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IG Markets – Morning Prices 30 July 2010

IG Markets – Morning Prices

30 July 2010

US stocks fell for a third day as investors were left disappointed after poor earnings from technology and consumer-related companies. Whilst there was quite choppy trade the S&P 500 fell 0.4% to 1101, whilst the Dow Jones Industrial average closed down 30 points or 0.3%.

The S&P 500 did make an attempt to rally on the open trading to a high of 1115. Pre- market the latest read on weekly jobless claims showed improvement on the labour market falling by 11,000 claimants. However, the strength in US equities on open was subsequently sold into pushing the index to test 1100 as weak earnings reports from technology companies such as Akamai and Nvidia were disseminated, just how quickly the recent gains can be erased in such a short space of time has some quite worried.

Whilst the bulk of US companies have beaten expectations recent downbeats assessments from the Federal Reserve have left global traders scratching their heads as to what to do next. Comments overnight from Federal Reserve Bank of St. Louis official James Bullard that the central bank should resume purchases of treasuries if the economy slows, created further downside to the markets.

There seems to be growing feeling though in the global investment community that the US economy is stuck between a rock and a hard place, whilst job growth is anaemic and confidence is wanning the recent run of stronger than expected data out of Europe has seen the Greenback fall out of favour with currency traders. Strong job and sentiment numbers in Germany overnight propelled the single currency up to 1.31 and there is a realisation that global funds managers are looking to deploy funds into stocks which are not leveraged to the US$.

As for the Australian market today, an open around 4500 is expected. Whether trader choose to defend that level will no doubt depend on how Asian markets trade, further strength in the Shanghai composite could see the ASX 200 maintain the 4500 mark.

Materials should fair ok today given some overnight strength in base metals, however BHP’s adr is pointing to an open around $40.20, down about 0.6%. Look out for ERA’S results today; the stock has underperformed the market this year so a strong result could attract buying interest.

It is hard to see where strength will come from as the lead in for banks, energy and industrials is weak, so it is hard to get a feel on how individual stocks may open. However tonight’s GDP print in the US, whilst backward looking is seen as a potentially creating some volatility so traders may tread cautiously today in anticipation of that.

Market Price at 7:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 0.9005 0.0028 0.31%
ASX (cash) 4503 -22 -0.48%
US DOW (cash) 10456 -74 -0.70%
US S&P (cash) 1100.4 -9 -0.85%
UK FTSE (cash) 5294 -20 -0.37%
German DAX (cash) 6132 -50 -0.80%
Japan 225 (cash) 9641 -55 -0.57%
Rio Tinto Plc (London) 33.55 -0.32 -0.94%
BHP Billiton Plc (London) 19.78 -0.14 -0.68%
BHP Billiton Ltd. ADR (US) (AUD) 40.20 -0.26 -0.64%
US Light Crude Oil (Sep) 78.26 1.11 1.44%
Gold (spot) 1168.4 1.3 0.12%
Aluminium (London) 2092 23 1.11%
Copper (London) 7252 82 1.14%
Nickel (London) 20700 295 1.45%
Zinc (London) 1980 24 1.23%
RBA Cash Rate to be raised by 25bp (Aug) (%) 3.00 0.00 0.00%

IG Markets provides round-the-clock CFD trading on currencies, indices and commodities. The levels quoted in this email are the latest tradeable price for each market. The net change for each market is referenced from the corresponding tradeable level at yesterday’s close of the ASX. These levels are specifically tailored for the Australian trader and take into account the 24hr nature of global markets.

ENDS


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