Daily Market Reports | Nov 01 2012
By Greg Peel
The Dow closed down 10 points, or 0.1%, while the S&P was up a point to 1412 and the Nasdaq lost 0.4%. All prices are relative from Friday's close.
It required an around the clock effort from staff, and power from back-up generators, but after the two day shut-down forced by the Storm formerly known as Hurricane Sandy, the New York Stock Exchange reopened for business last night. The next issue was as to whether any floor operators would be there to provide markets, but by hook or by crook they were – some sleeping at the exchange overnight and others battling through the damage in the morning, unable to access trains, subways, tunnels and some bridges.
Volume had been expected to be light, but by day's end it was quite reasonable. Traders weighed up the cost of Sandy in damages and lost revenues against the economic growth boost potential of rebuilding and restocking. Insurers were understandably sold off, while home building suppliers such as Home Depot (Dow) were well supported.
There was also a slew of September quarter earnings reports to catch up on, with carmakers General Motors and Ford (Dow) both surprising to the upside and enjoying solid share price gains. Economic data releases were also overdue, and last night the Case-Shiller house price index showed a 2.0% increases in prices in the largest 20 cities, marking the biggest gain since July 2010. The Chicago PMI business measure ticked up to 49.9 from 49.7.
It seemed for all the world like a market and a financial centre back to normal, and that's just what New Yorkers wanted the world to see. But things are far from “back to normal” in the region, with power still out in many areas including the financial district, public transport still absent and a flooded subway with no reopening time in sight, tunnels flooded, bridges restricted, and fuel supplies running low or inaccessible due to lack of power. Many trading and investment firms are operating on back-up systems, from remote recovery complexes, from home, or not at all. La Guardia airport remains closed albeit JFK is hopeful of reopening, and while the New York Marathon will go ahead as planned on Saturday, it will likely be devoid of foreign and interstate competitors and may more closely resemble a steeplechase.
Aside from presenting a stoic front, the NYSE was desperate to reopen last night to provide for end of month trading and portfolio marking to market. There was a level of push-pull throughout the session before the flat close. Tonight may see volumes drop off again as traders and investors decide the reopening of positions for the new month can wait till next week, although there is a substantial round of US and global economic data to wade through over the next two sessions.
At this stage there appears to be no intention to shift election day from next Tuesday.
Markets elsewhere were quiet last night, although the reopening of Nymex floor trading rather than just electronic trading provided gold futures with an impetus that pushed the physical spot gold price up US$10.90 to US$1720.90/oz despite a little changed US dollar index (79.92). The Aussie is a tad higher at US$1.0380.
Base metal movements were minimal in London and the oils traded off, with Brent down US54c to US$108.54/bbl and West Texas up US47c to US$86.15/bbl. Spot iron ore lost US50c to US$119.30/t.
US bond trading also resumed after the break, and there was some shifting into the safe haven seen with the jobs report out on Friday and the election due next week. The ten-year yield dropped 6bps to 1.69%.
The SPI Overnight lost 5 points or 0.1%.
Today and tonight we'll see the global round of manufacturing PMIs, although this month the eurozone is reporting a day late. So it's Australia and China today and the UK and US tonight.
In the US, the Conference Board consumer confidence measure and the ADP private sector jobs number have been held over to tonight. On the calendar we also find construction spending along with chain store and vehicle sales although those last two may just need to be postponed, one might assume. The non-farm payrolls number will come out as scheduled on Friday night.
Happy November.
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