** 31/01/11 - 8.43am - by James Gerrish**
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S&P/ASX 200 (Australia) -
Dow Jones Industrial Average (US) -
FTSE 100 (UK)
A big night in world markets Friday with political unrest in Egypt prompting selling in equities. The Egyptian market was off 16% in two days at the end of last week before trade was suspended. In the US, the market was down sharply on Friday.
The DOW JONES lost -166 points or -1.39% to close at 11823. In the UK, the FTSE 100 was closed for the session while locally, SPI FUTURES were pricing in a drop of -49 points.
It was actually interesting on Friday night that we didn't see a lot more buying in the USD. Generally when we see any large scale political unrest the USD spikes sharply. It was certainly higher on the session however it wasn't as strong as i would have expected - instead, base metals, Crude and Gold saw the majority of buying.
Oil was up 4.7% and this is due to the proximity of the unrest to the Suez Canal - a major Oil transport route.
We also saw some fairly strong GDP numbers come out of the (US
GDP-Adv. (For: Q4 , Actual: 3.2%, F/Cast: 3.7%, Prior: 2.6%) - they were marginally below expectations however showed the US is starting to grow strongly - with consumers starting to thaw out somewhat.
Gold was obviously higher on the unrest and traded up from a 4 month low. I do think the market looks a little vulnerable here short term and the unrest in Egypt may give a reason to take profits off the table however the longer term picture still looks positive. US reporting has been very strong with more than 75% of companies beating expectations.
A sharp sell off early this morning so step back and see how things pan out by 10.30am - Try to avoid getting caught up in the noise.
James Gerrish
(02) 9375 0117
