Goldman’s Global Leading Inidicator Rolls Over

“Our improved GLI comes at a particularly important time for assessing the cycle. Although our original GLI had not shown a clear peak, we have pointed out for some time that it has been distorted by trending issues in the past few months and that signs ‘under the hood’ have pointed to some slowing in momentum. The improved GLI shows that message more clearly, with a peak now visible there. This suggests that the pace of industrial growth is set to decelerate, although from extremely high levels, an outcome that would be consistent with our GDP forecasts.

Markets are increasingly focused on what this kind of slowing in momentum will mean. As usual at this point in the cycle, the key issue is the extent of deceleration. The acceleration phase in recovery inevitably ends and that point was always likely to come in 2010H1. But, as we show once again, while that shift means a more moderate picture for risk assets, the deceleration is generally only a clear negative event if the slowdown is severe. Although our US forecast is still firmly below consensus, our global forecast does not envisage a sharp slowdown. That said, we will continue to pay close attention to the incoming data on this front, starting with the new release of the GLI tomorrow.”

What does it all mean for the various asset classes?  Not surprisingly, when the GLI is in decline equities tend to under perform, bonds outperform, volatility spikes and credit spreads widen:

“Within equities, the performance differentials between periods when the GLI is rising and falling are on average very large, although of course heavily influenced by the impact of serious downturns and recessions. The differences are strongest in emerging markets (EM) and in cyclical equities (our Wavefront growth basket shows that cyclicals tend to outperform strongly in ‘up’ phases and underperform strongly in ‘down’ phases).

Commodities show a similar pattern. But the relationship is strongest for industrial metals including copper (this is true even if they are excluded from the GLI), and least strong for gold and other precious metals. Interestingly, at least over the sample period here, oil has behaved with a strong cyclical bias too.

Bonds display the opposite behaviour, with a strong tendency for yields to fall when the GLI is falling and significant rises when the GLI is rising. That tendency is largest in the US market (front and back) but visible in other majors. There is also some tendency for the yield curve to steepen more when the GLI is falling.

Unsurprisingly, given the other results, credit spreads and equity volatility (as measured by the VIX) also tend to move significantly higher on average during phases when the GLI is falling and narrow when it is rising. These differences have been extremely pronounced in the recent downturn and—as we have described elsewhere—tend to be most dramatic at the ends and beginnings of cycles.

Experience in FX is more mixed. In general EM FX tend to perform better when the GLI is rising than falling and, within the G10, the commodity currencies are by far the most reliably related on the positive side to phases of the GLI. That said, the GBP, SEK and NOK are all confirmed to be more ‘cyclical’ in this simple analysis than the EUR. On the other side, the CHF is the least cyclical of the G10. Within the G3, the message is more mixed—and more varied over time—but there is a modest tendency over the long term for the USD to do better when the GLI is deteriorating.”

Source: GS – http://www.scribd.com/doc/33861708/GoldmanSachs-Global-Economics-Weekly-20100630

17-3-10 ASX Stock Report

ASX 200 4853.2 (+1.17%)

SPI Futures 4854.0 (+1.04%)

1. Commodity prices remained strong for the Asian trading day, crude futures still up. Our market was up 56 points so a good result all up. Best performing sectors where Energy up 2.34% and Info Tech +3.07%. Carsales CRZ $3.04 (+13.87%) who we had come in last week performed well.

• ASX 200 4853.2 (+1.17%)

• SPI Futures 4854.0 (+1.04%)

2. NSL & KRL $0.185 (+8.82%) tipped by AFR with major potential for investment of the domestic junior mining companies.

3. Industrials; FGE $2.65 (+5.58%); AIO $1.92 (+2.95%); BLY $0.32 (+1.59%); DOW $7.60 (+1.6%); DCG $1.60 (+0.31%); we are still positive the sector which is highly correlated with resource sector demand.

4. Corporate Express CXP $5.71 (+24.13%) has received an offer for the entire business from US company Staples Inc. The cash offer is for $5.60 per share for ordinary equity holders and a 12.5cent dividend which was announced March 2nd. This values equity for CXP at $1bil. The CXP board has unanimously recommended the offer to shareholders.

5. AWB $0.935 (-11.37%) has downgraded earnings for the full year after factoring in a tough grain marketing environment. Profit has been downgraded for FY10 to $85mil-$110mil, down from $115mil-$140mil.

6. Property; we all know the city of Melbourne is the pick of Australian property growth markets. Stock to keep investing in off the back of the residential property market buoyancy FKP $0.76 (+0.66%); CWP $2.52 (+0.8%); DVN $0.285 (+1.79%)

7. Retail; DJS $5.13 (+1.18%) off the back of good reporting for 1h FY10 results, MYR $3.53 (+0.57%) still has inherent leverage to regional expansion with their competitive advantage in attracting common consumers in times of limited disposable income could prove beneficial; PBG $1.32 (+3.13%); HVN $3.74 (-0.8%)

8. Teleco’s; TLS $3.13 (+0.64%); IIN $2.45; BGL $0.15 (+3.45%)

9. TLS there is still opposition between the senate and the Government over the legislation to split our country’s largest telecommunications provider with no real substance in identifying an outcome. Until that happens we would suggest there being a trading opportunity in the stock. The bill that was proposed by the government has had an implementation study written up over it, which is still yet to be released either to the public or to the senate. Until this study is reviewed the bill may be opposed in the senate. The proposition of creating a National Broadband Network will have significant implication on the infrastructure owned by TLS, however if it is overturned in the senate this could prove TLS be more valuable.

Overseas Headlines:

1. Interest rates in the US will remain at very low levels for some time to come according to the Federal Reserve Bank. The reduced participation rate, slowing capacity utilisation will discourage investment in the country and it is most likely that this will impact on their dollar as we saw this morning. A similar situation will transpire in the Euro Zone. For equity markets and the cost of debt this may be encouraging signs, but just how long the US can sustain their economy without changing rates is the question. Inevitably one would think that inflation would become a key concern and that rates would have to tend to more realistic levels in the mid to long-term.

2. Crude Oil prices rose this morning in anticipation of an outcome on supply ambitions post OPEC ministers meeting today in Vienna . With inventories rising it may be expected that OPEC who distribute 40% of the world’s oil will decide to continue cutting their output of barrels as it has since 2008.

3. Thai citizens are displaying some very unique rituals to overturn their existing government, creating political unrest.

Data Tomorrow:

1. HK:

• U/E survey 4.8% vs. prior 4.9%

2. Japan:

• Interest Rates on hold

3. UK

• Major banks mortgage approvals February survey 54K vs. prior 49K

• Public sector borrowing February survey 14bil vs. prior 4.3bil

• Money supply MoM February survey 0.7% vs. prior 0.4%

• Money Supply YoY February survey 4.3% vs. prior 4.9%

4. EU:

• Italy trade balance January survey -€1650 vs. prior -€123.0mil

• Netherlands U/E February survey 5.7% vs. prior 5.6%

5. US:

• CPI MoM February survey 0.1% vs. prior 0.2%

• CPI YoY February survey 2.3% vs. prior 2.6%

• Jobless Claims March 14 survey 455K vs. prior 462K

• Continuing claims March 7 survey 4522K vs. prior 4558K

• Current Account (exports less imports) Balance 4Q survey $US119.3bil vs. prior $US108.0bil

16-3-10 ASX200 Stock Report

1. Domestic equities market was again relatively flat today, the ASX200 finishing up 13.1 points. Largest contributions where from the teleco’s lead by TLS which ended up 2.3% closing at $3.11 and looks to be in a good position to be trading off; remembering the share price will be sensitive to government intervention on the NBN split up of infrastructure assets.

• ASX200 4797 (+0.27%)
• SPI 4804 (+0.27%)

2. Minutes to the RBA meeting from Tuesday 2nd March, justification for their 0.25bp rate rise:

• International economic conditions remain uncertain. The US reported mixed results; EU remains the weakest of all. Japanese reported relative strong GDP growth, India slightly negative reflecting declining production and China reporting little but evidence of strong property price growth and greater bank lending.

• Global public debt levels remain an issue especially considering the widening of fiscal deficits.
• Domestic economic conditions where faintly better than previously. GDP for Dec09 quarter was expected to be 0.75 – 1%, contributed to by primarily the public sector and household spending.
• Improved business sentiment, improvements in labour market figures where on the upside
• Business credit growth and retail trade improved over January.
• The RBA noted Melbourne as the stronger city from the buoyant domestic housing market.
• Building approvals notably higher from the year previous however loan approvals retracted as expected post MP tightening
• CPI figures where not released, private sector wage growth remained low leading the RBA to suggest underlying inflation will fall further in the short term to 2.5%.
• Sovereign debt issues are not feared by their magnitude but from the possibility of a flow on effect. Greek and German gov. bond spreads had increased, while other major developed nations bond spreads including our own stayed relatively unchanged.
• The RBA admits that if the sovereign debt problems where not resolved this could have implications for our domestic economy.
• Company profits for the 1H FY10 on the aggregate where vastly stronger than the year previous.

3. SEV $8.00 (+0.38%) in trading halt post Federal Court ruling post release of the IER for merger with industrial equipment business owned by Kerry Stokes. NWS $18.16 (+0.83%) is still our strongest content distributor.

4. MOL $0.895 (+1.7%) after Chinese Government approval for $US200mil investment in the company by Hanlong Mining, final approval rec’d today.

5. LNG $0.525 (+2.94%); AOE $5.23 (-0.38%) have signed a limited obligation extension to the terms of the agreement to buy LNG’s Gladstone project. The provisions for the agreement have been extended until June 30th. AOE still developing on an outcome from takeover offer from Shell/PetroChina bid.

6. RIO $75.50 (+0.16%) and Chinalco are entering into a joint-venture to manage political uncertainty and tap into west African country Guinea’s Iron Ore. The Simandou field is set to rival the globe in terms of size and quality of iron ore, comparable to WA Pilbarra mine or Carajas in Brazil . Chinalco has kept the door open for further co-operation between the companies both domestically and abroad.

7. RIO annual report for 2009, experienced difficult period in comparison to the year previous but the company is optimistic on prices going forward. Major highlights:

• Underlying earnings down 38% to US$6.3bil
• Net debt reduced by US$20bil to $US18.9bil
• Cash flow from operations down 33% to US$13.8bil
• Capex US$5.4bil

8. Property market; ALZ $0.515 (-0.96%); SDG $0.80 (+1.91%); DVN $0.28 (+7.69%); CDI $0.53 (-1.85%)

9. Engineering; BLY $0.315 (-1.56%) nature of business may mean that reporting season for them is not in line with their most productive periods for earnings over the year. They are forced to report in February despite a lot of their operations being offshore, especially in the Americas, making their reporting appear conservative and for their quieter months of Jan and Feb. BLY has begun readying rigs and hired more than 1000 employees. The stock will be included in the S&P/ASX 100 from March 19th.

10. UGL $15.02 (+4.23%) we see as overpriced but still an option in the sector with upgrades to industrial services forecasts, FGE $2.51 (+10.09%); DOW $7.48 (+0.13%) & AAX $3.99 (+1.27%) are good plays in the engineering and industrials space.

11. IIN $2.45 (+3.38%) investor presentation 1H FY10 results, focus on low price high bandwidth ISP, differentiating products.

• Revenue $228mil (+11%)
• Underlying NPAT $14.8mil (+30%)
• Underlying EBITDA $37.4mil (+20%)
• Underlying ROE 14% (+3%)

12. Australian Central credit union recorded $6.3mil profit – 55% increase in HY FY10 profit. 120% increase in retail deposits and 107% rise in assets under management.

Overseas Headlines:

1. The beginning of the global financial market descent was marked by the fall of IB Lehman Brothers. Could they also have something to do with the resurrection of global financial markets? The company has announced today that it has come out of receivership.

2. Fears of tightening policy in China entered the commodities market overnight with the majority of traders factoring into prices the effect this will have on domestic demand.

3. European Union officials have confirmed that a mechanism will be put in place to help the Greek government avoid default on debt. They did not confirm how much money would need to be pooled nor who would be contributing and to what extent they would do so, however after meeting yesterday they where protective of their vested interest in the sovereign debt within the region. Greece has committed to cutting their deficit by 4% to bring it below 4% by the end of 2012.

Data Tomorrow:

1. Canada:

• Wholesale Sales month on Jan survey 0.5% vs. prior 0.7%

2. Japan:

• BOJ Target Rate (MP) 0.10%

3. UK:

• Jobless Claims change February survey 6K vs. prior 23.5K

• Average weekly earnings 3months to January (YoY) survey 1.7% vs. prior 0.8%

• U/E rate 3months to January survey 7.9% vs. prior 7.8%

4. US:

• Producer Price Index February survey -0.2% vs. prior 1.4%

• PPO exports Food and Energy survey 0.1% vs. prior 0.3%

Stock Market Report 12-1-10

US technology shares fell on Monday as investors took profits after the NASDAQ touched a 16-month high on Friday. Shares of industrials buoyed the broad market following the release of strong Chinese economic data.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers eight to seven. On the NASDAQ, decliners topped advancers seven to six.

China’s strong trade data lifted US companies with large international operations. Constructions machinery maker and Dow component Caterpillar jumped 6%, its largest daily advance in nearly three months. Aluminium producer Alcoa rose 1.2% ahead of its fourth-quarter earnings announcement expected after market close. Analysts, on average, expect Alcoa to show a profit of 6cps compared to a loss in the previous quarter.

Dow components Intel and JPMorgan report results later this week. S&P 500 earnings are expected to have more than tripled in the fourth quarter of 2009, thanks to easy comparisons to the fourth quarter of 2008. A substantial improvement in financial sector results is expected to fuel gains.

McMoRan and Energy XXI shares jumped after the energy companies announced a key discovery at one of their oil exploration wells in the Gulf of Mexico.

Technology shares, however, weighed on the market. Shares in Apple, Dell and Hewlett-Packard all declined.

UPS and Fedex advanced 4.8% and 2.9%, respectively, on speculation that cold weather affecting parts of the US will drive consumers away from stores and into online shopping, increasing shipment volumes.

Among decliners, Dow component Procter & Gamble shares fell 0.4% on concern that Friday’s currency devaluation in Venezuela could hurt sales and revenue as products will be more expensive.

Overseas Markets

Dow up 48 pts to 10,666 (10,592 – 10,676)

S&P 500 up 2 pts to 1,147 (1,142 – 1,150)

Nasdaq down 5 pts to 2,312 (2,302 – 2,326)

SPI 200 Futures up 6 pts to 4,939 (4,916 – 4,958)

FTSE up 4 pts to 5,538 (5,528 – 5,600)

Nikkei up 117 pts to 10,798 (10,678 – 10,816)

Shanghai SE Comp up 17 pts to 3,213 (3,197 – 3,307)

Commodities

WTI Oil down 0.3% to US$82.52/bbl

Gold up 1.2% to US$1,152/oz

Sugar (NY) down 2.8% to USc26.75/lb

Corn up 1.6% to US$3.82/bushel

Wheat up 1.7% to US$5.38/bushel

Natural Gas (Henry Hub) down 12.0% to US$5.77/MMbtu

Silver up 0.8% to US$18.62/oz

Platinum up 1.1% to US$1,596/oz

Palladium up 1.3% to US$433.75/oz

Copper (NY) up 1.2% to US$3.43/lb

Currency

A$ / US$ up 1.4USc to US$0.93 /A$

EUR / US$ up 2.2USc to US$1.45 /EUR

GBP / US$ up 1.7USc to US$1.61 /GBP

US$ / Yen down 1.3 Yen to 92.07 Yen/US$

ASX200 Stock and CFD Report 28-09-09

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The SFE Futures down 20 points overnight. BHP and RIO in ADR form overnight, BHP up 0.14% and RIO down 1.89%. BHP was up 1.40% and RIO down 0.28% in the UK. BHP closed at the equivalent of 3703c, down 52c on last night’s close. Metals mixed on LME Copper up 0.52%, Nickel down 1.18%, Zinc up 0.82%, Aluminium down 1.33%, Lead up 0.65% Oil price up $0.26 to $66.02 Gold down $7.30 to $992 Bonds up 10 year yield at 3.329% down from 3.381% A$ up 86.62c versus 86.53c yesterday morning. CRB Commodities index down 0.30% VIX Volatility Index up 2.65%

Market closes down for third straight session. New home sales and August durable goods numbers were below expectations. Durable Goods fell 2.4% in August, the biggest intermonth decline since January. The aircraft segment fell 42% in August, following a 98% surge in July. Automobile orders increased by 0.4%, after a 1.6% gain in July. New orders for non-defence capital goods, excluding aircraft- a proxy for business investment declined 0.4% following a 1.3% fall in July. Some economists trimmed their September quarter GDP growth projections.  US new home sales also disappointed, rising by a less than expected 0.7% to 0.429M annualised in August Volumes were lighter for the week ahead of the Jewish Yom Kippur holiday on 28 September - 1.19B shares traded down 47% on that for the preceding week

The market is down 55. The SFE Futures were down 50 this morning.

ASX200 Stock and CFD Report 22-09-09

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The SFE Futures down 15 points overnight.BHP and RIO in ADR form overnight, BHP down 2.06% and RIO down 2.69%. BHP was down 1.19% and RIO down 3.43% in the UK. BHP closed at the equivalent of 3800c, down 8c on last night’s close. Metals stronger on LME Copper up 0.26%, Nickel up 1.42%, Zinc up 0.37%, Aluminium down 1.80%, Lead up 1.39% Oil price down $2.33 to $69.71 Gold down $5.40 to $1005 Bonds down - 10 year yield at 3.487% up from 3.474%. A$ weaker 86.34c versus 86.57c yesterday morning. CRB Commodities index down 2.18% VIX Volatility Index up 0.59%

Dell plans to buy information-technology company Perot Systems Corp (up 65%) for $3.9bn drove some buying in tech stocks. Nasdaq rose 0.2% Financials down 0.91% led by decline in Bank of America Energy sector stocks like Exxon Mobil Corp, ConocoPhillips and Halliburton Co down in the face of a lower oil price Gold down for third day in a row. Takes shine off gold stocks Homebuilder Lennar Corp fell by 3% after announcing that a doubling in its quarterly loss in the three months to August The Conference Board Index of leading economic indicators increased 0.6% in August, Post their fifth successive gain. Near consensus forecasts of up 0.7% US$ stronger weighs on oil and gold Some profit taking ahead of key government meetings this week, including the Federal Reserve’s two-day rate-setting meeting.

The market is down 5. The SFE Futures suggested a 15 point fall.

ASX200 Stock and CFD Report 14-09-09

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The SFE Futures down 4 points overnight. BHP and RIO in ADR form overnight, BHP up 0.71% and RIO up 1.21%. BHP was up 2.97% and RIO up 1.69% in the UK.  Metals weaker on LME Copper down 0.68%, Nickel down 1.43%, Zinc down 2.90%, Aluminium down 0.49%, Lead down 2.39%  Oil price down $2.65c to $69.29  Gold up $9.60 to $1006  Bonds steady - 10 year yield at 3.343% up from 3.342%. A$ down 86.19c versus 86.33c yesterday morning. CRB Commodities index down 1.55% VIX Volatility Index up 2.55% to 24.15

Main Drivers First day down in six sessions. Selling in Energy stocks primarily led the market lower on a weaker oil price. Chevron, down 0.98%, and ExxonMobil, down 0.95%. Financials weaker led by falls in JP Morgan Chase and Bank of America down 1.21% and 1.45%. National Semiconductor Corp down around 6%. Profit result fell short of expectations although the outlook statement was more positive.  FedEx Corp up 6.41% after announcing a better than expected quarterly result.  Gold finally broke up through the $US1000 level. Now near March 2008 highs. Better than expected September Reuters/University of Michigan consumer sentiment index did not do much for the market. A further rundown in wholesale inventories saw economists edge up their thirdquarter GDP forecasts.

The market is down 50. The SFE Futures were down 4 this morning. Japanese market down 2.5% at the moment. Dow Futures down 82 points.

ASX200 Stock and CFD Report 09-09-09

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The SFE Futures up 11 points overnight. BHP and RIO in ADR form overnight, BHP up 4.30% and RIO up 4.81%. BHP was up 2.62% and RIO up 3.55% in the UK. BHP closed at the equivalent of 3782c, up 24c on last night’s close. Metals stronger on LME Copper up 2.39%, Nickel up 1.43%, Zinc up 3.98%, Aluminium up 1.64%, Lead up 4.36% Oil price stronger up $2.99 to $71.10 Gold price up $3.10 to $999 Bonds down - 10 year yield at 3.469% up from 3.442%. A$ up 86.36c versus 85.21c yesterday morning. CRB Commodities index up 2.02% VIX Volatility Index up 1.43% to 25.62

Energy, commodities and industrial companies up on higher metals and oil prices. Alcoa up 3.5%, Chevron up 2.2%.  US$ fell to lowest level for a year against euro.  Gold price touched $1000 an ounce but closed below it. General Electric up 4.5% as JP Morgan upgraded to overweight from neutral. Health Care was the only one of the S&P 500’s 10 major sectors to fall. Cadbury rejects Kraft food bid. Cadbury jumped $14.42 or 38.5% in the US (same rally as in the UK the night before) to $51.88. Kraft fell $1.65, or 5.9%, to $26.45. Big phone deal in UK also boosted sentiment. Deutsche Telekom and France Telecom said they planned to combine their British mobile phone units to form that country’s biggest mobile operator.

The market is up 23. The SFE Futures were up 11 points this morning. Lots of economic figures out today, retail sales fell by a seasonally adjusted 1% in July, compared to expectations of 0.5%. Housing finance also fell 2% in July against expectations for a 1.0% fall. Consumer Sentiment hit a 4 year high, rising by 5.2% in September. The index is up 34.4% over the last four months.

ASX200 Stock and CFD Report 8-09-09

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The SFE Futures up18 points overnight. BHP and RIO were up 2.37% and 2.03% in the UK Metals stronger overall on the LME Copper up 0.81%, Nickel up 0.60%, Zinc down 1.05%, Aluminium up 0.94%, Lead up 1.79% Oil price steady in Europe ahead of OPEC on Wednesday (likely to leave production quotas unchanged) A$ up 85.55c versus 85.21c yesterday morning. Main Drivers…with Wall street closed the focus was on Europe A weekend agreement by G20 finance ministers and central bankers to keep economic stimulus measures in place for longer added to the positive sentiment. Kraft Foods Inc. made an unsolicited bid for U.K. confectioner Cadbury PLC overnight. Cadbury UP 38%. Cadbury has rejected the bid but Kraft said it is committed to working toward a recommended transaction and to “maintaining a constructive dialogue.” Lonmin Plc rallied on press reports that Xstrata Plc was readying a bid for the company. Deutsche Telekom AG gained on market talk it would some sell off its UK operation. German manufacturing orders rose strongly in July, above economists’ forecasts.

The market is up 44. The SFE Futures were up 18 this morning. Companies hitting fresh yearly highs this morning include: ARB Corporation (ARP), Brockman Resources (BRM), Lion Nathan (LNN), SMS Management (SMX) and Toll Holdings (TOL).

The A$ hit 85.55c overnight on talk that the RBA will be the first Central Bank to increase interest rates as early as next month. Talk of the A$ hitting 90c next month and Parity next year as the US retain a low interest rate environment for the foreseeable future and we raise rates to more “normal” levels (thought to mean around 6%).

ASX200 Stock and CFD Report 2-09-09

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The SFE Futures down 71 points overnight. BHP and RIO in ADR form overnight, down 1.40% and 1.80%. BHP was down 2.61% and RIO down 3.42% in the UK. BHP closed at the equivalent of 3717c, down 12c on last night’s close. Metals well down on the LME Copper down 4.30%, Nickel down 4.16%, Zinc down 1.51%, Aluminium down 3.05%, Lead down 1.48% Oil price down $1.91 or 2.73% to $68.05 Gold price up $3.00 to $957 Bonds up – 10 year yield at 3.375% down from 3.401%. A$ down 82.65c versus 84.36c yesterday morning. CRB Commodities index down 1.85% after being up 0.7%. VIX Volatility Index up 12.07% to 29.15

Defensive sectors hold up – Healthcare, Utilities, Telecoms. Oil price turned a 2.0% gain into a 2.7% loss. ISM Manufacturing index stronger than expected and at 52.9 (against consensus of 50.5) was the first time it had been above 50 since January 2008. The New Orders element was also up 10%. Pending home sales stronger than expected. Up 3.2% against expectations of +1.5%. 6th monthly rise on the trot. July construction spending disappoints. Down 0.2% against a flat forecast. The IMF upped its global growth forecast for 2010 from +2.5% to +3.0%. Ford down 4.7% on sales numbers down 17% in August against expectations for a 33% gain. Wells Fargo down 4.7% after indicating that it would pay back government bailout funds on robust internal capital generation. FOMC Minutes tonight.

The market is down 76. The SFE Futures were down 71 this morning. 2nd Q GDP number has come in better than expected. Read below.

ASX200 Stock and CFD Report 24-8-09

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The SFE Futures up 69 points overnight. BHP and RIO in ADR form overnight, up 1.43% and 3.50%. BHP up 1.82% in the UK, RIO up 2.65%. BHP closed at the equivalent of 3763c, up 102c on last night’ close. Metals well up – Copper up 3.64%, Nickel up 2.24%, Zinc up 1.69%, Aluminium up 1.18%, Lead up 2.45% Oil price at 10 month highs up 65c or 1.03% to $73.19 Gold price posts largest gain for the month up $13.00 to $955, Bonds down – 10 year yield at 3.556% up from 3.435%. A$ stronger up to 83.76c versus 83.15c yesterday morning. CRB Commodities index up 0.9%. VIX Volatility Index down 0.32% to 25.01.

Markets had their 4th day gain. Volumes picked up on recent lows but considering options expiration was still well below average. All US markets at their calendar year high. S&P 500 now 55% off its low in March. Fed Chairman Bernanke’s speech at the annual Jackson Hole central banker talkfest claimed that prospects for a return to growth in the near term appeared good but warned of further losses for financial firms and conceded that many corporate and households still struggled to access credit. His optimism was given a kicker by better than expected July Existing home sales.

Trichet’s speech at Jackson Hole contained a warning that the world economy likely faced a very bumpy road ahead and that ‘green shoots’ were not enough for him to declare the recovery sustainable, and that central bankers and governments still had an enormous amount of work to do. Meredith Whitney, the ex-Oppenhemier banking analyst who predicted that Citigroup Inc could go bust if it didn’t get help, forecast a quadrupling in US bank failures to 300+ and that it would drag on any economic recovery. Great start to the week – the market is up 115 – the SFE Futures were up 69 this morning on the back of Wall Street. Arrow Energy (AOR), Flexigroup (FXL), Troy Resources (TRY) and Wotif.com (WTF) have all hit a fresh yearly high.

ASX200 Stock and CFD Report 17-8-09

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The SFE Futures down 27 points overnight. BHP and RIO in ADR form overnight, down 3.24% and 2.79%. BHP down 2.33% in the UK, RIO down 2.22%.  BHP closed at the equivalent of 3794c, down 32c on last night’s close. Metals much weaker - Copper down 2.07%, Nickel down 4.96%, Zinc down 4.51%, Aluminium down 3.45%, Lead down 4.33%, Oil price down 4.46% or $3.01 to $67.51 Gold price down $7.80 to $949, Bonds up - 10 year yield at 3.558% down from 3.591%. A$ down to 82.97c versus 84.21c yesterday morning. CRB Commodities index down 2.88%. VIX Volatility Index down 1.78% to 24.27

S&P 500 fell for the first time in five weeks - compares to the ASX 200 up 3.76% lead by the banks up 6.9%. S&P still just above 1,000 at 1,004.  Low volume day and a very narrow trading range for most of the day - see chart. Consumer sentiment numbers weaker than expected and hit their lowest index reading since March. On the back of that the oil price fell 4%. Metals down on reports that Chinese copper imports had fallen by 15% in July (although the June figure was a record). CPI numbers in line with expectations. Core CPI unchanged compared to consensus expectations for a 0.1% rise. Industrial production a bit better than expected. First gain in nine months. Materials sector (resources) the worst of the bunch down 2.7%. Retailers down 1.7% after JC Penney fell 6% on results.

The market is down 39 this morning. The SFE Futures were down 28 this morning. Japan’s economy grew for the first time in five quarters. Its real GDP grew 0.9% in April-June from the previous quarter, an annual increase rate of 3.7%. Enough to have the NIKKIE up 0.76% this morning against the trend. Commonwealth Bank (CBA) has gone ex dividend 115c today.

ASX200 Stock and CFD Report 10-8-09

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The SFE Futures up 41 points overnight. BHP up 0.56% in ADR form overnight, RIO down 1.78%. BHP up 0.95% in the UK, RIO down 2.90%. BHP closed at the equivalent of 3858c, up 58c on last night’s close. Metals rebound again – Copper up 2.06%, Nickel up 0.10%, Zinc up 2.69%, Aluminium up 1.38%. Oil price down 99c to $70.93. Gold price down $3.40 to $959. Bonds down – 10 year yield at 3.854% up from 3.746%. A$ down to 83.49c versus 84.00c yesterday morning. CRB Commodities index unchanged. VIX Volatility Index down 3.54% to 24.76

S&P 500 up for the fourth week in a row. Volumes in the US market running 24% down on last year. Strong session for the US$ up 1.2% against a basket of currencies. Better than expected employment numbers will cause a good rally here today after our market fell 27 on Friday in nervousness about the number. 247,000 jobs lost against consensus of 325,000. Unemployment at 9.4% against consensus of 9.6%. June consumer credit numbers were down for a fifth consecutive month and provided a reminder that scope for a near term rebound in household spending is limited. Quote of the night: “The downturn has ended but the recovery hasn’t begun”. Housebuilders had a very strong Friday night in the US on the back of a good set of results from Beazer Homes (up 15.4%). That added to better than expected Pending Homes sales numbers last week and fed the recovery in the housing sector which was up 7.2% and up 13% for the week. Good for BLD, JHX and CSR today.

The market is up 44. Good start to the week - the market is up 44. The SFE Future were up 41 this morning. IRESS Market Technology (IRE), Biota Holdings (BTA), Customers (CUS), Mincor Resources (MIN) and Premier Investments (PMV) have all hit a fresh yearly high.

ASX200 Stock and CFD Report 7-8-09

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The SFE Futures down17 points overnight.  BHP and RIO weaker in ADR form overnight, down 1.78% and 3.86%. BHP down 0.25% in the UK, RIO down 1.11%. BHP closed at the equivalent of 3818c, down 61c on last night’s close. Metals much weaker following strong rises - Copper down 2.86%, Nickel down 4.18%, Zinc down 4.00%, Aluminium down 3.97%, Lead down 4.86%,  Oil price down 3c or 0.04% to $71.94. Gold price down $3.40 to $963. Bonds up - 10 year yield at 3.746% down from 3.764%. A$ down to 84.00c versus 84.08c yesterday morning. CRB Commodities index down 1.36%. VIX Volatility Index up 3.09% to 25.67.

Sugar prices touched 28-year highs on reports that monsoonal rains in India could damage cane crops whilst a bigger than expected wet has also placed a ceiling on sugar production in the all-important Brazilian market. Wheat prices were hammered in overnight trading, with US prices recording their largest intraday falls in around nine weeks. The sell down came on forecasts that rain across the northern Great Plains region could bolster this season’s crop size. The Employment numbers tonight are more important and the CNBC story was that there could be a major negative revision with Obama recently warning that unemployment was set to get worse before it got better. Financials down 0.7% having been up 1% at one point. Banks and insurance stocks up in the UK again. Industrials up 0.6%. Cisco managed a small rise on results despite initially falling on the announcement after hours yesterday. Results OK, guidance weak.

Poor finish to the week – down 40. The SFE Futures were down 17 this morning. Resources doing most of the damage with a bit of a floppy performance from financials as well. WA News down 5.5% on a cut dividend with its results.

ASX200 Stock and CFD Report 30-7-09

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The SFE Futures up 3 points overnight. BHP and RIO down in ADR form overnight, down 2.92% and 3.03%. BHP down 2.44% in the UK, RIO down 1.80%. BHP closed at the equivalent of 3661c, down 82c on last night’s close. Metals down – Copper down 2.03%, Nickel down 2.17%, Zinc down 2.82%, Aluminium down 1.62%. Oil price down $3.90 or 5.80% to $63.35. Gold down another $12 to $927. Bonds up – 10 year yield at 3.664% down from 3.688%. A$ down to 81.72c versus 82.66c yesterday morning. CRB Commodities index down 2.7%. VIX Volatility Index up 2.40% to 25.61.

Barack Obama in a local speech said the US economy may be seeing the beginning of the end of the recession – “We have stopped the freefall. The market’s up and the financial system is no longer on the verge of collapse. So there’s no doubt that things have gotten better.” Strong US$ (up 0.9% – biggest rise in a month) didn’t help the commodity markets with the CRB index down a big 2.7%, its worst one day fall in three months. Materials (Resources) sector fell 2.1%. Steel stocks down on a 6.31% fall in Arcelor Mittal and a 4.53% fall in Nippon Steel’s ADR on poor results. Oil price smashed, down 5.8% to $63.35 on a surprise 5.15m barrel gain in US crude supplies in the latest US Energy Department inventories report, as imports rose and refiners cut operating rates. A small decline was forecast by energy market analysts. Durable orders: Actual -2.5% (first fall in 3 months), consensus -0.6%, prior 1.3% (revised from 1.8%) Durable orders ex-Trans: Actual 1.1%, consensus 0.0%, prior 0.8% (revised from 1.1%). The big fall in transportation equipment included a 39% fall in commercial aircraft.

The market is up 34. Good result considering the SFE Futures were up just 3 this morningand the whole commodities sector performance overnight was woeful.

ASX200 Stock and CFD Report 29-7-09

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The SFE Futures down 21 points overnight. BHP and RIO down in ADR form overnight, down 0.32% and 3.86%. BHP down 2.47% in the UK, RIO down 4.67%. BHP closed at the equivalent of 3725c, down 77c on last night’s close. Metals down – Copper down 1.38%, Nickel down 1.91%, Zinc down 1.19%, Aluminium down 0.39%. Oil price down $1.11c or 1.62% to $67.23. Gold down $14 to $939. Bonds up – 10 year yield at 3.688% down from 3.713% as $42bn of 2-yr bonds were auctioned. A$ up to 82.66c versus 82.32c yesterday morning. US$ basket at its lowest this year. CRB Commodities index down 0.9%. VIX Volatility Index up 3.01% to 25.01.

Consumer confidence numbers disappointed. 2nd fall on the trot. Case Shiller house price index better than expected. Home price index booked its first intermonth gain since mid 2006. There were some not so great results in the day’s batch of June quarter earnings announcements. Both Office Depot Inc (down 18%) and Coach Inc (down 1.34%) unveiled profits that fell short of analysts’ expectations. Retail sector one of the best….up 0.6%. Healthcare also up 0.2%. Biotechs up 2.2%. Energy sector down 1.5% on a lower oil price and as gasoline prices dropped for the first time in 11 trading days. Not helped by the July Conference Board consumer confidence index numbers and the latest American Petroleum Institute inventory report, which saw a 4m+ barrel gain in US crude stockpiles last week.

The market has staged a turnaround. It is down 3. We were down 27 on open. Macquarie Group has held its AGM this morning and provides not reason to believe the financial recovery isn’t on the way. MQG up 3% and up 5% from today’s low.

ASX200 Stock and CFD Report 28-7-09

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The SFE Futures up 5 points overnight. BHP and RIO up in ADR form overnight, up 0.54% and 0.59%. BHP up 1.54% in the UK, RIO up 0.93%. BHP closed at the equivalent of 3755c, down 30c on last night’s close. Metals up – Copper up 1.40%, Nickel up 1.14%, Zinc up 0.96%, Aluminium up 0.73%. Oil price up $1.38c or 2.06% to $68.34. Gold up 40c to $953. Bonds down – 10 year yield at 3.713% up from 3.670%. A$ up to 82.32c versus 81.80c since yesterday morning. CRB Commodities index up 0.2%. VIX Volatility Index up 5.15% to 24.28.

Financials up 1.5%. Strong night for US banks Bank of America Corp, Wells Fargo & Co and JP Morgan Chase & Co. Banking index up 3.1% despite a Wall St Journal article that lending was down 3% in the 2nd Q as bank lending standards rise. Copper price hit highs last seen in October on the robust US new home sales. The London Metals Index, a gauge of six industrial metals including copper, aluminium and tin, has jumped 55% in 2009 to date. Energy sector up on the oil price rise. US gasoline prices rose for a tenth successive trading day.

Bernanke gave a presentation and answered a few questions. He said he would not be the FOMC Chairman to preside over the second Great Depression and that the jobless rate would remain high even as the US came out of recession. A weak US$ helped commodities to a small rise. Oil and gas prices up. US$ close to 2009 lows. Bit of a bland night for US results. Mostly a bit disappointing. In the Media sector in the UK, Pearson Plc, owner of the Financial Times, jumped 12% after reporting higher first half earnings. The US$ LIBOR rate went under 0.5% for the first time providing further evidence that credit markets were freeing up.

The market is continuing its good run. It is up 23 and closed higher yesterday (up 50) for the 10th consecutive session. The SFE Futures were up 5 this morning.

ASX200 Stock and CFD Report 27-7-09

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The SFE Futures up 26 points overnight. BHP and RIO up in ADR form overnight, up 0.21% and 1.34%. BHP down 0.51% in the UK, RIO up 0.83%. BHP closed at the equivalent of 3760c, up 9c on Friday’s close. Metals mixed – Copper down 0.13%, Nickel up 2.24%, Zinc down 0.48%, Aluminium up 1.42%. Oil price up 86c or 1.3% to $66.96. Gold down $1.70 to $953. Bonds up – 10 year yield at 3.670% down from 3.709%. A$ up to 81.80c versus 81.32c on Friday morning. CRB Commodities index up small. VIX Volatility Index down 1.45% to 23.09

Bonds not going anywhere in the US after a bigger than expected program of bond issuance was announced on Thursday last week. There are record levels of issuance ($115bn) with auctions of $32bn 3-mo, $31bn 6-mo and $6bn 20-yr TIPS Mon, $27bn 1-yrs and $42bn 2-yrs Tues, $39bn 5-yrs Wed and $28bn 7-yrs Thurs. Main US results this week from Dow Jones stocks include: Chevron, Walt Disney, Travelers, Verizon and Exxon Mobil. Main US economic numbers this week: Consumer Confidence, Durable Goods Orders, the first look at second quarter GDP (expected to be down 1.5%) and the Fed’s Beige Book.

A good week in the US – S&P 500 up 4.1% with the materials sector (resources) up a big 8.1%. Energy up 5.6% and utilities up 5.6%. Semiconductor sector down 1.3%. Healthcare up 1.6% as health care reform talks ‘fell apart’. Consumer sentiment numbers slightly better than expected but the commentary hinted that any further improvement in US consumers- lot would be hamstrung by rising jobless levels and minimal wage increases. Good start to the week.

The market is up 51. The SFE Futures were up 26 this morning. Virgin Blue (VBA) and Australand Property Group (ALZ) both in a trading halt this morning after announcing capital raisings.

Morning Stock Report – Stocks to Watch 21-7-09

International Markets

• Market:

-          Further gains have the S&P500 trading at highest level since Nov.

-          S&P500 all positive: Best; Basic Materials +2.5%, Industrials +2.0%, Cons Services +1.8%. Worst; Cons goods +0.3%, Healthcare +0.5%, Financials +0.8%.

-          Reporting season update: Earnings have topped estimates by an avg 15%, with 81% ahead of estimates.

• Commodities:

-          Copper prices rose to a nine-month high on speculation metals consumption will gain as the global economy recovers. +74 this year.

-          Gold, Continues to trade as inflation hedge, trading on 5 week high on weaker dollar and higher Oil prices

-          Iron Ore: Out y’day, cash prices for ore delivered to China (63.5% grade) traded above $90/t for the first time this year.

-          Platinum, 8.5% wage increase to workers at impala Platinum fails to reach agreement with worker seeking 15%. Strikes still on the cards.

• Eco Data:

-          Leading Indicators +0.7% v cons +0.5% (prior 1.2%). 3rd consecutive monthly rise, reinforcing signs the eco may be emerging from recession.

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Morning Stock Report – Stocks to Watch 16-7-09

International Markets

• Market:

-          Biggest gain in 3 mths following solid results from Intel & better than expected manufacturing data.

-          Dow sectors all positive. Best; Basic Materials +5.6%, Financials +5.0%, Tech +4.5%. Worst; Cons services +0.9%, Healthcare +1.4%, Cons goods +2.2%

-          Minutes from Fed Open Market Committee June meeting showed policy makers expect US eco to contract 1% – 1.5%, less than anticipated in April.

-          Treasuries fell for a third day. Yield on 10yr note +13bpts to 3.61%

• Commodities:

-          Oil, rose the most in 6 weeks following a larger than forecast drop in US inventories. Inventories fell 2.81m/bbls last week.

-          Iron Ore, News reports out last yesterday claiming major Chinese steelmakers have accepted a temporary 33% cut in Iron Ore price from RIO, reports they may also consider dropping future annual contract price negotiations. No official work from the CISA.

-          Gold, biggest gain in almost 2 mths as USD fell and Oil rallied raising fears of inflation.

-          Copper, rises most in 5 weeks following the rise in manufacturing data

• Eco Data:

-          Consumer Price Index MoM +0.7% v cons +0.6%

-          Consumer Price Index YoY -1.4% v cons -1.5%

-          Empire Manufacturing -0.55% v cons -5.0% (prior -9.41%)

-          Industrial Production -0.4% v cons -0.6% (prior -1.1%)

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