The following is posted on the daytrading thread by Highlandlad. Worth noting re Copper miners today
Morning traders.
Market wrap:
Australian stocks are pointed south this morning after Euro-zone jitters pushed US stocks, oil, copper and gold to multi-month lows overnight.
The June SPI 200 futures contract ended the night session 31 points or 0.7% weaker at 4266 as Greece's political deadlock dragged on, an anti-austerity party won a regional election in Germany and the cost of insuring against a Spanish default reached a new high.
The S&P 500 slumped to its lowest close in three months, dropping 1.11% as an intraday recovery faded in the final hour of trade. The Dow fell 125 points or 0.98% for its eighth losing session in the last nine. JPMorgan was the Industrial Average's worst performer for a second day, down 3.2%. The Russell 2000 index of small caps gave up 1.41%.
"The fear factor is definitely higher," a spokesperson for Huntington Asset Advisors in the US told Bloomberg. "The whole European political situation is really the focus at this point. Nobody really knows what's going to happen next and the market hates uncertainty more than anything."
Heavy declines in Europe set the tone for the session as Greece's failure to form a coalition government raised the prospect of fresh elections and a possible exit from the euro. The Athens General index plunged 4.6%, Germany's DAX 1.94%, France's CAC 2.29% and Britain's FTSE 1.97%.
Bond markets also flagged increasing concern, with the yield on Spanish 10 year-bonds climbing 22 points to 6.22% and Italian yields to 5.73%, borrowing levels considered unsustainable in the long term. Yields have been increasing since elections in Greece, France and Germany showed anti-austerity sentiment in Europe on the rise.
A flight to safety saw money flow out of commodities and into the US dollar and government bonds from the US and Germany. Oil reached its lowest price since December after Saudi Arabia's oil minister said prices were too high. West Texas crude for June delivery was recently down $2.08 or 2.2% at US$94.05 a barrel for the night and nearly 10% for the month.
A range of industrial metals hit multi-month lows as China's economic slowdown continued to reverberate. Copper, aluminium, tin and zinc dropped to their lowest price in four months and nickel found a new 2012 low. In London, copper fell 2.4%, aluminium 0.9%, lead 1.8%, nickel 1.45%, tin 1.1% and zinc 1.55%. US copper for July delivery was recently down 14 cents or 3.7% at $3.51 a pound.
"The euro-zone remains in focus and the break below key support at $8,000 a tonne saw further liquidation in copper with the market still under heavy pressure from macro jitters and also following disappointing euro-zone manufacturing output," an analyst at VTB Capital told Reuters. "The Chinese reserves cut provided very little support with the market largely ignoring it and hoping for a rate cut in the future instead."
Gold continued to trade with risk assets, joining a list of assets at their lowest level since December. Gold for June delivery was lately off $28.10 or 1.8% at US$1,555.90 an ounce.
"Gold is getting clobbered again," the head trader at Kingsview Financial in the US told MarketWatch. "Gold in the last year has really become just another risk asset."
TRADING THEMES TODAY
ON THE DEFENSIVE: Hopes that our market was starting to build a short-term bottom appeared to wither overnight in a wave of grim headlines from Europe. Ratings agency Moody's underlined that theme in the last hour by announcing downgrades for 26 Italian banks following the close of regular trade on Wall Street. With no major US economic news scheduled, traders had nothing to focus on last night but Europe's woes and China's slowdown. Hopefully that will change as a busy week for macro-economic US news gets underway tonight. In the meantime, our market may test a four-week low today after a bleak session on commodity markets. Small caps, banks and resource stocks copped the brunt of the selling in the US - and that doesn't leave much on the ASX!
ECONOMIC NEWS: The minutes from the last Reserve Bank meeting are due at 11.30am EST, along with a separate report on new motor vehicle sales. European finance ministers meet tonight. Also due in Europe: economic sentiment and GDP figures. The schedule in the US includes consumer inflation, retail sales, the Empire State Manufacturing Index, long-term purchases, business inventories and the house price index.
Good luck to all.
CDU Price at posting:
$3.52 Sentiment: Buy Disclosure: Held
