials throughout the day, as the sector with the most uncertain outlook may be a target for profit taking this afternoon. Although the big miners should provide some support ahead of the BHP 2nd quarter production report out Thursday.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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