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Jun 8, 2015

ADVFN Newsdesk - Markets Bracing For Nervous Session

 
ADVFN  World Daily Markets Bulletin
Daily world financial news Monday, 08 June 2015 10:01:01   
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US Market
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The major U.S. index futures are pointing to a lower opening on Monday, with sentiment reflecting the uneasiness of traders. Chinese trade data was mixed, with imports plunging sharply, resulting in a bigger surplus for May. Meanwhile data out of Japan showed that first quarter growth was stronger than initially estimated. Notwithstanding the strong German trade and industrial production data, the mood in Europe is downbeat, as Greece poses a threat to the stability of the euro area by virtue of its debt crisis. Bond yields are up and the dollar is retreating. The domestic markets could brace for a lackluster session in the wake of the absence of any major catalysts.

U.S. stocks retreated in the week ended June 5th, as uncertain domestic economic outlook and Greek debt fears stifled risk appetite in the markets.

Last Monday, stocks rebounded from a 2-session slide, helped by mostly positive economic data and some M&A announcements. The rise in bond yields pressured stocks on Tuesday, sending them modestly lower. The major averages benefited from positive domestic economic data on trade balance, private payrolls and manufacturing activity and ended Wednesday's session higher.

Risk aversion in the aftermath of the prolonging Greek debt crisis and concerns over domestic monetary policy and economic outlook sent stocks notably lower. Stocks traded in a lackluster manner in the wake of the strong non-farm payrolls report before ending mixed.

For the week ended June 5th, the Dow Industrials and the S&P 500 Index fell 0.90 percent and the S&P 500 Index slid 0.70 percent, while the Nasdaq Composite down a more modest 0.03 percent.

Among the sector indexes, the Dow Jones Utility and the NYSE Arca Gold Bugs Index fell 4.09 percent and 4.36 percent, respectively for the week. Additionally, the Philadelphia Semiconductor Index and the NYSE Arca Oil Index slipped 2.57 percent and 1.07 percent, respectively. On the other hand, the NYSE Arca Securities Broker/Dealer Index added 3.19 percent. The KBW Bank Index and the Dow Jones Transportation Average rose over 2 percent each.


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US Economic Reports
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The unfolding week's economic calendar is light, although there are a handful of key economic data. The focus is likely to be on the Commerce Department's retail sales report for May, the jobless claims report and the results of a consumer sentiment survey by the University of Michigan.

The Commerce Department's wholesale and business inventories reports for April, the Labor Department's export and import price index for May, the Labor Department's producer price index for final demand and the results of its auction of 3-year and 10-year notes round up the economic events of the week.


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Stocks in Focus
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Sears Holdings reported a loss on an adjusted basis for the first quarter, while its revenues declined year-over-year. Comparable store sales fell 10.9 percent.

Synopsys announced an agreement to buy privately held Atrenta, a SoC realization solutions provider for the semiconductor and consumer electronics industries. The company did not disclose the terms of the deal, while the transaction is expected to close in the summer of 2015.

Piedmont Natural Gas reported better than expected second quarter earnings, while its revenues missed estimates. The company reaffirmed its 2015 earnings per share guidance.

Casey's General, Christopher & Banks, FuelCell Energy, H&R Block, Pep Boys and United Natural Foods are among the companies due to release their quarterly results after the close of trading.


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European Markets

European stocks opened lower and are continuing to languish in negative territory, as traders ponder over the developments in Greece and the German trade data.

The two parties involved in the Greek debt talks, the Greek government and its international lenders are continuing to have diverging views. The former has accused the creditors of their intransigent stance, while the latter has accused Greece of distorting proposals by international creditors for a cash-for-reform deal.

In corporate news, Deutsche Bank announced the resignations of its co-Chief Executive Officers Anshu Jain and Jorgen Fitschen, and said they would be replaced by John Cryan, effective July 1. Air France-KLM said its traffic for May rose 1.9 percent year-over-year and capacity was up 1.1 percent, while its load factor was up 0.7 percentage points to 84.8 percent.


On the economic front, preliminary data released by the German Federal Statistical Office showed that German exports rose for the third straight month in April, rising 1.9 percent month-over-month, faster than April's 1.3 percent increase. Economists expected a 0.4 percent drop. Imports fell 1.3 percent, belying expectations for a 0.5 percent increase. The trade surplus increased to 22.3 bil euros from 19.3 bil euros in the previous month.


German industrial production grew more than expected in April, data from Destatis revealed. Industrial production expanded 0.9 percent month-over-month in April, reversing the revised 0.4 percent fall in March. It was larger than an expected 0.5 percent increase and also the biggest growth seen so far this year.
Sentix's investor confidence index for the eurozone fell to 17.1 in June from 19.6 in May. This was the lowest reading since February, when the score was 12.4.


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Asian markets
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The major Asian markets ended mixed, as risk aversion caught hold of most markets in the region, while China and Hong Kong rallied on strong trade data released by China. The New Zealand and Taiwanese markets also advanced modestly.

Australia's All Ordinaries moved back and forth across the unchanged line in a wide range before retreating decisively into negative territory in the afternoon. The index ended down 4.8 points or 0.1 percent at 5,507. Weak import data out of China also impacted sentiment in Australia, which exports much of commodities to China. Energy, financial and IT came under selling pressure, while consumer, healthcare and industrial stocks gained ground in the session.

After a strong start, Japan's Nikkei 225 average slipped below the unchanged line in late morning trading. After a steep drop, the average recouped some of the losses by the mid-session amid the release of the Japanese GDP data. Nevertheless, the index see-sawed through the remainder of the session before ending up 3.71 points or 0.02 percent at 20,457.

Construction, paper, pharma, while resource and export stocks ended on a mixed note.

Hong Kong's Hang Seng Index ended 56.12 points or 0.21 percent higher at 27,316 and Chiina's Shanghai Composite added 108.78 points or 2.17 percent before closing at 5,131.

On the economic front, revised report released by Japan's Cabinet Office showed that the nation's first quarter GDP rose at a revised 3.9 percent year-over-year rate compared to the 2.4 percent estimated initially and the 2.8 percent growth forecast by economists. Sequentially, the economy expanded an annualized 1 percent, ahead of the 0.7 percent growth expected by economists. The upward revision reflects stronger than initially estimated capital spending.

Japan's current account surplus declined to 1.326 trillion yen in April compared to the previous month and came below economists' expectations, data from the Ministry of Finance showed Monday. A reversal in the balance of trade to a deficit from a surplus impacted the current account balance.

Meanwhile, data released by the Bank of Japan showed that bank lending rose at a steady pace of 2.6 percent year-over-year in May. The increase was in line with estimates.

The results of a survey by the Cabinet Office showed that a measure of people's assessment of the Japanese economy unexpectedly declined in May. The current conditions index of the Economy Watchers' survey eased 0.3 points to 53.3 in May.

Data released by the General Administration of Customs showed that China's trade surplus came in at a more than expected $59.49 billion, as imports plunged 17.6 percent year-over-year compared to a more modest 2.5 percent drop in exports.


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Currency and Commodities Markets

Crude oil futures are slipping $0.23 to $58.90 a barrel after ending down $1.17 or 1.94 percent to $59.13 a barrel in the week ended June 5th. Last Monday, oil slid modestly, reversing some of the previous week's advance. The commodity added over $1-a-barrel on Tuesday.

After declining by over $1.50-a-barrel on Wednesday in the wake of a stronger dollar, the commodity fell by over $1.50-a-barrel on Thursday. Oil reversed course and climbed moderately on Friday, helped by the non-farm payrolls report, which propped up the dollar.

Gold futures, which fell $21.70 or 1.82 percent to $1,168.10 an ounce in the previous week, are currently rising $3.10 to $1,171.20 an ounce.

Among currencies, the dollar ended mixed in the week ended June 5th, with the currency slipping 1.13 percent against the euro to $1.1114. At the same time, the greenback gained 1.23 percent against the yen before ending the week at 124.10 yen.

The U.S. dollar is currently at 125.23 yen and is valued at $1.1188 versus the euro.


 
 

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