Australia | Nov 08 2012
By Max Ludowici, Equities & Derivatives Advisor, 708 Capital
The market pared early losses following a savage night on The Street amid concerns about the political landscape in the US. The market hit an intraday low of 4460 in early trade and ended the day down 32 points or 0.7% to 4502 points. Expectations were for a more severe sell-off in our market as investors mull over another four years of an Obama led government but we seemed only to trade sideways for the second half of the session. Following a fairly muted response to the US election outcome yesterday where most indexes reversed early losses to end the trading day in positive territory, concerns about the much discussed ‘fiscal cliff’ were thrust back into the spotlight as the DOW suffered its biggest one 1 day drop in a year. Asian markets fell in sync roughly 1%, but declines were moderate compared to those across the Atlantic.
Today’s unemployment data release showed that the labour market is continuing to struggle amid a weakening economic climate. The jobless rate held steady at 5.4% reinforcing the RBA’s decision to leave the cash rate unchanged at Tuesday’s monthly board meeting. Whilst the figures showed that 10,000 new jobs were added, they were hardly anything to write home about. At an annualised pace this results in an employment growth figure of 1.1% but when you put this in the context of a population base expanding at a rate of 1.8% this means we’re actually going backwarsd.
The next piece of political uncertainty is expected to be partly resolved after today, as China’s party congress has begun in Beijing.
The AUD bounced around following the jobless rate announcement initially jumping a quarter of a US cent on the next before trading lower over the afternoon.
We were expecting a fairly quiet week volume wise so today’s weak session has come as no surprise.
DOW futures were in the green for the majority of the day and are currently 51 points higher
This article produced at the request of and is published by FNArena with the expressed permission of 708 Capital.
708 Capital is a full service stockbroking and investment advisory firm. 708 offers investment and market advice to high-net-worth Private and Institutional clients in Australia and across the globe. 708's extensive network of contacts gives its clients exclusive access to ground-level fundraising opportunities and new company listings in a variety of small and large cap ASX listed companies. 708 has a longstanding track record of generating exceptional returns for its clients. Click here 708capital.com.au/contact-us/ for a no cost consultation and portfolio review or to learn more visit www.708capital.com.au. Note: 708 Capital offers wealth management services for Sophisticated and Wholesale Investors only. We cannot assist investors who aren’t classified as Sophisticated Investors or have verified assets over AUD$2.5m.
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