Daily Market Reports | Mar 17 2015
By Greg Peel
The Dow rose 228 points or 1.3% while the S&P rose 1.4% to 2081 and the Nasdaq added 1.2%.
Bounce Back
Bridge Street tumbled on the open on Friday morning, initially adjusting to a slew of ex-dividends but going on with it on the back of a weak session on Wall Street. At 43 points down, it looked like it could be an ugly day for the ASX200. The energy sector copped a beating on another big fall in the oil price.
But the buyers appeared once more to force a recovery to only 16 points down by the close. Energy remained the hardest hit sector at 2% down but elsewhere the picture was inconsistent. Utilities and the telco were down 1%, suggesting ongoing concerns over valuations, but consumer discretionary was also down 1% amongst a mixed bag of sector moves.
There was potentially some impetus to buy following the wrap-up of China’s People’s Congress on the weekend at which the premier assured there were “plenty of tools in the toolbox” to turn around China’s flagging economy. Yet the materials sector remained weak on a 0.8% fall.
Europe Surging
While Wall Street bemoans the impact of an ever rising US dollar, European markets continue to enjoy the benefits of the reason for the greenback’s rise – the collapsing euro. The German stock index rose 2.2% last night to breach 12,000 for the first time and provided impetus for Wall Street to follow suit. The volatility continues in New York where the Dow has returned to the pattern seen earlier in the year, being triple digit moves in both directions day by day.
The uncertainty behind such volatility is clearly linked to the Fed, which will release its latest policy statement on Wednesday night. Will the word “patient” be dropped, or not? And what does it either mean or matter? No one is entirely sure. What is certain is that US economic data releases continue to disappoint outside of the monthly jobs numbers. Last night saw January industrial production up a weaker than expected 0.1%, while the Empire State activity index fell to 6.90 from 7.78 when an increase was forecast.
The oil price also continues to be a bone of contention.
New low for WTI
West Texas crude traded to a new six-year low last night before recovering slightly to US$43.82/bbl, down US$1.18 or 2.6%. Brent fell US$1.38 or 2.5% to US$53.17/bbl.
The plunge was contributed to ongoing concern over the International Energy Agency’s warning last week that prices cannot rebound while the supply glut continues to work through the system.
Metals
LME traders are eagerly anticipating the outcome of the Fed meeting but in the meantime base metals prices are shuffling up and down without really going anywhere. Last night copper was steady, while tin gained 1% as nickel and lead each fell 1%.
Iron ore was unchanged at US$58.10/t.
Gold is down US$3.90 to US$1154.70/oz.
A mix of commodity price movements suggests little impact from a 0.5% fall in the US dollar index to 99.70. The Aussie is steady at US$0.7643.
Today
The SPI Overnight closed up 46 points or 0.8%.
The minutes of the March RBA meeting will be released today and the market will be looking for clues as to when the central bank may cut again.
The Bank of Japan will hold a policy meeting today. Will it be forced to counter the ECB’s QE program?
The eurozone sees inflation and unemployment data tonight along with the ZEW investor sentiment survey.
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