need2know: Weak lead from Wall St

Local stocks appear set for a lower open on a weak US lead.
杭州龙凤

What you need2know this Monday morning:

• SPI futures down 16 points at 5456

• AUD at 90.38 US cents, 92.97 Japanese yen, 65.13 Euro cents and 54.00 British pence.

• On Wall St, S&P500 +0.1%, Dow Jones +0.2%, Nasdaq -0.4%

• In Europe, Euro Stoxx 50 -1.6%, FTSE100 -1.1%, CAC 1.2%, DAX -2%

• Spot gold down 0.8% to $US1339.98 an ounce.

• Brent oil is at $US109.00 per barrel.

• Iron ore tumbles 2.3% to $US114.20 per metric tonne.

What’s on today

Australia:  No local reports.

Stocks to watch

Holding EGMs today: Northern Resources, Intermoco and Rift Valley Resources.

Deutsche Bank has increased its 12-month price target on carsales爱杭州同城论坛m to $11.90 a share and continues to recommend buying the stock.

Macquarie Private Wealth has a ‘neutral’ rating on the shares of Telstra, with a 12-month target of $4.80.

Morgan Stanley has increased its price target on Seven Group Holdings to $8.50 a share.

Currencies

The US dollar climbed on Friday, boosted by an unexpectedly large jump in American jobs growth that set off enough buying to lift the greenback from a four-month low.

The US dollar index, a composite of six currency pairs which earlier on Friday had hit a bottom of 79.433 last seen on October 29, reversed course after the release of February’s employment data, touched a high of 79.847, and was ahead 0.07 per cent for the day at 79.710 late on Friday.

Commodities

Benchmark London Metal Exchange copper for delivery in three fell nearly 4 per cent to $US6780 per tonne, its lowest since late July last year, amid renewed concerns about China’s economy. It ended at $US6782 per tonne from a close of $US7055 on Thursday.

Three-month nickel on the LME was last bid down 1.13 per cent at $US15,295 a tonne from $US15,470 at the close on Thursday. The contract had risen for six sessions on worries Indonesia’s ban on ore exports may soon tighten global supply as Chinese stockpiles run out.

China’s top steel producing province Hebei will shut more outdated steel capacity this year if market conditions allow, the governor said, with more than 10 per cent of its steel companies in dire straits.

United States

The S&P 500 ended at a record closing high for the second day in a row. Friday’s milestone also was the S&P 500’s fifth record closing high in the past seven sessions. But the overall sentiment was cautious and trading was volatile throughout the session.

The CBOE Volatility Index or the VIX, Wall Street’s fear gauge, fell 0.7 per cent to close at 14.11. But VIX April and May futures were up at 15.83 and 16.45, respectively.

The intermediate-term picture of the stock market remains bullish, but “the overbought conditions are building and a sharp, but short-lived correction can be expected at any time,” said Larry McMillan, president of McMillan Analysis Corp, in a note to clients.

The US Labor Department said US employers added 175,000 jobs to their payrolls in February. Economists had expected a gain of 149,000 jobs, according to a Reuters poll.

Europe

European shares fell on Friday, amid growing tension over Crimea, as investors tried to shield themselves from the impact of any confrontation between Russia and Ukraine on the weekend.

Investors have piled into the options market for protection against any future fall in Germany’s DAX, with Eurex data showing a rise in the ratio between “put” and “call” options.

Puts are a bet on a fall in the DAX; calls a bet on a rise. The put/call ratio on DAX options due to mature in March jumped to 3.13 at the start of March from 1.47 in early February.

What happened on Friday

The benchmark S&P/ASX 200 Index rose 16.4 points, or 0.3pc, to 5462.3. For the week, the index  lifted 57.5 points, or 1.1 per cent.

Today it is five years since the local benchmark index dipped to an intraday low of 3120.8, the nadir of the market’s dive during the global financial crisis.

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