Tag Archives: Precious Metals

article 3 months old

The Overnight Report: Oh Won’t You Stay

By Greg Peel

The Dow closed up 213 points or 1.2% while the S&P gained 1.4% to 20176 and the Nasdaq jumped 2.0%.

Reprieve

Had I been writing this Report yesterday evening I would have suggested the local market looked very vulnerable. Last Friday we saw a market looking very much like it wanted to go up, supported by recent developments in monetary policy. On Monday we plunged from the open but immediately the technical buyers stepped in.

But that rebound faded in the afternoon. Yesterday we saw another attempt to recover from early sogginess before a sharp fall towards the closing bell. That drop ensured a close under 5300, and that is technically weak. Markets that want to go up but can’t find support tend to swiftly become markets that go down.

Had the Dow been down two hundred points this morning it would have been Goodnight Irene. But the Dow is up two hundred points so the local market is in for a reprieve. The futures are up 75 points this morning.

Yesterday saw only healthcare and utilities hold up against a tide of weakness elsewhere. Energy saw the biggest fall of 1.3% on a lower oil price, but oil is strong this morning. Materials responded to a weaker iron ore price and that was weak again overnight, albeit the two big miners rallied in London.

The telcos finally caved with a 1.0% fall and it's surprising that hadn’t happened earlier, given Telstra’s outage woes.

All of the above will prove academic today.

More enduring is RBA governor Glenn Stevens’ suggestion in a Q&A yesterday that inflation in Australia is too low, and that RBA still wants to see it back above 2%. This implies another rate cut is on the cards, and as such the index did jump higher, briefly, at lunchtime yesterday, before selling again overwhelmed.

The Aussie also dutifully dropped on Stevens’ comments, despite the fact the market has already baked in another rate cut and that’s what had us down at 72 in the first place. Strength in the greenback overnight had the Aussie falling as low as 71.4 before it stabilised, down 0.6% over 24 hours at US$0.7184.

Risk On

There’s been a lot of concern of late about the upcoming Brexit vote, much Chicken Little commentary and speculation the Fed will remain on hold until after the referendum just in case the world goes to hell in a handcart. Polling, up to now, has favoured the “stay” vote, but inconclusively so.

The latest poll released last night has inspired confidence in there being no Brexit. It showed “stay” at 55% and “go” at 42% -- the widest margin to date. Importantly, the poll only recorded the intentions of those who definitely plan to vote, and for the first time the “stay” vote outweighed the “go” vote in the over-65 cohort.

The fear has been that the “goers” would be more likely to come out to vote than the “stayers”, and that there would be a greater nationalistic fervour among older Britons. Last night’s poll eased those fears.

And subsequently eased market fears, both in London and across the Channel. The FTSE jumped 1.4%, the German DAX 2.2% and the French CAC 2.5%.

That sense of relief then flowed across the Pond. But if that wasn’t enough, data released before the opening bell on Wall Street revealed US new home sales jumped 16.6% in April, the biggest monthly jump in 24 years.

(Keep an eye on those Aussie stocks with a finger in the US building materials pie today.)

For US home building stocks, it was off to the races. And for the rest of the market, the result was the same. But hang on…surely the strong home sales numbers give the Fed more reason to hike in June, and an easing of Brexit fears removes that particular barrier? Shouldn’t Wall Street crumble on rate hike fears?

Many believe this will likely still occur in the short term, were the Fed to hike next month. But in the wider scheme of things, such a solid new homes sales result suggests the US economy is actually at lot stronger than many had assumed – particularly those who up to now could see no economic reason why the Fed should feel the need to hike. And on a global scale, if there is to be no Brexit then that takes out a major concern that would otherwise have investors hiding on the sidelines.

Two sectors stood out last night – banks and tech. Rate hikes are good for banks. Tech represents the epitome of the “risk on” trade, being for the most part very speculative. But “tech” includes names like Apple, and when the biggest stock in the market rallies hard, there’s a big impact on the indices.

Yet it wasn’t really a “rally”, per se. The Dow shot up 200 points from the opening bell and stayed there all day. Volumes were not particularly heavy. It is thus most likely, commentators agreed, that last night was more about short-covering than anything else.

Commodities

It also didn’t hurt that West Texas is up US$1.00 or 2% after a couple of soggy sessions, to US$49.11/bbl, and Brent is up US76c at US$49.13/bbl – as good as parity. The strong home sales data feeds back to expectations of stronger oil demand.

Base metal prices could fare no better than mixed in London nevertheless. Copper and nickel are up around half a percent and aluminium, lead and zinc are down around half a percent.

Iron ore fell another US$2.50 to US$50.20/t.

The US dollar index is up 0.4% to 95.59 on rate hike expectations, thus gold is down US$21.30 at US$1226.90/oz.

Today

The SPI Overnight closed up 75 points or 1.4%.

Locally we’ll welcome the numbers for March quarter construction work done today, which feed into tomorrow’s capex data. Otherwise, it’s quite a busy day on the local stock front.

Programmed Maintenance ((PRG)) will release its earnings result. Investor days will be held by all of Boral ((BLD)), Suncorp ((SUN)) and WorleyParsons ((WOR)), while Perpetural ((PPT)) will provide an update on its investment division.

Adelaide Brighton ((ABC)) and G8 Education ((GEM)) are among a handful of companies hosting AGMs today.
 

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article 3 months old

The Overnight Report: Waiting Game

By Greg Peel

The Dow closed down 8 points while the S&P lost 0.2% to 2048 and the Nasdaq fell 0.1%.

Contrast

What a difference a weekend makes. On Friday local investors steadily pushed the ASX200 up 0.5% to the close in a mostly straight line, with all sectors faring relatively equally. The session smacked of index buying. Yesterday, in stark contrast, was a rock’n’roll affair.

The index opened slightly higher before promptly falling 54 points to late morning. It then rallied to be back in the positive by 2pm before falling away again to the close, down 32 points. For the most part, the sector moves up on Friday were all largely reversed.

The exceptions were telcos, which held their ground, and energy, which dropped 2.0%. Analysts are quite happy with Oil Search’s ((OSH)) complex bid for InterOil but investors sold the stock down 3%. Individual company issues which were absent on Friday were back in force yesterday. Beyond Oil Search, we had a profit warning from Flight Centre ((FLT)), the fourth most shorted stock on the market, which fell 9%, and a profit upgrade from BlueScope Steel ((BSL)), which jumped 7%.

On Friday the focus appeared to be on the potential for ever lower rates from the RBA, despite a reasonable economy, and the benefits that might bring. Yesterday investors appeared concerned about commodity prices once again, as oil fails to push through 50 and iron ore futures took a tumble yesterday afternoon. Spot iron ore fell 5% overnight.

With macro fundamentals a difficult beast to grasp at present, the market seems unsure just what it should be doing. The bounce off the low yesterday before a rally back to square occurred when the index hit the 5300 mark, suggesting technical buying. With Wall Street flat overnight and equally unsure of direction, we may well be stuck in a range now for a while, notwithstanding any left of field developments.

June Looms

Brexit risk is increasingly on everyone’s minds. At this stage the polls favour the “stay” vote winning on June 23 but not by any clear margin. Given the referendum is not compulsory, “stay” supporters are concerned it benefits those with a more nationalist bent who may make a point of voting while the status quo-types may not be so committed. Whatever the case, it is as yet too close to call.

The Fed releases its June policy statement one week earlier. Wall Street generally believes the FOMC would not be inclined to cause potential turmoil with a rate hike if a week later a whole new round of turmoil manifests. If a rate hike is otherwise on the cards, it may come down to what the polls are saying as we get closer to the event.

Either way, Wall Street has swung from not expecting a rate hike until at least December to suddenly having to contemplate a hike as early as next month, with potentially more to follow. Yet not a helluva lot has changed in the interim. Wall Street is confused, and cautious.

Janet Yellen will speak on Friday night. It’s a full week away, but already in last night’s session talk is of the market not wanting to do anything bold until Yellen has her say. Recent Fedspeak has been decidedly hawkish but Yellen has a track record of appearing far more dovish than her voting members, seemingly always being the one to pour cold water on rate hike expectations.

We note also that the June Fed meeting is a quarterly, meaning updated economic forecasts and a press conference with the Chair. Often it is the conference and accompanying Q&A that sends markets off in a new direction, rather than the policy statement itself.

Commodities

West Texas crude rolled over into the July delivery front month last night and in so doing, closed the gap on Brent to a negligible amount. WTI is down US30c at US$48.11/bbl and Brent is down US50c at US$48.37. Hard to believe that spread was once US$27, although prices were a lot higher then.

The US dollar index is again steady at 95.24 and thus having no impact on commodity prices. LME traders remain just as cautious as everyone else and devoid of direction. Last night aluminium rose 1% while lead and zinc fell 1% and nickel fell 2%.

Iron ore fell US$3.00 to US$52.70/t.

Gold is down US$3.70 at US$1248.20/oz.

The Aussie is also steady, at US$0.7224.

Today

The SPI Overnight closed down one point.

As central bankers continue to dominate the markets they were once upon a time silent witnesses to, Glenn Stevens will speak today and take a Q&A.

Technology One ((TNE)) will issue an earnings result.

Rudi will Skype-link with Sky Business to discuss broker calls at 11.15am.
 

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available in the FNArena Cockpit.  Click here. (Subscribers can access prices in the Cockpit.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

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article 3 months old

The Monday Report

By Greg Peel

Buying Mode

There’s really not a lot to say about Friday’s action on the local market. The index rose relatively consistently throughout the session ahead of a bit of Friday-like afternoon profit-taking, while still closing on a robust 0.5% gain.

Every sector finished in the green. The only sectors not to rise at least 0.5% were financials, on 0.4%, and healthcare, on 0.3%, while at 1.3%, tiny info tech was the only sector to exceed 1.0%. Every other sector fell evenly between those two, suggesting Friday’s action was more about index buying than about individual company movements.

And why not? one might ask. What’s the alternative? A term deposit paying 2.5%? A government bond paying much the same over ten years? Both of which are taxable. While eight years down the track investors still shudder at the memory of their GFC experience, and still carry historically high levels of cash, the dividends available in the stock market -- many tax free -- are just too attractive to ignore.

And the latest game in town is How Low Can We Go? Most local economists had been for some time predicting the RBA would need to cut, but even they were taken by surprise by the May move. Now the race is on to predict further cuts, be it one, two or maybe three, down to 1.00%. Those dividends are looking even better.

The ASX200 finished the week at 5350, which is basically the technical target chartists have held onto for months, even as we stared into the abyss at 4800. We are at the “where to now” point and continue to consolidate. The upside must still be favoured, baring anything out of left field, ranging from a sudden retreat in the oil price to a Brexit “yes” vote.

This week will be critical to determining whether market confidence is supported by economic reality. Glenn Stevens will conduct a Q&A tomorrow, where no doubt the one percent question will be raised. On Wednesday we have March quarter construction numbers and on Thursday, private sector capex and capex intentions. That latter number is forward-looking and very closely watched by the RBA.

And on the other side of the world…

Flip everything over, and we have the situation in the US. Having decided only a month a go there was no way the Fed was going to raise again this year, suddenly Wall Street is worried they might. Twice. Maybe even three times.

And the market, many a commentator is suggesting, is not prepared for it. The market is still pricing in the chance of maybe one hike, later in the year. Many believe the Fed will not risk acting ahead of the Brexit vote next month. Many believe the Fed will not risk acting ahead of presidential election in November (despite there being no precedent of holding back in election years). But recent Fedspeak is leaning very much the other way. The Fed is trying to get Wall Street to prepare.

The Dow was up over a hundred points mid-session on Friday night before wavering towards the close. It was a Friday nonetheless, and it was also expiry day for May S&P500 options, which often has an impact. Wall Street finished down for the week but the question going forward is as to whether one should be scared by the possibility of a Fed rate hike, or two, or happy that the impetus behind a Fed hike is a stronger US economy.

In both 2014 and 2015, the US economy bounced hard out of a March quarter slump. In 2016, GDP grew by an anaemic 0.5% in the March quarter. CNBC’s daily GDP tracker, based on rolling data releases, is currently predicting 2.5% for the June quarter. That’s rate hike-worthy on anyone’s terms. The first official estimate of June quarter GDP will not, however, have been released when the Fed meets in June.

The Dow closed up 65 points or 0.4% on Friday night. The S&P gained 0.6% to 2052 as the Nasdaq reversed its recent trend and shot up 1.2%. This was due to a Street-beating earnings result from chip-maker Applied Materials, which sparked a 13% share price jump and a lift for all chip stocks.

The economic data point of the day was April existing home sales, which rose a better than expected 1.7%. Inventory for existing homes for sale is tight, particularly at the affordable end of the market, which is a positive for the economy.

Commodities

All talk on oil markets at present is of supply outages. In particular, production is still down in Canada due to the fires and in Nigeria due to rebels bombing pipelines. The WTI price is hanging around just under, but not yet game to breach, the 50 mark. Lost Canadian production is expected to resume in a couple of weeks, while Nigeria is more ongoing. Rebels bomb pipelines every other week in that troubled land.

The concern is that 50 is a magic level that once surpassed will spark a new round of hedging (forward-selling) from oil producers. This could prove self-defeating. On Friday night West Texas closed down US49c at US$47.75/bbl while Brent was steady at US$48.87/bbl.

The US dollar index was steady at 95.27 but base metals prices were mostly weaker, with copper down 0.5% and nickel and lead down 1%.

Iron ore is unchanged at US$55.70/t.

Gold is off a tad at US$1251.90/oz and the Aussie is steady at US$0.7218.

The SPI Overnight closed up three points on Saturday morning.

The Week Ahead

A revision of the US March quarter GDP result is out on Friday, but those numbers are starting to get a bit stale. Of more interest during the week will be a flash estimate of manufacturing PMI tonight, new home sales and the Richmond Fed index tomorrow, and house prices, new home sales and a flash services PMI on Wednesday.

On Thursday it's durable goods and pending home sales, and on Friday consumer sentiment.

As noted, Australia’s week will be dominated by March quarter construction and capex numbers ahead of next week’s GDP result. And all ears will be on Glenn Stevens tomorrow.

On the local stock front, we’ll see earnings results from Technology One ((TNE)) tomorrow, Programmed Maintenance ((PRG)) on Wednesday, Aristocrat Leisure ((ALL)) on Thursday, and Fisher & Paykel Healthcare ((FPH)) on Friday.

Perpetual ((PPT)) will provide earnings numbers for its investment company on Wednesday, which will also see investor days being held by Boral ((BLD)), Suncorp ((SUN)) and WorleyParsons ((WOR)).

And there are a few more AGMs to get through.

Rudi will Skype-linkup with Sky Business on Tuesday morning, 11.15am, to discuss broker calls. He'll appear on the Sky Business channel on Thursday, 12.30-2.30pm and does the Skype-link again on Friday morning, around 11.05am.

This is also the week a select group of paid subscribers gets to spend a whole evening with Rudi. Should be both fun and interesting.
 

For further global economic release dates and local company events please refer to the FNArena Calendar.

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article 3 months old

The Overnight Report: Fedspeak

By Greg Peel

The Dow closed down 91 points or 0.5% while the S&P lost 0.45 to 2040 and the Nasdaq fell 0.6%.

Jobs Conundrum

Having held their ground on Wednesday, while other sectors responded to the prospect of a Fed rate hike, yesterday the resources sectors gave way. It was nothing about commodity prices on the day, it was about where commodity prices might end up if the US dollar rises on Fed tightening. The offset of the weaker Aussie made no difference, it would seem.

These sectors have run very hard these past couple of months on the commodity price rebound, so it looks like profits are being taken. Materials fell 2.6% yesterday and energy 2.0%, to provide the bulk of market weakness.

Yield sectors – telcos, utilities and supermarkets – continued to be sold, while the banks, healthcare and consumer discretionary all moved little on the session. Yesterday’s jobs numbers showed an unchanged unemployment rate, and appeared to have no exogenous effect on the market.

The jobs data showed an increase of 10,800 in April, roughly in line with expectations. But the aggregate represents a 20,200 rise in part-time jobs and a 9,300 fall in full-time jobs. This has been the trend in recent months.

The March quarter wage price index, released earlier in the week, revealed the weakest wages growth in decades. Dragging on wages growth is hours worked, which fell 1.1% in April to be down 0.5% year on year – the first negative number since May 2013. The fall in hours worked can be explained by the ongoing rise in part-time work and loss of full-time work.

Overall jobs growth over the past four months has averaged only 6,500, Commonwealth Bank’s economists note, which should be sufficient to send the unemployment rate higher on the balance of population growth. But the unemployment rate, steady at 5.7% in April, has been held down by a falling participation rate – fewer people looking for work.

“Digging below the surface shows that today’s employment report is softer than the headline numbers imply,” says CBA.

We might recall this from the RBA’s April policy statement:

“Over the period ahead, new information should allow the Board to assess the outlook for inflation and whether the improvement in labour market conditions evident last year is continuing.”

The outlook for inflation weakened, hence the RBA cut in May. The May statement suggested “Labour market indicators have been more mixed of late”. The subsequent April data look even more mixed. Cleary yesterday’s jobs number only serves to strengthen the case for another RBA rate cut.

Would the RBA go again as early as June? Unlikely. The Fed meets later in June and presumably the RBA would prefer to wait to see if it can score a rate cut by default if the Fed chooses to hike. Mind you, the Aussie, which is holding steady at US$0.7227, has already priced in a second RBA cut.

More Fedspeak

As long as the US economy continues to perform to the expectations of New York Fed president William Dudley, then “I think a tightening in the summer, the June, July timeframe is a reasonable expectation,” Dudley said last night. The Dow subsequently fell another 200 points.

The Dow managed to claw back a hundred points over the course of the afternoon but the theme remains the same – all of a sudden the Fed rate hike no one was expecting in June is now a possibility. Not a strong possibility, despite Fedhead jawboning – the market is currently pricing in a 26% chance – but a possibility nevertheless.

It is assumed, however, that if the Fed does not end up hiking in June or July, the purpose of recent more hawkish commentary and insistence June is “live” is more about making sure markets prepare for when there is a rate hike, maybe later in the year, and not be caught out by one, prompting undue volatility.

After a string of very poor earnings results from US major chain stores, the tide has turned a little as the earnings season draws to a close. Good results were posted last night by a couple of specialist apparel chains, and Wal-Mart surprised and enjoyed a 9% rally, which went a long way to buffering the Dow.

It is more likely, nonetheless, that this is a response to a result that was not as bad as had been feared following earlier shockers from major chains, which had investors dumping Wal-Mart in the lead-up.

A close of 2040 on the S&P500 last night means a breach of the 2043 level, which is technically significant for the simple reason it is the “flat on year” point. Traders have been suggesting a breach of this level could set in trend to a more pronounced down-move.

Commodities

A report suggesting a solid rise in US oil demand last week helped keep prices supported last night. West Texas crude is up US36c at US$48.24/bbl and Brent is up US32c at US$48.86/bbl.

The US dollar index is slightly higher over the period, up 0.1% at 95.30.

Given the LME was closing just as the Fed minutes were released the night before, last night’s price action is more indicative of a response. Aluminium fell 0.5%, copper, lead and nickel 1% and tin and zinc 1.5%.

Iron ore fell US20c to US$55.70/t.

Gold is down US$3.30 at US$1254.70/oz.

Today

The SPI Overnight closed down 6 points.

The shares of the big miners were weak again in London last night, but it’s a case of who is following who.

Woodside Petroleum ((WPL)) holds its AGM today.

It is Rudi's intention to link up with Sky Business through Skype this morning but election coverage might throw a spanner. If the plan goes ahead he should appear around 11.05am.
 

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available in the FNArena Cockpit.  Click here. (Subscribers can access prices in the Cockpit.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

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article 3 months old

Gold: Levels To Watch


Bottom Line 18/05/16

Daily Trend: Up
Weekly Trend: Up
Monthly Trend: Up
Support Levels: 1225 / 1207 / 1193 / 1050 - 1100
Resistance Levels: 1313 / 1355 / 1400 / 1443

Technical Discussion

Gold is a very closely watched chart not only by our subscribers but by market participants globally in general. Price fluctuations can affect currencies, especially the U.S dollar which it frequently trades inversely to, and of course it directly affects the price moves in Australia's Gold related ASX stocks which have had a pretty good run in recent times. Yet where to from here ? Our views are still backing the bullish side of the ledger even though since February price action has been full of chop. Lets check in on the technicals

Reasons to stay neutral above 1194:
→ outlook has now improved above 1194, more so above 1400
→ sentiment has been strongly bearish yet the tide looks to be turning
→ major support zone holding

The cup and handle is still the pattern of choice which exploded higher as we headed into the new year. This pattern has been overlaid by a bullish pennant and also if we just wanted to isolate price action since February, a bullish looking symmetrical triangle that has now also broken to the upside. Even with all this happening, we still need to stay attuned that things can fail and start to break down again at the drop of a hat. Price has recently retested the triangle breakout, yet it still looks hesitant, especially under the influence of the two lines of resistance circa 1250 and 1313. These supply zones are obviously what has been causing some problems for price to turn impulsive to the upside again. 1225 is our line in the sand and this is where we presently have our stop position on our trades. Below here then all the bullish patterns we have spoken about start looking fragile. On the flip side a lower swing higher pattern from here that breaks above 1306 may well be the catalyst for price to finally kick into gear higher once more. So on a slight knifes edge right here, and it could go either way, yet we are sticking with the bullish analysis for now.

Trading Strategy

 

We continue to have two gold trades running on the long side. One via an aggressive entry at 1089 against the trend and the other more conservative at 1256 backed by the strong preceding upside price action witnessed. Yet we have had our stop positions on both trades below 1225 for some time now, as price action continues to consolidate. A little frustrating yet there is nothing we can do about it. We know the structures will start to break down below 1225 thus the strategic stop position, yet above 1306 should see price action move once again to the upside. In fact if you are not on board yet, taking on long positions above 1306 would not be a bad strategy. Yet as we already have two trades active in this market as well as Silver, we wont be formally adding the recommendation. Price now needs to swing higher to get things back on track.
 

 

Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).

Risk Disclosure Statement

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article 3 months old

The Overnight Report: June Strengthens

By Greg Peel

The Dow closed down 3 points while the S&P closed flat at 2047 and the Nasdaq rose 0.5%.

Will They, Won’t They?

While the Australian market is presently not dutifully following Wall Street around, given a widening disparity between the industries that primarily drive each market, US central bank policy is very much a factor Australian investors need to pay heed to. Interest rates connect the world.

On Monday night the Dow fell close to 200 points following stronger than expected US inflation data and Fedspeak reaffirming that the June Fed meeting is “live” and that a rate hike cannot be ruled out. However the US bond market shrugged off the possibility and remained unmoved, as did the US dollar and gold. Last night was a very different story, but we’ll get to that in a minute.

Yesterday the ASX200 plunged 48 points on the open, came back to almost square at lunchtime. It was a battle, it would seem, between those believing a Fed rate hike is possible and those who don’t. Or perhaps between those who think a Fed rate hike is a problem for the Australian market and those who see any dip as a buying opportunity. Or both.

But to further complicate the matter, the morning saw the release of the Australian March quarter wage index data. At 2.1% annualised, the quarter saw the weakest growth on record for the series. This suggests both low inflation and less consumer spending power. And reinforces the potential for another RBA rate cut.

But if the Fed hikes in June, would the RBA hold off? How will it all balance out?

As confusion reigned, the ASX200 fell again in the afternoon, closing down 39. Sector moves suggested yesterday was all about interest rates, and their flow-on effects.

The resource sectors stood aside, balanced by stronger commodity prices. A stronger US dollar weighs on commodity prices but a weaker Aussie dollar improves earnings, so there is some trade-off either way.

Consumer staples fell 1.2% and discretionary 1.5%. Low wages are not promising for retailers, and a Fed hike might prevent another RBA cut.

The banks fell 0.8%. Low wages are not promising for mortgage demand and if the RBA does not cut, demand will not be boosted. Bank yields are less attractive if US rates rise and/or Australian rates don’t fall.

The telcos fell 0.9% and utilities 0.7%. The yield story is the same here.

Healthcare only fell 0.1%. The sector derives a lot of income from offshore, and thus benefits from a weaker Aussie. Industrials fell 1.1%. This sector offers a mixed bag of winners and losers.

The Aussie has fallen over a cent over 24 hours to US$0.7227. Yesterday’s local wage data encouraged further weakness in the currency, albeit it has already fallen quite a way from its recent highs, but last night’s Fed minutes stuck the knife in.

Backflip

When the FOMC released its policy statement following its meeting in April, the tone was dovish. Wall Street reduced expectations of a June rate cut to near zero. This was reinforced by the April US jobs numbers, which were to the low side.

Last night the minutes of that meeting were released, and suggested the FOMC statement on the day was somewhat misleading. This might explain why Fedheads have recently been out and about talking up the possibility of a June rate hike. The Fed is worried markets are not prepared.

The minutes suggested the FOMC is no longer concerned about the global volatility factor, as markets have now recovered from their panic earlier in the year and settled down again. That just leaves US data. While recent data have not been all that strong, the question is whether they are weak enough to justify near-zero interest rates. On a trend basis, the US labour market remains positive, If the CPI data are anything to go by, inflation is heading the right direction.

These are the Fed’s two mandated policy drivers.

The bottom line is, the minutes basically suggested the Fed is not waiting to be given a reason to hike in June, it is waiting for any reason not to hike. Not only is June very much “live”, Wall Street now sees a June hike as very much a possibility.

Having fallen 180 points on Monday night on this very possibility, last night the Dow had rallied back a hundred points ahead of the 2pm release of the minutes. A two hundred point fall ensued on the release, followed by a one hundred point recovery.

Wall Street finished square. Arguably, June rate hike potential has been priced in the night before. But the night before, the US bond market, currency and gold markets had shrugged off the possibility.

Last night the US ten-year yield jumped 12 basis points to 1.88%. The US dollar index jumped 0.7% to 95.20. Gold fell US$20.80 to US$1258.00/oz. Now all the markets are aligned.

The only possible barrier to a June rate hike, assuming no US economic shocks occur between now and June 15, is the Brexit vote. It doesn’t occur until June 23, and some believe the Fed is more likely to hold off until the July meeting in case a Yes vote sparks fresh global turmoil. Recent polls suggest the No vote appears to be gaining traction, nonetheless.

Commodities

For commodities, it was all about the jump in the US dollar that a Fed rate hike implies. Gold’s move has been noted.

West Texas crude is down US71c at US$47.88/bbl and Brent is down US94c at US$48.54/bbl.

The LME was shutting its doors just as the minutes were released so there may yet be a more pronounced reaction tonight, but all metals closed slightly lower bar aluminium, which rose 0.8%.

Iron ore never pays much attention to outside influences. It’s up US20c at US$55.90.

Today

The SPI Overnight closed down 4 points. While this reflects the flat close on Wall Street, we might also suggest, a la Wall Street, that the local market adjusted yesterday to heightened Fed rate hike possibility.

With regard the Aussie, it might be a whole new ball game this morning when the Australian jobs numbers are released for April. Presumably the market has now become quite short.

Apologies to readers who have been stuffed around by the FNArena calendar suggesting James Hardie ((JHX)) was to report on Tuesday, or on Wednesday. Short of contacting a few hundred companies over the course of a year, we rely on broker calendars, which often clash.

Note also that companies are not legally obliged to advise on a reporting date, or even stick to it if they have.

James Hardie reports today.

Rudi will make his weekly guest appearance on Sky Business today, 12.30-2.30pm and then return for an interview on Switzer TV between 7-8pm.
 

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available in the FNArena Cockpit.  Click here. (Subscribers can access prices in the Cockpit.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

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article 3 months old

Material Matters: Oil & Gas, Silver, Zinc And Iron Ore

-AWE bid a positive for sector
-Bullish oil likely short term
-US gas prices lower for longer
-Speculative push on silver
-Zinc entry point ahead?
-Pull forward in iron ore demand seen
 

By Eva Brocklehurst

Oil & Gas

The read on the unsolicited proposal for AWE ((AWE)) from Lone Star Japan, - which was rejected - is positive for Australia's small cap E&P sector, Credit Suisse asserts. The broker considered the bid reasonable although the board maintained it was opportunistic.

Still, the bid may bring attention to the value opportunities in a sector which has suffered from weak commodity prices. The broker finds value in the sector and has Outperform ratings on Beach Energy ((BPT)), Senex Energy ((SXY)) and FAR ((FAR)).

Morgan Stanley questions why the oil price is not higher, given the muted price action over the past 1-2 months suggests that an inventory buffer may be preventing a full recovery and/or the market is rightly nervous about the sustainability of outages and possible producer responses.

Bullish oil trends are expected to continue through May but the broker suspects the risks may skew to the negative in the second half. A number of worrying data points have emerged in recent weeks, which makes the broker suspect Chinese demand is slowing already.

Any renewed concerns in emerging markets could be particularly problematic for oil. The broker also notes India, Argentina and China have, or are planning, new regulations on oil trade which may have significant impacts on imports, production and investment.

Goldman Sachs observes the oil market has gone from enduring storage saturation to being in deficit earlier than expected. Hence, the broker is pulling forward its price forecasts with second half West Texas Intermediate now forecast at US$50/bbl.

The reason the broker believes the market shifted to deficit in May is driven by evidence of strong demand and sharply declining production. Stronger vehicle sales, and a larger crop harvest lead Goldman Sachs to raise its demand forecasts emanating from India and Russia, while reducing US and EU forecasts.

The broker expects some outages will recur, as well as higher production from Iran and Iraq, and this should eventually more than offset the higher demand. As a result a more gradual decline in inventories is expected with a return to surplus in the first quarter of 2017. Goldman lowers 2017 forecasts, with prices expected to only reach US$60/bbl by the fourth quarter of 2017.

Morgan Stanley also suspects cheaper Canadian gas may flood the US market in the northern summer. AECO prices traded to 5-week lows last week and the broker notes average discounts to Henry Hub prices are in excess of US$1/mmbtu for both May and April.

AECO sourced gas is currently the lowest cost option for many regions of the US. If this continues the added supply may keep prices lower for longer. Morgan Stanley observes record high inventories have occurred in Canada, given a very mild winter on top of supply growth.

Silver

A sharp rise in the price of silver over the last six weeks has made it a top performer in the year to date, Morgan Stanley observes a corresponding lift in the metal's non-commercial CFTC long positions and Comex futures, suggesting speculators are behind the move up in price.

The broker answers the question of why silver has not tracked gold this time: speculators prefer silver over gold, largely because it is cheaper and the latest speculative push has been driven by a credit surge in China and perceptions of emerging risk around China's expanding debt.

Silver's production rates are higher, delivered predominantly as a by-product of zinc-lead operations. Favourable market conditions exist as well, as mine supply fell 6.4% in 2015 and is forecast to shrink further. Morgan Stanley forecasts silver this year at around US$14.55/oz, capped by persistent low inflation.

Zinc

Macquarie suggests that zinc stocks are more than ample to cover any spot requirements, despite a definite improvement in European demand sentiment. The situation is similar in North America. Premiums have been flat in both regions and some analysts are expecting a downward move in prices.

The tightness in concentrates is yet to feed down the chain, the broker observes, and a short-term move down may occur. Macquarie agrees this could provide an entry point as into the second half its view on prices is strongly positive.

September and December quarter prices are expected to range between US$1,900/t and US$2,200/t as metal production slips on an emerging feed deficit. The broker believes mine reductions are obvious enough to envisage production falling around 8.0% this year, forcing metal output to fall and tightening up markets.

Iron Ore

Macquarie has upgraded its outlook for iron ore over the near term. This comes on the back of stronger Chinese steel demand and supply disappointments. The broker upgrades forecasts for 2016 iron ore prices by 1.0% and 2017 by 11%. Chinese steel demand growth is forecast to rise slightly in 2016 after the broker previously expected it to fall.

Pulling forward near-term demand expectations and the delays to supply has meant the broker's outlook for 2018 and 2019 is more precarious. Macquarie now estimates 50mt of high-cost seaborne supply needs to be removed in these years.

The new outlook has driven upgrades to miner earnings estimates for the next 18 months but then downgrades for the following 18 months. The broker's preferences are unchanged but sustained strength in iron ore prices over the next 18 months could mean Fortescue Metals ((FMG)) de-gears at a much faster rate than current estimates imply.
 

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article 3 months old

The Overnight Report: Over-Inflated

By Greg Peel

The Dow closed down 180 points or 1.0% while the S&P fell 0.9% to 2047 and the Nasdaq lost 1.3%.

Up to the Minute

“Members discussed the merits of adjusting policy at this meeting or awaiting further information before acting. On balance, members were persuaded that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.”

This conclusion contained in the minutes of the RBA’s May meeting, released yesterday, caused the Aussie to shoot up from under 73 to around 73.6 in a blink. While economists have been climbing over themselves since the release of the May monthly statement and quarterly SOMP to forecast more and more rate cuts, this paragraph from the minutes suggests May’s cut was not actually a lay-down misere.

Members were persuaded.

They had to be persuaded because “developments over recent months had not led to a material change in the outlook for economic activity or the unemployment rate”. It was just an issue of low inflation. There may have been some lingering concern over further fuelling the housing bubble with a rate cut, but thanks to new restrictions, “potential risks of lowering interest rates therefore were less than they had been a year earlier”.

To sum up, the RBA cut in May because it could, not because it should. It was not an absolute call based on domestic drivers. It was a relative call based on global drivers. Low inflation is being imported. Whether or not we do get another cut in August, and continue down to 1.00% as some economists are now forecasting, will depend, I suggest, entirely on the Fed.

For if the Fed raises in June, or at least some time this year, the ECB, the BoJ, and other central banks around the globe including the RBA, will be handed a rate cut by default. A rate cut that does not require increased debt or a further foray into the parallel universe of negative rates.

The local stock market stumbled slightly late morning yesterday when the RBA minutes first hit the wires, but only briefly, before the index closed on its highs. But there was a very, very scary development in the afternoon. An RBA board member fronted the press and spoke.

Please, please Australia, do not let us go down the much derided Fedspeak path! That way be dragons.

The Aussie has since come back to US$0.7326, up 0.5% over 24 hours. The board member hinted there was room for another cut.

Between the minutes and the RBA-head, we’ve really learned nothing more than we knew from the May statement and SOMP. Thus the ASX200 was able to achieve what it started out to achieve yesterday, posting a rally entirely driven by the oil price. The energy sector closed up 3%.

We then drop down to materials with a 1.9% rally, given BHP crosses sectors, before otherwise noting counter-rallies in the defensives of consumer staples and telcos, each up 1.1%. No other sector much moved, although we should note the banks were strong by default given two major ex-divs.

The ASX200 didn’t quite make it to 5400, and if the SPI Overnight’s 27 point drop is anything to go by, won’t make it there today.

Speaking of Fed rate hikes…

Today we go down

The WTI price kicked on another 1.5% last night, but energy was the only sector on Wall Street to finish in the green.

The US April CPI numbers showed a 0.4% rise at the headline, up from 0.1% in March and representing the biggest jump since January 2013. On that note, the Dow fell 200 points.

June is back on the table.

The potential for a June rate hike was enhanced by, you guessed it, Fedspeak. The Atlanta and San Francisco Fed presidents last night both said the decision hinges on the data. Lockhart of Atlanta went one step further and suggested June “certainly could be a meeting at which action could be taken”.

Let’s look at some realities: (1) The core CPI rose only 0.2%, having risen 0.1% in March; the headline jump was all about the oil price rebound; (2) the Fed prefers the PCE measure of inflation to the CPI; (3) the Fed has been banging the “data dependent” drum for months and months; and (4) Fedheads have to suggest a meeting is “live”, otherwise what’s the point of holding one?

On that last point, we note the Bank of England is seriously considering cutting its meetings back to every two months, rather than every month.

We might also note that despite the supposed enhanced risk of a June rate hike, the US ten-year yield hasn’t moved, nor has the US dollar index, and gold is actually stronger.

The minutes of the Fed’s April meeting are out tonight, so look forward to some further volatility. The last three Wall Street sessions have seen the Dow down 200 (or thereabouts), up 200 and down 200 again.

Commodities

West Texas crude is up US70c at US$48.59/bbl. Brent is up US34c at US$49.48/bbl.

It was a mixed and relatively inconsequential session on the LME, with aluminium down 0.5% and lead down 1.5%, while nickel and tin rose 0.5%.

The US dollar index is flat at 94.55 despite the CPI scare, which would have helped keep a lid on things.

Iron ore jumped US$1.90 to US$55.70/t.

Gold is up US$4.80 at US$1278.80/oz.

Today

The SPI Overnight closed down 29 points or 0.5%.

The local market is not following Wall Street at present. Oil is up again and iron ore is up 3.5%. If we are down 29 points today, it would more likely be as a result of technical consolidation near this 5400 level. Unless Fed rate hike fear sends yield stocks down the gurgler.

As noted, the Fed minutes are out tonight.

Before that, the local March quarter wage price index releases kicks off the countdown to Australia’s GDP result.

A few AGMs will be held today, including those of Coca-Cola Amatil ((CCL)) and Iluka Resources ((ILU)). ResMed ((RMD)) goes ex.

Rudi will be hosting Your Money, Your Call Equities on Sky Business tonight, 8-9.30pm.
 

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available in the FNArena Cockpit.  Click here. (Subscribers can access prices in the Cockpit.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

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article 3 months old

The Overnight Report: All The Way With Woz

By Greg Peel

The Dow closed up 17 points or 1.0% while the S&P gained 1.0% to 2066 and the Nasdaq rose 1.2%.

Healthy

The futures had suggested down 15 points yesterday morning but it didn’t take the ASX200 long to ignore this call and head higher. Much was made of disappointing Chinese data before trading commenced but on a disappointment scale, they weren’t really up there.

The local market is becoming increasingly inured to big moves on Wall Street, particularly since ups and downs of 200 Dow points have become de rigeur. Unless the moves relate specifically to something that impacts on the Australian market, such as oil prices, or it’s all part of general global macro fear/exhilaration, there’s not enough correlation between Bridge Street and Wall Street on any given day to suggest one must always be determined by the other.

The big story on the local market yesterday was the government’s agreement to do something about above-market rents being paid by pathology collection centres, as a trade-off against last year’s cuts to bulk billing incentive payments. Health Cares Primary ((PRY)) and Sonic ((SHL)) both jumped 5% yesterday as a result, sending the healthcare sector up a market-leading 2.0%.

Next best was materials with a 0.8% gain, in the face of the Chinese data, and a 0.6% rise in the banks would have had the biggest index clout. Elsewhere, some renewed support for supermarkets and more buying in telcos offset a fall in energy.

The ASX200 is sitting right in the middle of that 5300-400 range and it has to be said, still gives the impression of wanting to go up. While we’ve had a couple of stumbles on the way, it’s been a while since we’ve had one of those big one percent plus wash-out sessions that were quite frequent earlier in the year.

Hope I’m not speaking too soon, albeit the futures closed up 47 points overnight so we may yet have another shot at 5400 today, assuming the profit-takers don’t get toey.

Tonight’s mass media headlines will suggest there was a rally in stocks “despite selling in the banks”. That’s because both NAB and Macquarie go ex today, so be warned.

Nine Reasons to buy Apple

Celebrated iThing maker Apple is one of those stocks that’s simply too big for its own good. I’m assuming after last night’s 3.7% share price gain Apple is back to being the biggest company in America by market cap, having briefly seceded to the artist formerly known as Google. When you’re that big your every little move shifts market cap weightings exponentially and forces index trackers to react, exacerbating ups and downs. The herd follows blindly.

Apple is a stock everyone though they must own, until it was declared ex-growth, and everyone bailed out again. Never mind the barrow-loads of cash the company continues to generate every day. In the recent sell-off, Apple’s PE ratio fell to a low of nine times. That makes the company look more like an iron miner than what has arguably become more of a consumer staple. This wasn’t lost on Warren Buffet, who last night revealed he’d bought over a billion dollars’ worth of Apple shares.

So there’s the bulk of your 175 point Dow rally overnight. Apple, of course, bears no relevance to the Australian market so we’d need something else to justify a 47 point jump in the SPI overnight.

Enter Goldman Sachs. The investment bank was obviously feeling the pain on its short oil position – Goldman has been bearish oil – so decided to square up and try the long side instead. Last night Goldman issued a note suggesting that on a balance of strong demand and sharp declines in production, the oil market had shifted from “nearing saturation to being in deficit much earlier than we expected”.

Goldman now expects WTI to average US$45 in the June quarter and US$50 in the second half of 2016, up from US$35 and US$45 respectively. WTI subsequently jumped 3.3% last night.

Meanwhile the Empire State activity index dropped to minus 9.0 from plus 9.6 last month, completely confounding forecasts of plus 5.8. While this might be good for those not wanting a Fed rate hike, I seem to recall April rebounding very sharply from a weak March. In other words, activity in the New York Fed region either surges one month and collapses the next in a cycle, or this series is increasingly misleading.

Commodities

West Texas crude is up US$1.51 or 3.3% at US$47.89/bbl. Brent is up US$1.34 or 2.8% at US$49.14/bbl.

LME traders had their first opportunity to respond to the “disappointing” Chinese data last night, and subsequently sold down base metals from the bell. But the selling didn’t last long, and helped by a benign greenback, which is flat over 24 hours, and the jump in oil prices, base metal prices recovered to post a positive session.

Copper and nickel rose 0.5%, aluminium and tin 1%, and lead 2%.

Iron ore rose US30c to US$53.80/t.

With the dollar index steady at 94.58, gold is steady at US$1274.00/oz.

With commodity prices stronger, the Aussie is up 0.3% at US$0.7290.

Today

The SPI Overnight closed up 47 points or 0.9%.

The US will see inflation, housing and industrial production data tonight.

Before that, the RBA will release the minutes of its May meeting and forex cowboys will have their fingers on the trigger in case there’s any hint of a back to back cut.

DuluxGroup ((DLX)) and Ozforex ((OFX)) will release interim earnings today and James Hardie ((JHX)) will release quarterly earnings either today or tomorrow, depending on which broker you believe.

As noted, National Bank ((NAB)) and Macquarie Group ((MQG)) will go ex-dividend today which will appear to take a sizeable chunk out of both the financial sector and the index on the session.

Rudi will Skype-link with Sky Business around 11.15am to discuss broker calls and later tonight he'll participate in a webinar organised by VFSGroup: https://vfsgroup.com.au/seminars/

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available in the FNArena Cockpit.  Click here. (Subscribers can access prices in the Cockpit.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" - Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

article 3 months old

The Monday Report

By Greg Peel

Friday

I mentioned on Friday morning, with regard Thursday’s trade on the local market, that telcos had traded up 0.8% and utilities down 1.7%, with no real rhyme or reason. Well on Friday, telcos were down 1.2% and utilities up 1.0%, so go figure that one.

Beyond that, there was an air of “Friday” about Friday’s trade. We had the run-up into the technical target range of 5300-5400 and having done so, ran out of any reason to push higher. Materials fell 1.2% with a bit of help from weak metal prices but energy was down 0.5% despite a stronger oil price.

Consumer staples led the market down 1.5% as traders took profits after having successfully ridden the rally back in the supermarkets from oversold conditions, to the point further catalysts are not apparent. Discretionary (+0.8%) is getting more attention now thanks to the RBA’s urgent change in policy.

With Wall Street down on Friday night, the SPI down 15 points and the weekend’s Chinese data releases disappointing, it looks like we’ll be in for some further consolidation as the new week begins.

It’s Structural

All last week on Wall Street we saw large US chain stores lining up to report earnings misses and suffer share price drops as a result. On Friday it was JC Penney’s turn to join the queue, falling 3%. By Friday night an ETF made up of all these big brick & mortar retail names was down 15% for the week alone, prompting concerns for the US economy.

The consumer represents two thirds of US GDP. If Americans are not spending, then the US economy is in trouble. On Friday night the April retail sales numbers were released, which were hoped would throw some light on the issue.

Vale bricks & mortar. April sales rose 1.3%, exceeding forecasts of 1.0% and marking the biggest monthly gain in a year. While autos represent a chunky component, sales ex-auto were still up a solid 0.8%. Outside of autos, one of the best performing segments was “non-store sales”. In other words, online.

Good news – the US economy is not in trouble. Bad news – such a stellar result will not have been missed by the Fed. Could June once again be back in play?

On the sales result, the US dollar index rose another 0.5% to 94.38. The greenback continues to rebound from what were previously encouraging lows, thus weighing on shares of multinationals. The US two-year yield spiked up on a return of the June possibility, before settling back to be down one basis point. But the ten-year yield closed down 5 basis points to 1.71%.

This “flattening of the yield curve” suggests that while the Fed may hike again in the short term, in the longer term the bond market does not anticipate strong US growth. Flat yield curves do not offer banks much opportunity to profit, thus the financials were sold down on Wall Street on Friday night. Slow economic growth does not bode well for consumer staples, so Wal-Mart led the Dow down.

The Dow closed down 185 points or 1.1% while the S&P fell 0.9% to 2046 and the Nasdaq lost 0.4%. The S&P breached its 50-day moving average at 2054 and thereafter the selling accelerated. Typical “risk-off” ahead of a weekend was exacerbated by a monthly options expiry.

Commodities

The sell-off on Wall Street had nothing to do with oil prices, which for once were very flat on Friday night. West Texas was barely changed at US$46.38/bbl and Brent was down a tad at US$47.80/bbl.

Thursday night’s selling on the LME gave way to retrospection on the strong US sales result, but also squaring ahead of the weekend’s data out of China. Only a 1% rally in zinc is worth noting.

Iron ore fell US90c to US$53.50/t.

Despite the stronger greenback, gold managed to rally US$9.60 to US$1272.80/oz. Because of the stronger greenback, and a change in trend since the RBA rate cut, the Aussie fell 0.7% to US$0.7268.

The SPI Overnight closed down 15 points or 0.3% on Saturday morning.

China

On Saturday Beijing released monthly Chinese data for April.

Industrial production rose 6.0% year on year, down from 6.8% in March and missing forecasts of 6.5%. Retail sales rose 10.1%, down from 10.5% and missing 10.5% forecasts. Fixed asset investment rose 10.5% in the four months to April, down from 10.7% for the three months to March, and missing 10.9% forecasts.

So all were disappointing. But then, the March numbers had been stronger than expected so once again, we must factor in the Lunar New Year distortion. Beyond that, just how worried should the world be about an economy growing output at a 6% annual rate, retail sales at 10% and construction spending at 10%?

The Week Ahead

The minutes of the April Fed meeting will be released on Wednesday night. As usual, the market will be looking for any clues as to what the Fed might do next.

US data this week include housing sentiment and the Empire State index tonight, housing starts, industrial production and the CPI tomorrow, the Chicago national and Philly Fed indices on Thursday, and existing home sales on Friday. More grist for the Fed mill.

Japan will report March quarter GDP on Wednesday.

The minutes of the RBA’s May meeting are due tomorrow and these, too, will be closely scrutinised.

On Wednesday Australia’s March quarter wage price index result will be released – the first of the quarterly releases ahead of our own GDP result in a couple of weeks. The April jobs numbers will be released on Thursday to a country in election mode.

God help us.

On the local stock front, Elders ((ELD)) will report earnings today, while DuluxGroup ((DLX)), James Hardie ((JHX)) and Ozforex ((OFX)) will report tomorrow. There is another handful of AGMs to be held this week and Woodside Petroleum ((WPL)) will hold an investor day on Friday.

National Bank ((NAB)) goes ex tomorrow.

Rudi has a busy TV appearances schedule ahead of him this week. On Tuesday he'll Skype-link with Sky Business around 11.15am to discuss broker calls. Later that day, he'll host a webinar for clients of VFSGroup. On Wednesday he'll host Your Money, Your Call Equities (8-9.30pm). On Thursday, he'll appear twice; first as guest on Sky Business (12.30-2.30pm) then later as guest on Switzer TV, between 7-8pm. On Friday, he'll linkup again through Skype, probably around 11.05am, to discuss time broker calls one more.

For further global economic release dates and local company events please refer to the FNArena Calendar.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" - Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com