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Major US stock indices rise following progress in fiscal cliff wrangling | | | | | From: NetResearch Asia [[email protected]]
Sent: Thursday, December 06, 2012 9:56 AM
To: NetResearch Asia 6 Dec 2012
Subject: Major US stock indices rise following progress in fiscal cliff
wrangling
Pre-Market Open Commentary for 06 December
2012
( CO. REG. NO.
199904258C )
DJIA: 13034.49 +82.71
Nasdaq Composite: 2973.70 -22.99 Good morning, fellow investors
Following a volatile trading session, the US stock indices closed higher,
with the exception of the Nasdaq, as sentiment improved following
encouraging comments from President Obama suggesting a potential near-term
resolution to the "fiscal cliff" wrangling in Washington. President Obama
told members of the Business Roundtable, a group of chief executives, on
Wednesday that a fiscal cliff deal was possible "in about a week" if
Republicans acknowledged the need to raise taxes on the wealthiest
Americans.
Markets were further lifted by positive economic news. New orders received
by US factories unexpectedly rose by 0.8% in October, for the second
straight month and exceeding expectations of a flat reading, from a 4.5%
rise in September as demand for motor vehicles and a range of other goods
offset a slump in defence and civilian aircraft orders, a hopeful sign for
the manufacturing sector. An index of activity in the services sector of
the economy ticked higher in October.
However, on the jobs front, report from payroll processing firm ADP showed
a slowdown in the labour market with 118,000 private jobs addition in
November, fewer than expected, but largely the result of Superstorm Sandy.
The highly anticipated nonfarm payroll report this Friday is also likely to
show a weak month of jobs growth, skewed dramatically by temporary effects
from Superstorm Sandy and market is expecting 77,000 jobs addition in
November, a steep drop from the 171,000 jobs created in October and the
unemployment rate is expected to tick up to 8%, from 7.9% in October.
On the corporate front, banking shares were lifted after Citigroup
announced plans to cut 11,000 jobs (about 4% of its workforce) and take a
US$1 bil charge in 4QFY12 as part of a "repositioning" effort under newly
appointed CEO Michael Corbat. Shares of Citigroup jumped 6.3% to US$36.46.
The major US indices closed largely higher with the Dow Jones Industrial
Average gaining 0.64% while the S&P 500 rose 0.16% to 1409.28. However, the
Nasdaq Composite index severely underperformed, retreating 0.77% led by a
6% fall in Apple shares after a consultant's report about the company
losing share in the tablet market to Google, Amazon and Samsung and reports
that margin requirements had been raised by at least one clearing firm, as
well as year-end tax selling ahead of a possible rise in capital-gains tax
rates next year.
On Thursday, market will have a further sense of the employment conditions
from a Challenger job-cut report and initial jobless claims reading.
Crude oil January delivery lost US$0.62 a barrel or 0.70%, to settle at US
$87.88 a barrel.
In Singapore today:
Asian stock markets edged higher on Wednesday led by sharp gains in Chinese
equities on optimism over stable economic growth following encouraging
comments from new Communist Party chief Xi Jinping as he laid out his
economic agenda ahead of the party’s central economic planning meeting
later this month. The priorities in his economic agenda include tax reform,
urbanization and allowing the market to play a bigger role in setting
resource prices, which will help to maintain China’s investment growth
steady. The Shanghai Composite index and the Hang Seng index surged 2.87%
and 2.16% respectively while the Nikkei 225 edged 0.39% higher
Singapore shares opened on a positive note and traded firmer throughout the
session on Wednesday, mirroring optimism in the regional markets. At
closing, the STI index edged higher by 13.80 points, or 0.45%, to close at
3075.92 points. For every share that fell, 1.4 rose. Turnover was 2.27 bil
shares with a value of $1.34 bil traded.
Another property developer will take the firm private. SC Global has
launched a $745 mil cash bid, offering $1.80 a share on all outstanding
ordinary shares, to take the luxury developer private.
With few fresh positive leads, expect another day of range-bound trading on
the local bourse, with selective buying interest on penny caps and
situational plays.
This morning, we have part 3 of our 4-part banking sector report on our
website.
1. Singapore Banks Quarterly: 3Q12 Results Review (Part 3) (premium)
China RMB trade loans lost steam [read the report]
2. Chartzones – 6 December 2012 (premium)
Consumer, Telecoms, Banks and Transport Stocks [read the report]
3. Singapore Banks Quarterly: 3Q12 Results Review (Part 2) (premium)
Interest Income - NIMs contraction narrowing [read the report]
4. Chartzones – 5 December 2012 (free)
Technology Stocks [read the report]
5. Chartzones – 4 December 2012 (free)
Media, China Stocks and Technology Stocks [read the report]
6. Singapore Banks Quarterly: 3Q12 Results Review (Part 1) (premium)
Strongest and most profitable bank [read the report]
7. Hisaka Holdings - 2H12 results update (free)
Recovery delayed [read the report]
8. Etika International Holdings - 4QFY12 results update (free)
Reaping fruits of labour in FY13 [read the report] | |
....
|
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