World Daily Markets Bulletin.

ADVFN III World Daily Markets Bulletin

Daily world financial news Monday, 09 September 2013

US Market

The major U.S. index futures are pointing to a higher opening on Monday, with sentiment reflecting modest optimism even as traders scout around for cues amid a lack of any major domestic and corporate catalysts. That said, the markets could derive some encouragement from overseas data and hopes that the Fed will delay the withdrawal of stimulus. Earlier in the global trading day, China reported a let up in consumer price inflation that lent hopes that the nation can embark on further growth boosting measures. Nevertheless, the underlying uncertainty concerning the economic and monetary policy outlook could render the mood cautious. U.S. stocks reversed course and advanced in the week ended September 6th, as bargain hunting on the back of easing economic and geopolitical fears generated strength for much of the holiday-shortened week. Last Tuesday, when the markets opened after the Labor Day holiday on Monday, the major averages closed moderately higher amid some bargain hunting generated by easing concerns about stimulus and the economy. The averages extended their gains on Wednesday, propelled higher by strong auto sales and the lack of any frightening developments regarding the Syrian crisis. The major averages rose yet again on Thursday, thanks to a batch of solid economic data on private payrolls, jobless claims and the services sector. Meanwhile, the release of a lukewarm monthly non-farm payrolls resulted in some indecision on Friday, leading to a mixed close. For the week ended September 6th, the Dow Industrials added 0.76 percent, the S&P 500 Index rose 1.36 percent and the Nasdaq Composite Index gained 1.95 percent. Among the sector indexes, the NYSE Arca Biotechnology Index, the Philadelphia Oil Service Index and the NYSE Arca Securities/Broker Dealer Index added 4.99 percent, 4.18 percent and 4 percent, respectively for the week. The Philadelphia Semiconductor Index rose 3.80 percent compared to a 3.68 percent advance by the NYSE Arca Airline Index.

US Economic Reports

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With the monthly jobs report not offering much clarity on the monetary policy outlook, traders are likely to focus on the unfolding week's economic data. The spotlight is likely to be on the Commerce Department's retail sales report for August, the jobless claims report and the preliminary results of a consumer sentiment survey by Reuters and the University of Michigan. The Federal Reserve's consumer credit report for July, the Commerce Department's wholesale and business inventories reports for July, the Labor Department's import and export price indexes and the producer price inflation report, both for August, and the Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week. The Federal Reserve is scheduled to release its consumer credit report for July at 3 pm ET. Economists expect outstanding consumer credit to increase by $12.3 billion in July. In June, outstanding consumer credit rose by $13.80 billion from the previous month or at a seasonally adjusted annual rate of 5.9 percent. Non-revolving credit tied to auto loans rose by $16.50 billion, while revolving credit related to credit cards fell by $2.7 billion.

Stocks in Focus

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Jacobs Engineering announced an agreement to buy Australian professional services firm Sinclair Knight Merz for $1.2 billion. The company expects the deal to be completed by the first quarter of 2014. Smithfield Foods (SFD) and Shuanghui International announced that they have received clearance from the Committee on Foreign Investment in the U.S. for their proposed merger. The proposed deal has also received merger clearance in Ukraine. Smithfield shareholders are scheduled to vote on the deal at a special shareholders meeting on September 24th. SHFL Entertainment reported third quarter non-GAAP earnings of 16 cents per share on revenues of $73.5 million, up 79 percent year-over-year. The results trailed expectations. Casey's General , Pep Boys and PVH are among the companies due to release their quarterly results after the close of trading.

European Market

European stocks opened lower and have been trading mostly below the unchanged line. In corporate news, GlaxoSmithKline (GSK) confirmed that it has reached an agreement to sell its nutritional drinks brands Lucozade and Ribena to Suntory Beverage & Food for $2.11 billion in cash. On the economic front, the results of a survey by Sentix showed that its investor confidence index improved notably more than expected in September. The index rose to 6.5 in September from -4.9 in August, while economists estimated a more modest improvement to -4. The Bank of France upgraded its third quarter economic growth forecast for France to 0.2 percent from 0.1 percent. The results of a survey by the central bank showed that its business confidence index for France rose 2 points to 97 in August.

Asian Markets

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The major Asian markets advanced across the board, with the Japanese market getting an Olympic boost after Tokyo was chosen to host the 2020 Olympic Games. The mood in the region was also uplifted by some positive data released from China. Japan's Nikkei 225 opened notably higher and moved roughly sideways for the rest of the session. The index closed 344.42 points or 2.48 percent higher at 14,205. A majority of stocks advanced, led by construction and real estate stocks. Taisei, Tokyo Dome, Heiwa Real Estate, Furukawa, Kajima and Shimizu advanced notably in the session, while Sumco slumped. Australia's All Ordinaries opened higher and moved sideways amid some volatility till early afternoon trading. After rising sharply throughout the afternoon, the index moved roughly sideways thereafter before closing up 35.40 points or 0.69 percent at 5,179. Most sectors advanced, with energy, financial and material stocks among the best performers of the session. However, utility and consumer staple stocks bucked the uptrend. Hong Kong's Hang Seng Index closed at 22,751, up 129.43 points or 0.57 percent. Reacting to tame inflation and strong trade data, China's Shanghai Composite Index ended 72.52 points or 3.39 percent higher at 2,213. On the economic front, a report released by the Chinese National Bureau of Statistics showed that Chinese annual consumer price inflation eased to 2.6 percent in August from 2.7 percent in July. The inflation rate was in line with expectations. On a monthly basis, consumer prices rose 0.5 percent. At the same time, producer prices fell 1.6 percent year-over-year in August, declining for the 18th straight month. A report published by the General Administration of Customs on Sunday showed that Chinese export growth picked up to 7.2 percent in August from 5.1 percent in July. However, imports grew at a slower pace of 7 percent after rising 10.9 percent in July, helping to increase the trade surplus further to $28.6 billion from $17.8 billion in July. The surplus was above the $20 billion forecast by economists. The total number of home loans in Australia rose 2.4 percent month-over-month in July, according to a report released by the Australian Bureau of Statistics. The growth was better than the 2 percent increase forecast by economists. A slew of data released from Japan relayed mixed messages about the economy. A report released by the Japanese Ministry of Finance showed that Japan's current account surplus increased to 577.3 billion Yen in July from 336.3 billion Yen in June. However, the trade balance revealed a worse than expected deficit of 943.3 billion yen, as the 21 percent annual import growth was strong than the 11.5 percent increase in exports. Revised second quarter GDP estimates released by the Cabinet Office showed that the nation's economy grew at a faster than initially estimates pace of 0.9 percent compared to the previous quarter. Economists estimated 1 percent growth for the quarter. The consumer confidence index compiled by the Cabinet Office based on its survey showed a decline to 43 in August from 43.6 in July. Economists had expected an improvement in the index to 44. The Bank of Japan reported that overall bank lending rose 2.3 percent year-over-year in August following a 2.3 percent increase in July.

Currency and Commodities Markets

Crude oil futures are receding $0.48 to $110.05 a barrel after advancing $2.88 or 2.68 percent to $110.53 a barrel in the week ended September 6th. Last Tuesday, oil rebounded by $0.89 a barrel only to decline by $1.31-a-barrel on Wednesday despite the risk appetite in the markets. The commodity rose by over $1-a-barrel on Thursday, thanks to the solid economic data. Oil advanced yet again on Friday, rising by over $2-a-barrel in the session to end the week higher. Gold futures, which fell $9.60 or 0.69 percent to $1,386.50 an ounce in the previous week, are currently rising $0.40 to $1,386.90 an ounce. The U.S. dollar gained ground against the euro but eased against the Yen in the week ended September 6th. The dollar added 0.10 percent against the euro before ending the week at $1.3179. At the same time, the greenback edged down 0.22 percent against the yen. The dollar is currently trading at 99.40 Yen and is valued at $1.3207 versus the euro.