Sun, 25th June 2017

Anirudh Sethi Report


Archives of “ftse 100 index” Tag

Overnight US Market :Dow closed +118 points ,Dow, S&P 500, Nasdaq blow past old records

Stocks were in rally mode Thursday as all three of the major indexes jumped to new all-time closing highs.

The Dow Jones industrial average jumped 118 points, or 0.6%, to 20,172.40.

Up by the same percentage were the S&P 500 and the Nasdaq composite — to their new highs of 2307.87 and 5715.18, respectively.

Investors weighed earnings from a batch of companies, including Twitter, Kellogg and Viacom. Energy stocks led the gainers as the price of crude oil headed higher. Utilities were down the most.

Benchmark U.S. crude gained 66 cents, or 1.3%, to $53.00 a barrel in electronic trading on the New York Mercantile Exchange, while Brent crude, the benchmark for international oil prices, added 40 cents to $55.52 a barrel.

In earnings news:

Overnight US Market :Dow closed -63 points (Intraday was down 180 pts )

Stocks dipped Thursday but finished off early, sharp lows, giving back  gains from the day before.

The Nasdaq composite, off 0.3%, snapped a seven-day winning streak and posted its first loss of 2017.

Losing as much as 180 points earlier, the Dow settled for a 63-point loss, 0.3% lower, to 19,891 even. The S&P 500 slipped 0.2%.

Financial, industrial and technology stocks were down the most, while phone company and real estate stocks edged higher. Investors were turning their focus to the next wave of corporate earnings reports in the weeks ahead.

Banks and other financial companies were down as the yield on the 10-year Treasury note fell. Lower yields mean lower interest rates on loans and lower profits for banks. The yield on the 10-year Treasury slipped to 2.35% from 2.37% late Wednesday.

Benchmark crude oil finished up 76 cents, or 1.5%, to $53.01 a barrel in New York.

In Europe, Germany’s DAX ended down 1.1%, while France’s CAC 40 lost 0.5% despite new data showing eurozone industrial production jumped 1.5% in November. Britain’s FTSE 100 ended flat. In Asia, Japan’s benchmark Nikkei 225 dropped 1.2%. Hong Kong’s Hang Seng dipped 0.5%, while Australia’s S&P/ASX 200 slipped 0.1%. South Korea’s Kospi bucked the trend to rise 0.6%.

Overnight US Market :Dow closed + 40 points

Stocks closed slightly higher Monday   with technology and industrial companies rising but the Dow Jones industrial average once again was unable to breach the 20,000 mark.

The Dow Jones index, which closed last week at 19,843.41, has made several attempts to break through the 20,000 mark but each time it’s fallen just short. The index has rallied strongly since the election of Donald Trump as the next U.S. president amid hopes that the incoming administration will be kind to business and back more spending on such things as infrastructure.

“I would be surprised if we’re not trading above 20,000 before the end of the year,” said Craig Erlam, senior market analyst at OANDA. “The Trump rally has stalled a little in recent sessions but so far, I’m seeing few signs that we’re going to see the year out on a negative note.”

The Dow rose 39.65 points, or 0.2%, to close at 19,883.06. The Standard & Poor’s 500 index gained 0.2% to 2262.53 and the Nasdaq composite added 0.4% to 5457.44.

Bond prices rose. The yield on the 10-year Treasury note slid to 2.53% from 2.60% late Friday. That sent interest rates lower and affects the profits banks make from mortgages and other loans. Bank of America shed 1.1% and MetLife  sank 2%.

Government bond yields have climbed recently. Last week the yield on the 10-year note rose to its highest level in more than two years.

In Europe, the FTSE 100 index of leading British shares was up 0.1% while Germany’s DAX gained 0.2%. The CAC-40 in France was 0.2% lower.

Overnight US Market :Dow closed -21 points

Stocks ended mixed Friday after news that the jobless rate has plunged to a nine-year low.

Banks slipped after a huge rally over the last few weeks. Bond prices rose after a string of steep declines, sending yields lower. The Dow Jones industrial average, which closed at a record high a day ago, is down slightly.

The Dow Jones industrial average lost 0.1%. Goldman Sachs, which closed at a nine-year high Thursday, was responsible for the entire loss as it fell 1.5%.

The Standard & Poor’s 500 index was fractionally higher. The Nasdaq composite ended 0.1% higher.

U.S. employers added 178,000 jobs in November as hiring remained steady. However, fewer people looked for work and hourly wages slipped. The results cemented market expectations that the Federal Reserve will raise interest rates later this month. A very weak jobs report would have the last thing that might have stopped the Fed from raising rates.

Overnight US Market :Dow closed 24+ points

The three major stock indexes moved slightly higher Tuesday as health-care companies rallied on the results of UnitedHealth Group, outweighing declines in energy companies.

Tiffany jumped after it reported better quarterly results than analysts expected.

The Dow Jones industrial average and S&P 500 inched up 0.1% each. The Nasdaq composite climbed 0.2%. Earlier, it hovered around its record closing high of 5,398.92, set Friday, before scaling back a bit.

It was the second straight down day for the broad Russell 2000, however, which slipped 0.1%. Monday’s skid of 1.4% snapped an amazing 15-day win streak, its longest in 20 years.

OPEC nations meet Wednesday to try to finalize a deal that would reduce oil production, but the possibility of a deal seems to be falling apart. Saudi Arabia’s representatives have sounded skeptical while Iran is hesitant to limit its own output as it ramps up production following years of international sanctions.

90 Days Later: Still No Signs Of Brexit ‘Doom & Gloom’

For the first half of the year, we were warned early and often by authorities that the Brexit vote could be a calamity for the ages.

For example, the IMF claimed that a “Leave” result would threaten to “cause severe damage”, while Standard and Poor’s said that it would “paralyze” investment in the UK.

But, as Visual Capitalist’s Jeff Desjardins notes, it turns out that the real Brexit casualty isn’t the UK economy – instead it is the reputation of the many professional economists who wrongly predicted doom and gloom as the likely aftermath.


Today’s chart looks at the three months before and after the Brexit vote, which took place on June 23, 2016.

Cairn-Vedanta merger: LIC says still not on board

Financial powerhouse and largest domestic investor LIC today denied having given its nod to the long-pending merger of Cairn India with the parent Vedanta Resources.

LIC, which had expressed concerns over valuation and debt situation of the entity post-merger, owns 9.06 per cent shares in Cairn India as of June quarter and 3.9 per cent in Vedanta as of March.

LIC’s denial came after some media reports said the insurance giant has given nod to the proposed merger of Cairn with Vedanta.

“No approval has been given by LIC and such news is factually incorrect,” the government-run insurance behemoth said in a statement today.

Under the proposed merger, pending since last year, a Cairn India shareholder will get one Vedanta equity share and 7.5 preference shares for every share one holds.

Upcoming Week :Sources of Movement

Investors are under siege.  A growing proportion of bonds in Europe and Japan offer negative yields.  The German and Japanese curves are negative out 15-years, while one cannot find a positive yield among any tenor of Swiss government bonds.   Despite a string of robust data, US Treasury coupon yields are at record lows.

The UK referendum hit an already vulnerable banking system in the eurozone.  Italian banks are on the front burner, but the temperature is rising in Portugal, and this is not to mention the slow boil at some of the largest European banks, specifically singled out by the IMF as posing the greatest systemic risks.

Politics add an additional wrinkle.  Both of the two main parties in the UK are divided. The leader of the UK’s Independent Party resigned.   If Labour was not doing a fine job of destroying itself, Cameron, in among his last acts as Prime Minister, will give it a helping hand.  He will have parliament vote on the renewal of the UK nuclear deterrent (Trident), and it will further split Labour. Corbyn has been long opposed, while the Labour MPs typically favor.  There is an attempt by the Labour MPs to block Corbyn’s name from even appearing on the leadership ballot.  

The US political parties hold their conventions over the next few weeks, though it is possible that Trump announces his vice-presidential running mate in the week ahead.  Indiana Governor Pence appears to be edging out former Speaker of the House Gingrich.  Perhaps to prevent the Republican Party to dominate the news cycles, it would not be surprising if Sanders were to endorse Clinton either in the week ahead of the following week.

Iron Ore Price Crashed to 6 Month Low

Iron ore prices slumped in Asia on Monday as data showed a rise in port stocks of the steel-making ingredient.

Iron ore futures on the Dalian Commodity Exchange dropped as much as 6 per cent to their lowest level in three months. In the physical market, iron ore fell 5.4 per cent to $52.7 a tonne, according to an assessment from the Steel Index.

That comes after data last week showed that stocks of iron ore in China have risen above 100 million tonnes, according to a survey of 45 ports by Mysteel.

A burst of speculative trading in China earlier this year drove iron ore prices up to over $70 a tonne in April.

Shares of large miners dependent on iron ore are also down, with BHP Billiton off 1.86 per cent this morning and Rio Tinto down 1 per cent.

Iron ore slump continues ,Down 5.1%

Iron ore futures on China’s Dalian Commodity Exchange are down 5.1 per cent at Rmb363.5 per tonne in afternoon trade there, having dropped as much as 5.9 per cent in earlier trade.

Since hitting multi-year lows last December on a combination of growing supply and fears of an economic hard landing in China, prices for the steelmaking ingredient rose by just over 70 per cent to Rmb479 a tonne in April.

But in the past three weeks, the contract’s value has fallen by a quarter.

It’s a similar story for rebar, a steel product used in building construction, which has fallen just as much over the same period, including a 4.7 per cent decline today

Recently, management at BHP Billiton and Rio Tinto, two of the industry’s biggest iron ore miners, warned that the rally in the first four months of this year would be temporary.

On the other hand, oil began a rally from multi-year lows in January, and hasn’t suffered the same fate in recent weeks as iron ore and steel. In fact, the black stuff is hovering close to its highest level in about six months.

In Sydney, BHP shares were down 2.5 per cent, Rio was 2.8 per cent lower, while Fortescue Metals was down 1.7 per cent. The broader S&P/ASX 200 ended 0.6 per cent lower.