Featured News
Top Stories 1 of 3
The Overnight Report: Stocks Take A Breather
- Rate this Story
0
0
Print
Email
Order Reprints

- Text Size
February 22, 2012 2:34 PM PST
By Greg Peel
The Dow closed down 27 points or 0.2% while the S&P lost 0.3% to 1357 and the Nasdaq dropped 0.5%.
For the moment, Dow 13,000 seems like a bit of a bridge too far. With the dust now settled in Athens, at least for the time being, Wall Street is probably suffering headline withdrawal. The indices have all rallied around 20% and such a move often brings about at least a pause in proceedings, if not a peak. Now traders have to return to thinking fundamentals again.
More News
Premarket Movers (Acadia Pharmaceuticals, Citigroup, Fossil, Dendreon Corporation, Zynga, Titan Machinery, Staples, Vodafone Group and Corning Incorporated)
LNG-Hungry Japan to Purchase 10% Stake in Australia's Wheatstone Gas Project for $4.4 B
Australian Stock Market Report – Afternoon 5/16/2012
Must Read
And the fundamentals are not so fabulous, at least on developments of the last 24 hours. Firstly, HSBC released its "flash" estimate yesterday of China's February manufacturing PMI and while it saw a gain to 49.7 from 48.8, it's still a number implying contraction. Next, the eurozone released its estimate of the composite (manufacturing and services) PMI for February and it fell to 49.7 from 50.4. One is tempted to respond "well of course, it's Europe", but economists were expecting a move up to 50.8.
Ratings agency Fitch also had something to say about the ratings on Greece's old bonds and new bonds and definitions of default, but I'm not going to dignify the comments with any air time. Suffice to say there are still those, for some strange reason, who panic when ratings agencies open their mouths.
The biggest "new" issue, remains oil. It's not a new issue of course, just one that was a bit overlooked while all the shenanigans were going on in Europe. Tensions between the US and Iran continue to build, and that is reflected in the ever creeping price of Brent. Last night Brent rose US$1.39 to US$123.05/bbl.
The general feeling is that Iran knows it would never be able to out-gun the US, and the US certainly doesn't want to initiate hostilities (unless we're talking loopy Republican candidates, pardon the tautology). On that basis, while a blockade of the Straits of Hormuz is the current fear, no one really expects Iran to try it on. With negotiations going on over nuclear matters and sanctions, it should remain a Cold War. But then no one can really be sure what Israel might do, and therein lies the real threat to otherwise uneasy peace.
West Texas actually fell US30c last night in the new April delivery contract to US$105.95/bbl, but still Americans see any WTI number above 100 as ominous, and which signals the beginning of demand destruction. The US summer driving season is still a few months off but already there is talk of falling demand for gasoline at this level.
Meanwhile locally, Australia's political parody is hardly the stuff to induce confident investment right now.
Which brings us to gold. Last night gold rose another US$21.00 to US$1777.40/oz as the precious metal awakes from the momentary slumber it was in while the recent Greek tragedy played out. It's not that hard to see why. Rising geopolitical tension? Buy gold. Rising oil price threatening CPI inflation? Buy gold. Easy monetary policy from central banks across the world causing monetary inflation? Buy gold. Precious metal analysts and technicians are starting to get excited once more, with that US$2400/oz number again being bandied about (roughly the today's-dollars equivalent of the 1980 peak).
Base metals were otherwise quiet last night after big moves up on Tuesday night and currencies didn't do much either. The US dollar index is up a bit to 79.21 and the Aussie is down a bit to US$1.0640.
The SPI Overnight fell 12 points or 0.3%
Of course locally, we still have the result season to entertain us. Among another plethora of reports today we'll see Toll Holdings ((TOL)) and Tatts ((TTS)).
And we also have Rudi to entertain us ? on Sky Business today at noon and between 7-8pm on Switzer TV.
All
Most Popular Slideshows
Mark Zuckerberg Turns 28: Ten Interesting Facts About The Facebook Founder And His Social Network [PHOTOS]
Top 5 Smartphones for 2012: iPhone 5, HTC One X, PureView, Galaxy S 3, Droid RAZR HD?
Torika Watters, Fiji Beauty Queen, Disqualified From 2012 Miss World Pageant For Age, Not Race [PHOTOS]
Garret McNamara Surfs 90-Foot Wave Off Coast Of Portugal, Top 5 Biggest Waves Ever Surfed
Print
Email
Order Reprints

- Text Size
- Rate this Story
0
0
‘Halo 4’ Box Art Leaks Ahead Of November Release Date [PHOTO]
- Torika Watters, Fiji Beauty Queen, Disqualified From 2012 Miss World Pageant For Age, Not Race [PHOTOS]
- Twitter Fumes After Tommie Frazier Snubbed From College Football Hall Of Fame
- Mitchell Guist Dies at 48: An Appreciation Of 'Swamp People' Star
- Obama Administration Wants Iran Exile Group MEK Off Terrorist List: Report
- ‘Call of Duty: Black Ops 2’ May Keep Same Engine, Zombie Image Leaks
- Speculation Over Dalglish Future Grows As FSG Make Decision
- Pacquiao On Obama: You're Wrong On Gay Marriage, Says Fighter Of President's Evolution
Facebook Share Price Increases as High Demand Closes IPO Orders Early
- Cancelled Shows 2012: ‘CSI: Miami,’ ‘Desperate Housewives’ And 'House' Get The Axe
- Nina Dobrev Gropes Conan O’Brien With Her Feet Using Yoga Move [VIDEO]
- The Personal Gets Political On Long Island: It’s Schimel Vs. Schimel
- JPMorgan Chase Exec Ina Drew Resigns, $2B Trading Debacle Claims Its First Scalp
- Fox & Friends Features Most Uninspiring 'Graduation Speech' Of All Time
- Glitzy Obama-Clooney Fundraiser Breaks Records with $15M
- 35 Bodies Publicly Dumped in Veracruz, Mexico
Join the Conversation
Most popular on IBTimes

