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US market continues its climb on further signs of recovery in job market | | | | | From: NetResearch Asia [mailto:postman@netresearch-asia.com]
Sent: Friday, March 15, 2013 9:49 AM
To: NetResearch Asia 15 Mar 2013
Subject: US market continues its climb on further signs of recovery in job
market
Pre-Market Open Commentary for 15 March 2013
( CO. REG. NO.
199904258C )
DJIA: 14539.14 +83.86
Nasdaq Composite: 3258.93 +13.81
Good morning, fellow investors
US stocks continue to climb on Thursday, with the Dow Jones Industrial
average posting fresh record high for the eighth consecutive day while the
S&P 500 coming within 2 points of its all-time high of 1565.15 set in
October 2007, following stronger than expected jobless claims data.
In the latest sign of the job market recovery gaining traction, the number
of new claims for unemployment fell for the third consecutive week last
week, with initial jobless claims dropping 10,000 to 332,000 last week,
better than expectations of a rise in claims to 350,000. The four-week
moving average for new claims also fell 2,750 to 346,750, the lowest level
in five years. The latest reports reinforced the government payroll report
last Friday which showed that nonfarm payrolls increased 236,000 in
February, with the unemployment rate falling to a four-year low of 7.7%.
A separate report showed that rising costs of gasoline has pushed the
producer price index higher in February with the seasonally adjusted
Producer Price Index (PPI) increasing 0.7% last month after advancing 0.2%
in January. However, underlying inflation pressures remained contained,
with core PPI excluding volatile food and energy costs rising 0.2% after a
similar advance in January. In the 12 months through February, core PPI was
up 1.7%, the smallest rise since January 2011 and following a 1.8% rise in
January. The lack of broad price pressures bodes well as it gives the
Federal Reserve scope to maintain its very accommodative monetary policy
stance even as the job market strengthens. Further, high gasoline prices
have started to decline which will help to keep inflation pressures benign
and boost consumers' purchasing power.
On the corporate front, Samsung is scheduled to unveil its Galaxy S4
smartphone on Thursday in New York City and market has speculating that the
new version will include an eye-scroll function and feature a bigger screen
than the current Galaxy S3. Galaxy S4 is being hyped up as the product
generation that moves Samsung ahead of Apple as the innovation leader.
All the three major US indices rose with the Dow Jones Industrial Average
gaining 0.58% while the S&P 500 rose 0.56% to close at 1563.23. The Nasdaq
Composite index advanced 0.43%.
Market will seek directions from readings on the manufacturing sector
including Empire State manufacturing survey and industrial production and
market is expecting an improvement in these economic readings over the
previous month which could further underpinned market advance.
Additionally, market will get a sense of consumer bahaviour and
particularly on the impact of the increased payroll tax, delayed income tax
refunds and higher gas prices on consumer spending from consumer sentiment
data. Friday also marks “quadruple witching”.
Crude oil for April delivery added US$0.51 a barrel, or 0.55%, to settle at
US$93.03 a barrel.
In Singapore today:
Asian shares trimmed off session lows to close mostly higher on Thursday
with the Nikkei 225 snapping a two-day losing streak to close 1.2% higher
on optimism over monetary stimulus while the Shanghai Composite index and
the Hang Seng index reversed early losses to gain 0.28% each. Defying the
regional trend, Singapore shares declined on profit-taking for the second
consecutive day on concerns that the region’s recent rally may be due for a
correction. At closing, the STI index traded 9.02 points, or 0.37%, lower
at 3279.50. Market breadth recovered through the session with a positive
skew. Turnover was 6.0 bil shares with a value of $1.4 bil traded.
National Development Minister Khaw Boon Wan clarified and assured yesterday
that any fresh property curbs that would be introduced to make public
housing more affordable would only apply to new buyer and not existing HDB
flat owners. The ministry is currently looking at several possible
measures, including the restoration of the old rule requiring owners to
sell flats back only to the Housing Board instead of the open market,
shorter leases and longer minimum occupation periods.
We reiterate our view that the attraction of steep differential pricing
between a new and resale HDB flat ensuing from the latest pricing policy on
new HDB flat as well as strong pipeline supply could draw a pool of home
buyers towards buying a new HDB flat. In light of this, it is likely that
there will be a negative knock-on effect on demand for HDB resale flats
which will dampen prices of HDB resale prices going forward. This in turn
will have a dampening impact on investment and upgraders demand for mass
private residential properties. However, as details of alternative housing
options are still in discussion, the extent of the impact is still
uncertain.
Expect the local bourse to advance, mirroring overnight strength on Wall
Street.
1. Chartzones – 15 March 2013 (premium)
Conglomerate / Industrial and Property Stocks [read the report]
2. Singapore Banks - Part 1 (premium)
2012 Final Results - core operating results in line [read the report]
3. Chartzones – 14 March 2013 (free)
Consumer, Telecoms, Banks and Transport Stocks [read the report]
4. Chartzones – 12 March 2013 (free)
Media, China Stocks and Technology Stocks [read the report]
5. Anwell Technologies - 4Q12 results update (free)
Lights on… Asia [read the report]
6. ASTI Holdings - 4Q12 results update (free)
Continues to realign and consolidate in 1H [read the report] | |
....
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