IG Markets Morning Thoughts

IG Markets Morning Thoughts

On Wall St, stocks finished flat to slightly firmer as a stronger-than-expected result from Intel vied with some concerning reads on the economy from retailers and the Federal Reserve. In the Fed’s latest meeting minutes, they agreed that the outlook for the recovery had softened, due mainly to problems in Europe and that it would be wise to study what to do if the economy were to worsen severely.

The technology heavy NASDAQ was the best performer, up 0.4% while the Dow Jones Industrial Average and S&P 500 finished flat on the session.

After six straight sessions of gains, we’ve seen a pause in the market, which is only normal. At the end of the day, the market’s in a downtrend so it’s not surprising to see traders selling into the rally.

In Australia, the ASX 200 is called to open 0.4% weaker at 4444 following relatively flat to bearish offshore leads. Our heavily weighted material and financial sectors are likely to come under pressure as they were among the decliners in the US.

The financial sector was the worst performer, down 0.7% as traders looked to book some recent profits ahead of important earnings releases from JPMorgan, Citigroup and Bank of America.

The materials sector fell 0.3%, with base metals on the London Metals Exchange broadly lower as well. Rio Tinto finished flat in London trade while BHP Billiton lost 0.5%. BHP’s ADR is calling the locally listed stock to open 1.1% weaker at $37.96. Gold futures also retreated, losing 0.3% since our 4.30pm close yesterday.

Elsewhere, we could see some weakness among discretionary names after the US retailers saw selling following the softer-than-expected retail sales numbers.

In summary, we’re likely to see the local market open lower this morning before the focus quickly turns toward a raft of Chinese data due at midday. The big number’s everybody will be watching for are GDP, CPI, Fixed Asset Investment and Industrial Production.

ENDS

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