Daily Market Reports | Oct 12 2010
By Greg Peel
The Dow closed up 3 points while the S&P was flat at 1165 and the Nasdaq was also flat.
Columbus Day is one of those half-holidays in the US which makes one wonder why Wall Street bothers. Banks are closed, the bond market is closed, and thus the stock and commodity markets do very little. Volume on the big board was at its lows around 800m and the Dow managed to move around in a 50 point range before ending square. There were no economic releases or earnings reports of any note.
About the only point of interest was a sudden “surge” in the US dollar index around 10.30am which may have been one decent order in a thin market, but which ensured the index closed up 0.3% to 77.50. Other major currencies were commensurately lower and the Aussie slipped 0.2 of a cent to US$0.9836.
Base metals in London hardly troubled the scorer and oil fell US45c to US$82.21/bbl.
Gold ignored the dollar and moved higher again anyway, perhaps in deference to Captain Christopher? Gold was up US$6.70 to US$1353.70/oz.
The SPI Overnight rose 3 points.
It was politics that drew more headlines last night, with debate now raging in the US over moves by major banks to place a moratorium on mortgage foreclosures. This is not an attempt to stem the slide in the housing market but a problem with errors discovered in some foreclosure procedures. Of all homes sold in the US in the June quarter, one in four are now in foreclosure and many perhaps erroneously so. On that basis, banks have called a halt.
The halt has caused widespread concern from Wall Street to the White House. Analysts worry that with the housing market in such a fragile state, confusion is not going to help. Nor will stalling the foreclosure process if a lifting of the moratorium suddenly leads to a rush of foreclosures, or if buyers simply back off on concerns they may be foreclosed for the wrong reason. It is yet another problem the Obama Administration really doesn't need going into the mid-term elections.
And it was fun to watch our own Treasurer being interviewed on CNBC this morning. Whether it's Scott Wapner or Kerry O'Brien, Wayne Swan will still look uncomfortable on questions regarding the global financial markets. The election campaign may be over but Swan still responds as if someone is pulling the string in his back, making identical, well rehearsed and not necessarily relevant responses to a range of different questions.
Dow component Intel will report third quarter earnings in the US tonight and as anticipation builds, analysts are suggesting Q3 earnings in general have scope to surprise to the upside. Goldman Sachs is among those talking up the prospects.
The Fed will also release the minutes of its last FOMC meeting tonight which Wall Street will be closely scrutinising, probably in vain, for more clues on QE2 and its timing.
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