US & World Daily Markets Financial Briefing 03-04-2009

Get our Daily Trade Signals and Grain Newsletter along with a copy of the CBOT Introduction to Agricultural Futures and Options Book for Free! The grain trading professionals at MF Global can guide you in the right direction with your trading. Click here to Get your Free Grain Trading Kit Today

Major Averages Move Off Their Lows But Remain Negative

Stocks are showing modest weakness during mid-morning trading on Friday, as investors respond to some negative news on the job market and the service sector. The major averages have slipped well below the unchanged line after seeing some early uncertainty.

Earlier, the Labor Department said that non-farm payroll employment fell by 663,000 jobs in March following an unrevised decrease of 651,000 jobs in February. The drop in jobs came roughly in line with economists' expectations of a decrease of 658,000 levels.

With the continued decrease in jobs, the unemployment rate rose to 8.5 percent in March from 8.1 percent in the previous month, in line with expectations. The increase lifted the unemployment rate to its highest level since November of 1983.

While the report looks backward at job losses already posted, traders still don't want to see big growth in the number of people out of work, because it is likely to crimp consumer spending and the economy's attempts to recover.

Meanwhile, the Institute for Supply Management released its report on activity in the service sector for March, showing that the index of activity in the sector unexpectedly fell to 40.8 in March from 41.6 in February, with a reading below 50 indicating a contraction in the sector.

In recent trading, the major averages have moved well off their lows for the session, although they currently remain in negative territory. The Dow is currently down 38.15 at 7,939.93, the Nasdaq is down 1.65 at 1,600.98 and the S&P 500 is down 3.53 at 830.85.

Come Into the LIVE Online Trading Session and Watch Us Make at Least 1 Point ($500 - $2000 a Day). The LIVE Trading Session is Completely FREE! - Sign Up Now here!

Sterling moves ahead

Sterling gained against the dollar as equities moved ahead and data showed UK house prices rose for the first time since late 2007.

G20 optimism washed over the markets as news of a $1trn stimulus package left them bathed in a sea of blue.

UK house prices increased for the first time since October 2007 last month as house purchase activity leapt to its highest since May last year, according to the Nationwide Building Society.

The average cost of a home rose by 0.9% in March to £150,946, leaving the annual decline at 15.7%. Prices fell 1.9% in February and 17.6% over the year.

The euro was only slightly lower after the European Central Bank (ECB) slashed interest rates to an all time low of 1.25%, surprising analysts who had expected an even larger 50 basis point cut.

Recession claims another 663,000 US jobs

Another 663,000 Americans lost their jobs in March, according to data released Friday, taking the total lost during the recession past 5m.

The Labor Department’s non-farm payrolls figure was just a touch more than 658,000 predicted by Briefing.com, but way ahead of the 600,000 forecast elsewhere.

An increase in the unemployment rate to 8.5% from 8.1% in February was in line with expectations, but still a 25-year high.

Some 651,000 jobs went in February, but January’s figure of 655,000 has been revised higher to 741,000, the third largest increase on record.

The worst two months were a 834,000 plunge in 1949 caused by a coal and steel strike, and a near 2m loss in 1945 following the end of the Second World War.

This recession has now claimed the jobs of 5.1m workers since it began 16 months ago and 2m in the last three months.

This comprehensive trading toolkit sports a new efficient & intuitive interface and an expanded arsenal of technical analysis resources. Easy access to powerful tools, highly developed charting technology, Dow Jones news, and an advanced level of customization, sophistication & convenience set VT Trader™ apart from other Forex trading platforms. Click here

Europe’s top stocks are currently mixed in a choppy session on Friday as investors are cautious ahead of the all important US employment figures.

If the survey by payroll services firm ADP is any guide – and it usually is – the figures may be worse than anticipated.

ADP said on Wednesday that the US economy lost 742,000 private non-farm jobs in the month of March, which was higher than expected. Market consensus for the official figure is for 660,000 non-farm jobs to have been shed in March.

Banks are going well on this side of the pond, with Societe Generale, Credit Agricole, BNP Paribas and UniCredit all in positive territory.

Carmakers are also on the rise after Credit Suisse upgraded the sector to "overweight" from "market weight". Germany’s BMW and Daimler and French peers Peugeot and Renault are in the blue.

Across the markets, the German DAX has gained 40 points to 4,422, the French CAC is flat at 2,992, while the Swiss market dropped 92 points to 5,089.

In other news, UK gas supplier Centrica and French peer EDF are reportedly at loggerheads over the planned sale of a 25% stake in EDF-owned British Energy. The two companies told the Financial Times yesterday that talks are continuing, though both had set the end of March as their target for reaching an agreement.

The paper said Centrica has come under pressure from shareholders not to overpay as electricity prices have fallen sharply since EDF agreed to buy nuclear generator British Energy for £12.4bn last year.


CAC 40 - Risers

1. Renault (RNO) € 20.85 +9.02%
2. Air France-KLM (AF) € 8.00 +7.05%
3. Societe Generale (GLE) € 33.73 +6.39%
4. Vallourec (VK) € 79.94 +6.08%
5. Peugeot (UG) € 17.91 +4.71%
6. Accor (AC) € 29.77 +4.60%
7. AXA (CS) € 11.32 +4.52%
8. Schneider Electric (SU) € 55.95 +4.09%
9. Lafarge (LG) € 33.51 +4.00%
10. ArcelorMittal SA (MT) € 18.97 +3.66%

CAC 40 - Fallers

1. Sanofi-Aventis (SAN) € 41.76 -3.05%
2. Carrefour (CA) € 29.98 -2.66%
3. GDF Suez (GSZ) € 25.23 -2.30%
4. France Telecom (FTE) € 16.99 -2.16%
5. Total (FP) € 38.11 -2.03%
6. Vivendi (VIV) € 20.57 -1.27%
7. Danone (BN) € 38.05 -1.09%
8. EDF (EDF) € 29.96 -1.09%
9. Pernod Ricard (RI) € 44.47 -1.05%
10. Unibail-Rodamco (UL) € 110.96 -0.90%

Do you want to trade the e-mini S%P profitably without the cumbersome technical analysis? Take the guess work of out of trading, and trade with automated Price Action method only. Proven and Consistent. Click here to find out more

Asian markets Extend Rally on hopes of global recovery; profit taking limits gains

The major markets across the Asia-Pacific region ended in positive territory on Friday, extending the gains on expectations that the worst had been overcome and the global economy, though still weak, is showing a slowdown in the downward momentum. Positive closing by Wall Street stocks for the third day in succession following the promise of about $1.1 trillion in loans and guarantees by the G20 leaders in London and a relaxation in the "mark-to-market" accounting rules for banks, also influenced the Asian markets. Automakers, resources and financials were the major gainers. However, profit taking at higher levels ahead of the weekend limited the gains, with the major markets closing well below the day's high.

On Thursday, the Dow closed up 216.48 points or 2.8% at 7,978, the Nasdaq closed up 51.03 points or 3.3% at 1,604 and the S&P 500 closed up 23.30 points or 2.9% at 834.

In Asian trading, crude oil ended down $0.73 at $51.91 a barrel in electronic trading. Light sweet crude for May delivery closed up $4.25 at $52.64 a barrel on the New York Mercantile Exchange on Thursday, after hitting an intra-day low of $48.45 and a high of $52.87 on improved demand prospects amid hopes the G-20 summit will help pull the world out of the economic crisis.

In Tokyo, the benchmark Nikkei 225 Index closed at 8,750, up 30.06 points, or 0.34%, and the broader Topix index of all First Section Issues added 4.67 points to 831.

Automakers led the gains on the weaker local currency. Toyota Motor surged up 7.25%, Nissan Motor advanced 5.94% and Honda Motor added 1.65%.

Exporters also ended higher. Canon advanced 1.99%; Sharp added 0.72% and Sony Corp. gained 3.23%. Among trading houses, Mitsubishi Corp. advanced 4.61%, Sumitomo Corp. gained 1.88% and Itochu added 1.54%.

Financials ended weaker in late trading on profit taking. Mitsubishi UFJ declined 0.38%, Mizuho Financial lost 1.44%, Sumitomo Mitsui shed 2.92% and Resona Holdings declined 2.72%. However, Brokerage Nomura Holdings bucked the trend and advanced 4.80%.

Oil stocks ended mixed. While Inpex declined 1.25% and Showa Shell lost 2.14%, Nippon Oil edged up 0.20%.

In Australia, the benchmark S&P/ASX 200 index rose 1.54%, or 56.60 points, to 3,736 and the broader All Ordinaries index advanced 52.90 points to 3,674.

On the economic front, the latest Australian Industry Group - Commonwealth Bank Performance of Services Index or PSI data revealed that Australian services sector activity remained weak in March. The seasonally adjusted Australian PSI rose by 3.4 points to 35.6 in March, still well below the 50.0 points level separating expansion from contraction.

Resource stocks advanced after a measure of six commodities advanced 2.9% on the London Metals Exchange. Positive economic data from China, where the Purchasing Managers' Index rose to a seasonally adjusted 52.4 in March from 49 in February also propped up resource stocks on expectations of rising demand from China, the major export destination for Australian resources.

Financials gained on expectations that change in accounting rules might improve the profits of the banks. Among banking stocks, Commonwealth Bank of Australia advanced 2.11%, ANZ Banking Group surged up 5.45%, and National Australia Bank advanced 5.48%. Westpac rose 3.02%, and investment bank Macquarie Group gained 4.97%.

In the resources sector, index leader BHP Billiton gained 3.68%, and Rio Tinto advanced 2.93%. Among energy stocks, Woodside moved up 1.79%, Oil Search rose 4.33%, and Santos gained 3.38%.

Gold miners, however, declined after gold closed lower on Thursday. Lihir Gold lost 6.60%, Sino Gold slipped 0.36%, and Newcrest Mining declined 7.11%.

In the retail sector, David Jones lost 1.05%, Woolworths slipped 0.68%, and Coles' owner Wesfarmers decreased 1.42%.

The benchmark Hang Seng Index ended 0.16% or 23.72 points, higher at 14,546, having pared most of the gains on profit taking.

Property related stocks advanced. Henderson Land advanced 4.93%, Sino Land gained 3.04%, New World Development added 1.50% and SHK Properties added 1.27%. However, Hang Lung Properties declined 3.81%.

Resource stocks also ended higher. Aluminum Corporation of China, or CHALCO, gained 3.09%, CNOOC advanced 1.22% and PetroChina moved up 1.09%.

Financials ended mixed on profit taking. HSBC Holdings edged up 0.10%, while Hang Seng Bank declined 1.62%. Other major banks also ended lower on profit taking.

Insurance stocks also ended mixed. While Ping An advanced 0.29%, China Life lost 0.74%.

In Seoul, the benchmark KOSPI Index ended at 1,284, up 6.78 points, or 0.53%.

Financials ended higher. KB Financial Group gained 2.72%, Shinhan Financial advanced 4.14% and Woori Finance added 1.36%.

Oil-related stocks also ended higher. SK Holdings gained 1.70% and S-Oil edged up 0.34%.

Among the automakers, while Hyundai Motor gained 1.32% and Kia Motor advanced 4.01%, Ssangyong Motor declined 1.15%.

Among technology stocks, Hynix Semiconductor moved down 0.79% and LG Electronics slipped 0.20%. However, LG Display gained 0.33%. On the other hand, market heavyweight Samsung Electronics moved up 0.34%.

Shipbuilders ended weak. Hyundai Heavy Industries lost 0.24%, Samsung Heavy Industries decreased 0.92%, and Daewoo Shipping moved down 1.11%.

Among the other markets, China's Shanghai Composite Index lost 5.51 points or 0.23% to 2,420, Singapore's Strait Times Index gained 17.53 points, or 0.97% to 1,821, Indonesia's Jakarta Composite Index added 0.63 points or 0.04% to 1,500, and Taiwan's Weighted Index advanced 55.85 points or 1.02% to 5,530.

Get the latest Forex news articles here.

Oil jumps

Oil prices jumped above the $50 barrier, tracking the gains seen in equities as hopes of an economic recovery gained momentum.

Much of the gains were achieved after leaders at the G20 summit in London agreed to a plan that puts the International Monetary Fund at the heart of efforts to kick-start the ailing global economy.

The G20 nations will make $750bn available for the IMF to rescue struggling economies, compared with $250bn previously.

Stocks jumped on the news and on changes in bank accounting rules.

Crude prices benefited because a recovery in the economy will increase demand for oil. US crude for May delivery ended the day up $4.25 at $52.64 a barrel.

Gold for June delivery fell 18.80 to settle at $908.90 an ounce.

Track the performance of your favoured currency against the top 20 global currencies. Click here.