(THURSDAY 27TH OCTOBER - JAMES GERRISH - 7.31am)...The DOW JONES added +162pts overnight while the S&P 500 put on +1.05%. European mkts were mixed (FTSE up +0.5%, German DAX down -0.51%, French CAC off -0.15%) while locally, the SPI FUTURES mkt is pricing a higher open up +27pts when trading kicks off here this morning.
Yesterday, the S&P/ASX 200 added +14pts or 0.35% to close at 4242 however this was more than 50pts off the session lows are inflation data added to the likelyhood for a rate cut in November.
DOW JONES - Rallied late in the session on reports that EU leaders were approaching some sort of agreement. As it stands, it seems that agreement has been made to leverage the EFSF to 1 trillion euros (4 times leverage) and there is some sort of consensus around the haircut Greek bond holders will need to take (around 50% at the moment with a mix of cash and bonds) but nothing has officially been agreed upon. As one guy put it on Twitter this morning, it seems they've agreed on the Dinner Menu but France and Germany are still debating over the wine selection.
S&P/ASX 200 - Yesterday, the ASX 200 was down -55pts in early trade and looked pretty weak following the drop of more than -260 pts on Wall Street the previous session. All that changed at 11.30am when we got CPI (inflation) data out which pretty much sealed a rate cut for November and maybe another in December. That saw the mkt trade to a high of +30pts before closing up +14pts so a pretty impressive move of 2% from the lows + we once again butted heads with key resistance point that you can see in the chart below. There is a high chance we'll break this today which is a strong technical buying setup.
EUROPE - Still the main game in town and we haven't got the second statement yet which is now overdue. The first meeting involved the 27 Eurozone members and there was a 3 page statement released after this broke up (CLICK HERE TO VIEW). The 17 European Union members then broke off to nut out the details of the plan and as it stands, we're still awaiting an update. We'll keep you posted on the website (www.mymarketview.com.au) when it breaks.
ECONOMIC DATA - European issues aside we got another positive data print from the US overnight with Durable Good Orders coming in well ahead of expected. These are large, long lasting items and when they stripped out more volatile aspects such as aircraft and defense spending the number looked even better + we also had existing home sales that came in at the highest level in 6 months. Both prints support our long held view that the US is not headed for recession.
NAB - Reported this morning with profit up 23.6% at $5.22b and lifted the dividend to 88cps v expectations of 87c. Expectations had been for a 19% lift in profits so they've beat the street here while net interest margins also improved. A good result from NAB and the stock should rise today.
For some Comsec Research on the Banks, CLICK HERE
MODEL PORTFOLIO UPDATES
None this morning
AUSTRALIAN STOCK PRICES OVERNIGHT
In New York, News Corp rose by US$0.02 to US$17.17, equivalent to A$16.53, A$0.07 below its last close on the ASX.
ResMed fell by US$0.11 to US$27.26, equivalent to A$2.62, the same as its last close on the ASX.
In London, Rio Tinto fell 2.5 pence to £33.00, A$0.04 lower in Australian currency terms.
BHP-Billiton rose 8.0 pence to £19.69, A$0.12 higher in Australian currency terms.
Henderson Group Plc fell 2.9 pence to £1.19, A$0.04 lower in Australian currency terms.
