US & World Daily Markets Financial Briefing 27-03-2009

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

Stocks Moving Lower As Traders Cash In On Recent Gains - U.S. Commentary

Stocks are showing notable weakness during mid-morning trading on Friday, as investors take profits from the recent rally and digest some mixed economic news. With the decline, the Nasdaq has once again slipped below the unchanged line for the year-to-date period.

On the economic front, the Commerce Department released its report on personal income and spending in the month of February. While the report showed an increase in spending that came in line with estimates, income fell by a little more than expected.

The report showed that personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The modest increase in spending came in line with the expectations of economists.

At the same time, the Commerce Department said that personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.

The final reading of the Reuters University of Michigan's consumer sentiment index for March was also released earlier, showing a revised reading of 57.3. Economists had expected the consumer sentiment index to be lifted to 56.8 from the mid-month reading of 56.6.

In other news, President Barack Obama is meeting today with the CEOs of JP Morgan, Citigroup, Goldman Sachs and other banks, as well as executives from industry associations, to discuss the economy and the administration's proposals to increase regulation of the financial system.

Additionally, President Obama will soon unveil the results of a federal examination of the restructuring plans from General Motors and Chrysler, a condition for the auto-makers to receive more government capital.

White House Press Secretary Robert Gibbs said the details would be announced before the President departs for the G20 Summit in London on Tuesday.

"The President, as part of viability plans from both GM and Chrysler, is required by the 31st to give an update on those plans and where our government sees them, and we'll be doing that also in the next few days," Gibbs said.

The major averages pulled back to new lows for the session in recent trading, but they have regained some ground since then. The Dow currently remains down 128.39 at 7,796.17, the Nasdaq is down 29.14 at 1,557.86 and the S&P 500 is down 13.55 at 819.31.

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

Sector News

Following the broad based strength that was seen in the previous session, the vast majority of the major sectors are moving back to the downside.

Some of the worst losses are coming out of the real estate sector, driving the Morgan Stanley REIT Index down 3.9 percent. Nonetheless, the index remains stuck in a recent trading range.

Within the sector, Macerich Co. is posting one of the biggest losses, falling 6.5 percent after being downgraded to Sell from Neutral at Goldman Sachs. With the decline, the stock has fallen to its lowest intraday level in over a decade.

Goldman Sachs attributed the downgrade to Macerich's exposure to the weak housing markets in Arizona and Southern California. The company also has large near-term debt refinancing requirements, with 50 percent of its debt maturing in the next three years.

Oil services, software stocks and natural gas are also suffering considerable weakness on the day, with the Philadelphia Oil Services Index down 4.2 percent, while the Amex Software Index and the Amex Natural Gas Index are down 3.5 percent and 3.3 percent, respectively.

Stocks Driven By Analyst Comments

PPG Industries is posting a loss of 6 percent after being downgraded to Neutral from Buy at Merrill/BofA. With the decline, the stock has pulled back well off of the month and a half closing high it set in the previous session.

The downgrade came as analysts believe demand for caustic soda is getting weaker, along with other business areas.

Additionally, Rowan is also down 6 percent after Barclays downgraded the stock to Equal Weight from Overweight and cut its price target to $18 from $23. The downgrade came as Barclays analysts believe that Rowan's Gulf rig will experience significant downtime this year.

Meanwhile, 3Com is posting a gain of 3.9 percent following an upgrade to Equal Weight from Underweight at Barclays. Its price target was also increased to $3.00 from $2.75.

The upgrade came as analysts see 3Com's non-China pipeline improving, making way for solid gross margin improvement.

Other Markets

In overseas trading, the stock markets across the Asia-Pacific region turned in a mixed performance on Friday. While Japan's Nikkei 225 Index closed down 0.1 percent, Hong Kong's Hang Seng Index ended the day up 0.1 percent.

Meanwhile, the major European markets are all moving lower, with the U.K.'s FTSE 100 Index showing a loss of 0.9 percent, while the French CAC 40 Index and the German DAX Index are falling 2 percent and 2.1 percent, respectively.

In the bond market, treasuries are showing some strength but have come off their intraday highs. Subsequently, the yield on the benchmark 10-year note is currently down less than a basis point at 2.73 percent.

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

Europe's top stocks have swung into the red in choppy trade on Friday, led lower by a weak energy sector.

Royal Dutch Shell and Total are down in line with the falling crude price. The April contract rose above $54 a barrel yesterday, but is currently down below $53.

Shares in BMW rose after Societe Generale upped its stance on the German luxury carmaker to buy from hold.

Fellow carmakers Renault and Peugeot are among the top performers in Paris.

In the banking sector, Barclays shares are rising strongly on reports it passed a Financial Services Authority stress test to judge whether it needs additional capital.

Air France-KLM dropped after it issued a profit warning. British Airways and Air Berlin have also turned negative.

Across the markets, the German DAX has fallen 22 points to 4,236, the French CAC is down 28 points at 2,863, while the Swiss market dropped 41 points to 4,925.

In economic news, euro zone industrial orders dropped the most on record in January, down 34% on the year.

"It seems inevitable that eurozone manufacturers will continue to find life extremely difficult over the coming months as they are hit by deep slowdowns in both domestic demand and in key export markets, as well as intensifying competition," said Howard Archer, chief UK economist at IHS Global Insight.


CAC 40 - Risers

1. Dexia (DEXB) € 2.87 +5.01%
2. Renault (RNO) € 17.02 +4.71%
3. Michelin (ML) € 30.43 +4.25%
4. ST Microelectronics (STM) € 3.89 +3.10%
5. Peugeot (UG) € 15.58 +3.04%
6. Vallourec (VK) € 71.86 +2.64%
7. AXA (CS) € 9.49 +2.21%
8. Schneider Electric (SU) € 52.05 +1.98%
9. Lafarge (LG) € 36.01 +1.84%
10. PPR (PP) € 48.64 +1.78%

CAC 40 - Fallers

1. Cap Gemini (CAP) € 23.75 -8.05%
2. Air France-KLM (AF) € 6.73 -5.63%
3. Accor (AC) € 26.34 -2.30%
4. Vivendi (VIV) € 19.84 -2.24%
5. France Telecom (FTE) € 17.39 -2.17%
6. Credit Agricole (ACA) € 8.96 -1.97%
7. Lagardere SCA (MMB) € 20.87 -1.93%
8. Societe Generale (GLE) € 31.40 -1.88%
9. Air Liquide (AI) € 62.60 -1.79%
10. Suez Environnement Company (SEV) € 11.34 -1.52%

The latest streaming prices and news on all the major commodities from precious metals to crude oil, so you can keep up-to-date and never miss a trading opportunity again.
Click here

The Japanese stock market took a pause for breath Friday bringing to an end nine successive days of rises for the Topix index.

Nevertheless, the Nikkei 225 index reached its highest point since 9 January during the session before easing back to 8,626, down 9 points.

Despite the temptation to bank profits investors still drove some prices higher, notably property companies. Japan Prime Realty, Aeon Mall, Nippon Building and Kenedix Realty advanced strongly on newspaper reports that Japan may set up a 1,000bn yen fund to buy assets from real estate investment trusts.

Exporters such as Canon and Sony were wanted as optimism grows that the US economy will pick up and start sucking in Japanese imports.

Shipping company Nippon Yusen was a notable faller after it announced an 88% dive in full-year earnings.

Earth moving equipment maker Komatsu dug itself into a hole after newspaper reports speculated that operating profits in the current financial year may halve.

Hong Kong shares ended an otherwise strong week on a mixed note, with the Hang Seng index edging up 10 points to 14,119.

Clothing company Esprit Holdings, already under the cosh after European rival Hennes & Mauritz declared disappointing results, fell further after the surprise resignation of Thomas Grote, president of the Esprit brand. Grote is the second high profile departure from Esprit in the last year.

News that prices of luxury homes in Hong Kong had risen gave a lift to Han Lung Properties.

Exporters such as Walmart supplier Li & Fung were friendless after shipments fell the most in 54 years in February. Hong Kong’s exports slumped 23% in February following January’s 21.8% fall.

For stock market quotes, company information and stock charts, click here

Oil and gold rise after gloomy GDP data

The worst US GDP data for 26 years sent investors scurrying for the safety of gold, pushing the April futures contract up to $940, up $4.20 on the day.

US GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2% but better than consensus forecasts from economists of a 6.6% fall.

Meanwhile, the appeal of gold as a safe asset was further enhanced by news that the total number of US unemployed rose to a record 5.56m, although the dollar’s strength limited the extent of gold’s gains.

The oil price was also on the rise, with the April contract rising above $54 a barrel, reversing Wednesday’s losses when the Energy Information Administration revealed that crude inventories rose by 3.3m barrels last week.

Forex

Dollar dominant

US GDP data that was not as bad as feared prompted support for the greenback Thursday. Though US GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2%, it was still better than consensus forecasts from economists of a 6.6% fall.

Sentiment towards the dollar was also boosted by the relative success of the US Treasury’s auction of seven-year notes. The Treasury sold $24bn of notes at a yield of 2.384%.

The euro was out of favour after data from the European Central Bank (ECB) showed a slowdown in the growth of private sector lending. The aggregate value of loans was 4.2% higher in February than a year earlier, compared with a 5% year-on-year gain in January. The figures are likely to add pressure to the ECB to cut interest rates some more this year, which will diminish the appeal of the euro.

Sterling also fell back in New York trading despite a good response to the sale of index-linked gilts due to mature in 2022, which was oversubscribed. The auction result came as a relief after the flop the previous day of the auction of 40-year gilts.

The pound fell back by almost a cent, to $1.4444 in New York, having earlier made headway in London trading, where it reached $1.4562. However, even in London the currency finished below its best levels of the day after UK retail sales data revealed a far bigger than expected 1.9% drop in sales from the previous month. The City had predicted a fall of

Discover the best (and worst!) performers on the NASDAQ, Euronext, FTSE and other global markets. Click here.

Silicon Investor Services