Jan 15, 2014

Morning Market Report

Trouble on the horizon for resources companies, with forecasts revised in in the face of falling demand.

  • The market is up 36 points.
  • The Dow Jones was up 116 at 16,374. The market edged higher during the day and ended on its highs in a 110 point range.
  • A number of factors supported the rise. Economic data was generally better than expected, particularly retail sales which rose 0.2%. Export prices and inventories were also suggestive of positive future growth. Earnings results from the banks were generally positive from an industry perspective. The other key influence was talk by two Fed officials who both highlighted that tapering will continue because the economy can withstand the reduction in stimulus.
  • The S&P rose 20 points to 1839.
  • Oil was up 0.76% at US$92.50.
  • Gold fell $7.00 to US$1244.10 per ounce.
  • The US$ was stronger against most major currencies. The Aussie dollar was weaker and is currently trading at US89.61c.
  • VIX volatility index fell 7.53% to 12.28.
  • US treasury markets were weaker — the yield on the 10 year bond rose five basis points to 2.827% following the strong retail sales data.
  • European shares were stronger — the UK FTSE rose 0.14%, the German DAX was up 0.32% and the French CAC rose 0.26%.
  • European bonds were mixed — the yield on the Euro 10 year bond was unchanged at 1.813%. The UK 10 year bond yield rose one basis point to 2.834% and the German yield was also flat.
  • Base metal prices were mixed — nickel continued its strength, rising 0.92%, lead rose 1.21% and zinc was up 0.41%. Aluminium and copper bucked the trend, falling 1.10% and 0.82% respectively.
  • Iron ore was down US$1.40 at US$129.50 a tonne.



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