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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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