US & World Daily Markets Financial Briefing 22-09-2009

You can now manage your positions directly from your web browser, whether you use PC or Mac.  Test-drive VT Trader™ Web with your free practice account! Click Here

Positive Comments on Growth to Bring Buyers Back to Markets

The major U.S. index futures are pointing to a higher opening on Tuesday, with the positive economic outlook issued for the Asian region by the Asian Development Bank apparently turning the tide and helping some of the Asian markets and European markets advance. In reaction to the upbeat comments by the lender, commodity prices have resumed their upward climb. Corporate tidings released during the day were upbeat, with ConAgra (CAG) and KarMax (KMX) releasing forecast-beating results.

A housing market report to be released shortly after the market open and the results of Treasury auctions could also impact market movement. That said, the extremely cautious mood that has been latent, but masked by recent positive economic readings should manifest itself amid the 2-day FOMC meeting, which kick starts today.

After opening sharply lower on Monday, weighed down by lower commodity prices and a negative lead from the overseas markets, the major U.S. averages snapped back some of their losses by early afternoon trading. While the Nasdaq Composite recovered and traded with modest gains for most of the afternoon, the Dow Industrials and the S&P 500 Index stayed below the unchanged line throughout the session.

The Dow Industrials closed down 41.34 points or 0.42% at 9,779 and the S&P 500 Index receded 3.64 points or 0.34% to close at 1,065, while the Nasdaq Composite advanced 5.18 points or 0.24% to 2,138.

Twenty-one of the thirty Dow components ended the session lower, with American Express (AXP) (down 2.90%), Bank of America (BAC) (down 2.16%), Caterpillar (CAT) (down 1.80%), Disney (DIS) (down 1.55%), Coca-Cola (KO) (down 1.41%) and McDonald’s (MCD) (down 1.51%) declining sharply in the session. On the other hand, Cisco Systems (CSCO), General Electric (GE) and Wal-Mart Stores (WMT) showed notable advances.

The Philadelphia Oil Service Index fell 1.24% and the NYSE Arca Gold Bugs Index declined 1.52%. The Philadelphia Housing Sector Index moved down 2.34%. However, the NYSE Arca Airline Index rallied 4.38% and the NYSE Arca Computer Hardware Index and the NYSE Arca Networking Index gained a little over 1% each.

On the economic front, the Conference Board said its leading indicators index rose for the fifth straight month in August. The index rose 0.6%, a tad below the expected growth of 0.7%. However, the previous month’s growth was revised upwards by three tenths of a percentage points to 0.9%. Interest rate spread, stock prices and the pace of deliveries were the strongest positive contributors to the index, while the M2 money supply served as the biggest drag. While the coincident economic index was unchanged in August, the lagging economic index eased 0.1%.

Get our Daily Trade Signals and Grain Newsletter along with a copy of the CBOT Introduction to Agricultural Futures and Options Book for Free! The grain trading professionals at MF Global can guide you in the right direction with your trading. Click here to Get your Free Grain Trading Kit Today

Resource Stocks Could Lead TSX Higher

Canadian stocks will look to rebound on Tuesday as commodities have bounced back from recent slides. The Bay Street market has edged lower in three straight sessions.

Crude oil has rallied $1.47 to $71.18 per barrel in electronic trading. Gold has jumped $14.70 to $1,019.60 a barrel and copper has surged 7.85 cents to $2.884 per pound.

On the economic front, Canadian retail sales fell 0.6% in July, compared to a 1% rise in the previous month. Sales were expected to rise 0.5%. Excluding autos, sales fell 0.8%, compared to a revised 1.1% increase in June.
 
In corporate news, Canadian Hydro Developers announced has received further buyout proposals and that rival TransAlta is no longer in the lead.

Axia NetMedia Corp.  reported net income for the fourth quarter of C$412,000 or C$0.01 per share, compared to C$1.48 million or C$0.02 per share in the year-ago quarter.

Linamar Corp. and Canadian Prime Minister Stephen Harper on Monday announced a partnership to invest in Linamar's Green & Fuel Efficient Powertrain Project.

Currency, Commodity Futures

In their first day as the front-month contract, crude oil futures for November delivery are trading up $1.54 at $71.25 a barrel. The October futures ended down $2.33 at $69.71 a barrel on Monday.

Gold futures, which fell $5.40 to $1,004.90 an ounce in the previous session, are currently rising $12.90 to $1,017.80 an ounce.

On the currency front, the U.S. dollar is trading at 91.28 yen compared to the 91.929 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.4785.

Click Here

Asian Markets End Mixed Amid Cautious Trading

The major Asian markets, open for trading, ended mixed on Tuesday as traders exercised caution and adopted a wait-and-watch attitude looking for direction. The markets in Japan and Indonesia were closed for public holidays. Among the other markets, Australian, Chinese and Taiwanese markets ended in negative territory, while the markets in Hong Kong, India, South Korea and Singapore ended in positive territory.

In Australia, the benchmark S&P/ASX200 Index slipped 0.29% or 13.70 points to close at 4,664, while the All-Ordinaries Index ended at 4,671, representing a loss of 13.00 points, or 0.28%.

On the economic front, the Australian Bureau of Agriculture and Resource Economy predicted that commodity exports might rake in A$158.31 billion in the current fiscal year that started July 1, down an annual 20% thanks to a global decline in commodity prices. Mineral exports were projected at A$123.46 billion, the data showed, down 23% on year. For 2009-10, gold output is expected to add 15% to 251 tons, the data showed, while copper output is forecast to climb 9% to 1 million tons.

Light sweet crude oil futures for October delivery ended at $70.08 a barrel in electronic trading, up $0.38 per barrel from previous close at $69.71 a barrel in New York on Monday.

Metals and mining stocks ended weaker. BHP Billiton edged down 0.21%, Rio Tinto slipped 0.54%, Gindalbie metals fell 3.05%, Iluka Resources slipped 1.79%, Mincor Resources lost 2.52% and Oz Minerals shed 1.68%. However, Fortescue Metals bucked the trend and rose 0.95%.
 
Retail stocks ended in negative territory as traders preferred to lock-in gains following recent gains and move to sidelines. David Jones lost 3.17%, Harvey Norman fell 2.12%, Wesfarmers edged down 0.23% and Woolworths slipped 0.38%.

Oil and energy related stocks also ended in negative territory. Woodside Petroleum shed 1.35%, Santos lost 1.24%, Oil Search declined 1.25% and Origin Energy fell 1.60%.

Mixed trading was witnessed among the banking stocks. While ANZ Bank added 0.78% and Westpac Banking Corp. edged up 0.32%, Commonwealth Bank of Australia slipped 0.06% and National Australia Bank shed 0.24%.

Gold stocks also ended mixed. While Lihir Gold advanced 1.35% and Newcrest Mining rose 1.11%, Sino Gold Mining bucked the trend and slipped 0.14%.

In Hong Kong, the Hang Seng Index ended in positive territory with a gain of 228.29 points, or 1.06%, at 21,701, on bargain-hunting as traders were increasingly optimistic about the prospects of global recovery. Mixed closing in the U.S and weak trading in mainland China failed to impact traders' optimism as bargain hunting in select stocks lifted the market sentiment.

As many as 35 of the 42 components in the index ended in positive territory. China Mobile advanced 2.42% after announcing that it added more number of customers during August.

Airline stocks advanced following a drop in crude oil prices in the international market on Monday. Cathay Pacific advanced 3.51%.

In South Korea, the benchmark KOSPI Index surged past the psychological 1,700-mark and ended at a 15-month high of 1,719, representing a gain of 23.38 points, or 1.38%, on fresh buying interest evinced by foreign institutional investors. Upgrades by brokerages on select companies lifted the market sentiment. Citigroup raised the price estimate for Samsung Electronics on higher chip prices, following which the stock surged up 3.38%. Automakers also advanced on increasing confidence about pick-up in demand in the U.S market, its biggest export destination.
 
Consistent buying across the sectors all through the day helped the Indian market end at a fresh 16-month high on Tuesday. Finance Minister Pranab Mukherjee's assurance on the continuance of stimulus measures for some more time, encouraging reports on corporate advance tax payments and an upward revision of India's growth outlook by the Asian Development Bank helped improve sentiment. The BSE Sensex finished at 16,886, up 145 points or 0.87%, while the S&P CNX Nifty rose 44 points or 0.89%.

Among the other major markets in the region, China's Shanghai Composite Index declined 2.34% or 69.46 points to close at 2,897 and Taiwan's Weighted Index ended fell 33.43 points, or 0.45% to 7,469. The Indonesian market is closed for public holiday and Singapore's Strait Times Index advanced 1.42% or 37.72 points, to close at 2,686.

Come Into the LIVE Online Trading Session and Watch Us Make at Least 1 Point ($500 - $2000 a Day). The LIVE Trading Session is Completely FREE! - Sign Up Now here!

The major European markets are rebounding on Tuesday following two straight sessions of losses. After opening higher, the major European averages rose further before moving sideways.

Currently, the French CAC 40 Index is gaining 0.79%, the German DAX Index is moving up 1.21% and the U.K.’s FTSE 100 Index is advancing 0.85%.

Financial, technology and transportation stocks are leading the upside in Germany, with Lufthansa advancing over 4%. The French market is also seeing a broad based advance. Heavily weighted mining and oil stocks were among the biggest advancers in the U.K.

U.S. Economic News

At 10 am ET, the Federal Housing Finance Agency is due to release its house price index, which covers single-family housing and is based on transactions involving conforming conventional mortgages purchased or securitized by Freddie Mac and Fannie Mae.

The results of the treasury auctions of 52-week bills and 2-year notes are due out today.

Earnings

ConAgra said its first quarter earnings fell to 37 cents per share from 94 cents per share in year-ago period. The recent quarter’s results included a charge of 1 cent per share. Revenues declined 3% to $2.96 billion. The consensus estimates had called for earnings of 34 cents per share on revenues of $3.09 billion. The company raised its adjusted earnings estimate for the full year to $1.70 per share from its earlier estimate of $1.63-$1.66 per share, while analysts estimate earnings of $1.66 per share.

CarMax reported that its second quarter net sales rose 13% to $2.08 billion. Net income rose to 46 cents per share, including a gain of 10 cents per share, from 6 cents per share in the year-ago period, when the company took a charge of 8 cents per share. Analysts estimated earnings of 18 cents per share on revenues of $1.77 billion.

Here are 10 simple Dos and Don’ts any investor can follow which may contribute to potential for success in trading futures. This FREE guide can provide some of the basic principles that traders inherently live by.

Click Here to Request Your Free Guide!

Lowe’s is likely to see some activity after it said its continues to expect fiscal year 2009 earnings of $1.13-$1.21 per share and sales to decline by 3%. Analysts estimate earnings of $1.20 per share on 2.8% decline to $46.86 billion. For the fiscal year 2010, the company expects earnings of $1.24-$1.34 per share and sales growth of 3%-4%. The consensus estimates call for earnings of $1.34 per share on revenue growth of 3.5% to $48.48 billion.

Edwards LifeSciences is likely to be in focus after it said a survival rate of 65% was observed after two years in patients using its aortic valve delivered through the femoral artery and who were considered either non-operable or at very high surgical risk for the treatment of severe aortic stenosis. The company also said recent analysis of data on 130 patients enrolled in the PARTNER EU clinical trial continued to show positive quality of life measures at 12 months.

Allegheny Technologies is likely to see activity after it said it expects to purchase the assets of Crucible Compaction Metals and Crucible Research for $40.95 million consequent to the auction held as a part of a U.S. Insolvency Court proceeding on September 21st, 2009. The company expects the deal to close before October 31st, 2009.

Diedrich Coffee may also be in focus after it said its fourth quarter revenues rose 57% to $20.1 million. The company reported earnings of 45 cents per basic share compared to a loss of $1.86 per basic share in the year-ago period. On an adjusted basis, the company reported earnings of 29 cents per basic share compared to a loss of 37 cents per basic share last year. For the full year, the company expects revenues of $90 million to $95 million and GAAP earnings of 90 cents to $1 per share.

Flir Systems may gain ground after it announced that it has been awarded a new delivery order totaling $15.4 million from the U.S. Army Aviation and Missile Command in Huntsville, Alabama for its Star SAFIRE stabilized multi-sensor systems. The company said the delivery order would be completed within the next twelve months at its Oregon facility.

Louisiana-Pacific is likely to see weakness after it announced that it would offer 18 million shares. The company intends to use the net proceeds from the offering to reduce debt by retiring up to 35% of its senior secured notes due 2017 and for general corporate purposes.

American Airlines may also recede after it announced the offering of 30 million shares and $250 million worth of convertible senior notes due 2014. The company noted that neither of these offerings is contingent upon the consummation of the other offering.

Pfizer and Wyeth are expected to be in the spotlight after they said they have entered into an agreement with Boehringer Ingelheim to sell certain animal health assets in connection with the regulatory process associated with Pfizer’s pending acquisition of Wyeth.

Our informative 24”x36” wall chart explores 40 years of historical market data on Crude Oil, Gold and S&P500 markets, and includes historical event call-outs. It’s a great trading and analytic tool for professional and beginner traders.

Sign up here to receive your chart today!

Investors Hub Services