Jun 2, 2014

Morning Market Report

A big day on overseas markets, while the ASX stayed steady.

The market is down four points. The Dow Jones was up 18 points at 16,717 — the market dropped on the open, and was down as much as 50 points due before recovering and ending with a late rally. The defensive sectors —  consumer staples, healthcare, telcos and utilities — all outperformed while most cyclical sectors underperformed. It was a quiet day of trading but volume was boosted by semi-annual MSCI rebalancing of indices. The market traded in a 72 point range.

US economic data was mixed — Personal income rose 0.3%, in line with forecasts, but consumption disappointed, falling 0.1% compared to expectations of a 0.2% rise. Economists said the main issue was that there was no real evidence of any pent up demand resulting from severe winter weather. The Chicago PMI was strong, rising to 65.5 against expectations of a fall. And the final reading of the Michigan consumer index rose to 81.9 from the 81.8 preliminary reading but below expectations. The current conditions index fell but consumer expectations increased.

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