IG Markets Morning Thoughts

IG Markets Morning Thoughts

In US action overnight, stocks pared early losses as JPMorgan reported a stronger-than-expected result, BP said it had managed to stop the oil leaking in to the Gulf of Mexico and Goldman Sachs settled its fraud case with the SEC for a reported US$550 million.

The broad based S&P 500 was the best performer, rising 0.1% to close the session at 1096, well off its earlier low of 1081. The NASDAQ finished the session flat while the Dow Jones Industrial Average fell 0.1%.

In Australia, the ASX 200 is called to open the session flat at 4444 after a night of mixed leads.

We’re likely to see a relatively flat opening for material names after base metals leads from the London Metals Exchange were mixed In normal London trade, Rio Tinto and BHP retreated 3.3% and 1.2% respectively while BHP’s ADR is calling the locally listed stock to open 0.2% firmer at $38.21 The gold miners could see some weakness after gold futures declined 0.2% since 4.30pm yesterday.

We may also see some weakness among financial names. Despite beating top line estimates, there was a growing consensus on Wall St that JPMorgan’s result wasn’t actually that impressive, especially revenues from the investment banking business. The sector had declined significantly following the result but news late in the session that Goldman Sachs had settled its fraud case saw the sector rally, eventually closing 0.2% lower.

Elsewhere, flat leads from the energy and industrial sectors are unlikely to offer much guidance on the open, although we may see some support for consumer discretionary names following a strong US session.

In summary, it’s looking like a very mundane open. The direction of our session will depend on how Asia trades, as well as if traders are looking to lock in some profits before the weekend.

ENDS

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