Daily Analysis – Oil Falls 3%, Equities Trade Narrowly |
Equities
Most Asian markets ended moderately lower on Monday. The Nikkei slid .5% to 9720, thanks to a downgrade of Japanese automakers by Citigroup. Nissan, Toyota and Honda all fell more than 2%. The Hang Seng lost .4%, and the Kospi eased .2%. Australia’s ASX 200 was a notable exception, rallying .6% as shares in mining giant BHP Billiton jumped 3.8%. Chinese trade data showed a trade deficit thanks to commodity imports, fueling investor demand for miners.
European markets also ended lower. The Dax fell .2%, and the CAC40 slumped .6%. Hochtief, a construction service company tumbled 9.5% after cutting its outlook. The FTSE closed down fractionally, as gains in miners largely offset other losses.
US markets ended mixed, as the market shed early gains. The Dow closed flat after rising 64 points earlier, while the Nasdaq and S&P both dropped .3%.
Oil companies fell steeply as the price of US crude dropped 3%. Denbury Resources fell 5% and Anadarko Petroleum slumped 4.3%.
Level3 announced plans to buy Global Crossing, sending shares of Global Crossing up 69%.
Alcoa earnings beat estimates, thanks to surging commodity prices. Nonetheless, shares fell 2% after-hours.
Treasuries and Commodities
Bonds closed flat, with the yield on the 10-year note at 3.57% and the 30-year note at 4.65%. The Treasury will auction 3-year notes on Tuesday.
Most commodities fell, led lower by US crude which dropped 3% to 109.41. Brent Crude fell 2.4% to 123.67 and gasoline futures declined 1.8%. Natural gas rose 1.8%.
Oil Falls 3% After Hitting $113
Gold slipped .8% to 1463.10 while silver closed down 1.3% to 40.08, after rallying up to 40.60 earlier. Copper dropped .9% to 4.46, despite strong imports from China.
Agricultural futures ended mostly higher, as corn rose 1% and sugar gained 1.5%. Soybeans fell 1.7%.
Currencies
The dollar rose marginally against major currencies, as the market moved narrowly following Friday’s steep dollar selloff. The Euro dropped .4% to 1.4430 and the Australian dollar sank .7% to 1.0488 after tagging a new record high of 1.0581. The yen rose .1% to 84.63, and the Swiss Franc rose fractionally.
Economic Outlook
Tuesday’s reports will include International Trade, and Import and Export Prices.
Earnings will be the focus over the next few week as earnings season begins. Investors will be particularly attentive to how the Japanese disaster will impact earnings.
-Bradley Welcher
About the author: BinaryOptionStrategy- David Frank
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