Daily Market Reports | Nov 19 2008
By Rudi Filapek-Vandyck
The DJIA rose 1.8% to 8421, with the S&P500 adding 1.0% to 858. The Nasdaq ended flat at 1483.
FNArena is this morning battling the most evil of all evils: computers that refuse to do what they are designed for. Hence why our daily Overnight Report appears in a shortened version.
US shares ended on a positive note this morning (Sydney time) as the final hour of trade saw something different, for a change. Instead of sellers coming in and pushing share prices lower, this time buyers moved in and turned what seemed like another guaranteed loss into a solid profit for the day.
For a while it appeared the Dow would close higher and other indices such as Nasdaq and S&P500 would not, but all was well and in line at the closing bell. Wall Street has finally ended a volatile trading day with a positive gain and that is, given the stockmarket’s recent track record, almost something to celebrate.
Though Dow component and major technology bellwether Hewlett Packard injected some positive stimulus early in the market by declaring things have been tracking better than what the market had been expecting, a much lower than expected producer prices index reading soon dampened all investor enthusiasm.
Meanwhile, US senators and the soon departing Bush government are busy discussing how, what, when and why the US car industry should be kept from falling over. Do we need to save companies that obviously cannot make their businesses viable? Is any of them too big to fail?
Everyone on Wall Street has an opinion these days. With new president elect Barack Obama soon in charge, and thus a new leader with strong links to the unions in the US, it is almost seen as a fait accompli that US jobs in the car industry will be given highest priority. Whether this will actually save the industry in the longer run remains an item of public debate.
Greg Peel is attending a miner’s conference in Sydney today. Overnight prices will be updated on the website as soon as our failing technology will allow us to do so.
Oil and metals closed lower, but off their lows earlier in the session.
Crude oil futures for December delivery ultimately fell 1.2% to US$54.25 a barrel. Spot gold ended 0.3% lower at US$735.55 an ounce. LME copper prices mirrored moves in the equity markets in volatile trading, initially rebounding before closing 4.2% lower. Nickel and tin also fell, falling 3.2% and 1.4% respectively.
US wheat futures rose 2.5%, whilst soybeans and corn were weak, falling 0.4% and 0.7% respectively on speculation that good weather conditions will allow farmers to accelerate harvesting of crops.
US Treasury bond yields fell overnight as declines in equities and more signs of pressures in emerging markets increased demand for safe haven assets. Softer than expected headline PPI data and the fall in the NAHB housing sentiment index to a record low also added to the bid tone. The 2-year yield fell 4bps to 1.13%, a fresh 5-year low and the 10-year yield fell 11bps to 3.54%.
