Slip in consumer sentiment spooks market
July 19th, 2010 by Cale McCulloch
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10,097.90 | -261.41 | -2.5% |
| NASDAQ | 2,179.05 | -70.03 | -3.1% |
| S P 500 | 1,064.88 | -31.6 | -2.9% |
| FTSE 100 | 5,158.85 | -52.44 | -1.0% |
| Nikkei 225 | 9,408.36 | -277.17 | -2.9% |
| ASX 200 | 4,422.00 | 0.0% | |
| COMEX Gold - Dec 09 | 19.03 | 0.166 | 0.9% |
| COMEX Silver - Sep 09 | 303.1 | 9.9 | 3.4% |
| COMEX Copper - Sep 09 | 69.5 | -0.58 | -0.8% |
| WTI Spot | 0.8645 | -0.0132 | -1.5% |
| AUD-USD | 0.8692 | -0.0144 | -1.6% |
| Aluminium | 2,008.50 | 17.5 | 0.9% |
| Copper | 6,650.00 | -6 | -0.1% |
| Lead | 1,789.00 | -12 | -0.7% |
| Nickel | 19,220.00 | -95 | -0.5% |
| Tin | 17,855.00 | -255 | -1.4% |
| Zinc | 1,800.00 | -23 | -1.3% |
US stock markets fell sharply on Friday night, extending losses throughout the session all the way to the bell on the back of a decline in consumer sentiment and weaker-than-expected revenue at Bank of America, Citigroup, and General Electric. At the bell the Dow was off by 2.5% at 10097, the broader S&P 500 lower by 2.88% and the tech heavy NASDAQ fell the most with a 3.11% slide to the close. Leading the Dow lower was Bank of America which slipped 9.2%, GE didn’t help with a fall of 4.6%, while a key reading of consumer sentiment came in well below expectations showing that consumer sentiment hit a wall in July.
Commodities were unable to buck the trend on Friday night with virtually all commodities turning lower through the session. Oil was strong relative to the rest of the commodities, falling by 0.8%, while Gold lost its lustre as a safe haven falling by some USD 20 per Troy Ounce as inflation concerns went out the window and were replaced by deflationary concerns. The Base metals traded lower across the board, posting losses for the session of between 0.64 and 3%.
Over the weekend we saw Julia Gillard call an election for August 21 which will hopefully see and end to investors sitting on the sidelines due to the domestic political uncertainty. The local market looks set to be driven by offshore reporting once again this week, ahead of domestic earnings next month. In US earnings this week we will see IBM and Ford on Monday night, while Goldman, J&J, PepsiCo, Apple, Morgan Stanley and Caterpillar, to name a few, will post earnings throughout the remainder of the week.
The SPI futures have us opening dow 79 points this morning, but I believe the market will outperform relative to the global peers this week, and today in particular… The reason, well it was mainly the banking sector doing the damage in the US on Friday and with hedge funds beginning to cover their short positions in Australian financials throughout last week, I think this will probably continue today despite the fall overseas. The VIX did not pop enough on Friday night to give funds renewed conviction to add to their shorts, so I see them continuing to take some profits. While the Resources underperformed last week, the relative outperformance on Friday night should see them hold up relatively well throughout this morning’s trading session. BHP trading in NY is a classic example of this, ending at an AUD equivalent of 37.83 compared to the local close of 38.15.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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