Morning traders. Thanks Trees and after-market regulars.
Market wrap:
Shares look set to extend yesterday's losses at today's open after Wall Street hit reverse and weak Chinese trade data and analyst downgrades weighed on BHP.
The June SPI 200 futures contract fell 15 points or more than 0.2% to 5935 as US stocks declined amid downbeat expectations for a slew of corporate earnings this week.
The S&P 500 hit a three-week high in early trade before fading to a loss of 10 points or 0.46%. The Dow shed 81 points or 0.45% as General Electric gave back some of Friday's rally, the conglomerate's largest in six years. The Nasdaq ended eight points or 0.15% lower at 4988 after trading above 5000 for the first time in three weeks. With no major domestic economic data to set the agenda, the session was dominated by pre-earnings portfolio adjustments.
“We know this earnings season is not going to look good,” Allan von Mehren, chief analyst at Danske Bank in Denmark, told Bloomberg. “The first quarter’s economic slowdown and stronger dollar has definitely put pressure on profits. The question now will be whether expectations have been lowered enough.”
Of the largest four companies due to report tonight, two retreated and two advanced. JPMorgan Chase gained 0.6% and Wells Fargo 0.5%. Johnson & Johnson dropped 1.48% and Intel 0.63%.
BHP dived 4.19% to a three-month low in the US after soft Chinese trade data yesterday morning was compounded by an analyst downgrade from Citigroup. Citigroup cut its outlook for the iron-ore sector to 'neutral' from 'buy' and downgraded BHP to 'neutral' from 'buy'. Standard & Poor’s reduced its iron-ore price expectations for the next three years and placed several producers on ratings watch. Rio Tinto eased 1.18% in US trade. Spot iron ore for import to China yesterday bounced $1.50 to US$48.80 a dry tonne.
Asian markets yesterday shrugged off the weakest Chinese trade figures in more than a year. China's Shanghai Composite rallied 2.17% and Hong Kong's Hang Seng 2.73% amid expectations of further easing on the mainland as the economy slows.
European markets extended last week's record close despite weakness in miners in the UK. The Stoxx Europe 600 edged up 0.17% as Germany's DAX fell 0.29%, France's CAC added 0.26% and Britain's FTSE lost 0.36%.
Gold stocks dropped 0.72% as a rising dollar pushed the precious metal back below US$1,200 an ounce. Gold for June delivery settled $5.30 or 0.4% lower at US$1,199.30 an ounce.
Oil extended its winning run to a third night. West Texas Intermediate crude oil for delivery in May put on 27 cents or 0.5% to settle at US$51.91 a barrel.
Copper retreated despite news that Chinese imports of the metal increased by 46.4% last month. In London, copper lost 0.8%, lead 0.3%, nickel 1.7%, tin 3.6% and zinc 0.1%. Aluminium improved 0.1%. US copper for May delivery was recently off 0.6% at US$2.72 a pound.
The dollar was this morning buying 75.9 US cents.
TRADING THEMES TODAY
BIG MINERS TO DRAG: A fairly grim night for BHP in the US and UK look likely to ensure the ASX 200's push for 6000 is on hold for another day. The Big Australian is too heavy a burden for the rest of the index to drag up the hill. There was not a lot else to report from the US, with no major economic data or M&A activity. Rallies in Shanghai and Hong Kong have gone parabolic but show no signs of breaking yet. Pity we haven't been pulled along for the ride. Fortunately for traders, the mood at the spec end remains exuberant, verging on frothy. There are warning signs in some of the action, but no signal that the party is ending.
ECONOMIC NEWS: Business confidence data is due at 11.30am EST. A big session ahead tonight in the US includes the first batch of earnings heavyweights, plus retail sales/core retail sales, producer price index/core PPI, business inventories and small business index.
