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Fw: US market rebounds on positive signs of economic recovery Inbox | | | | | From: NetResearch Asia [mailto:postman@netresearch-asia.com]
Sent: Wednesday, June 26, 2013 10:03 AM
To: NetResearch Asia 26 Jun 2013
Subject: US market rebounds on positive signs of economic recovery
Pre-Market Open Commentary for 26 June 2013
( CO. REG. NO.
199904258C )
DJIA: 14760.31 +100.75
Nasdaq Composite: 3347.89 +27.13
Good morning, fellow investors
Following a steep selloff the previous day, US stock market staged a
broad-based rally on Tuesday as signs of strength in the US economy
overshadowed concerns about China’s credit problems.
The latest housing data showed a broad-based recovery in the US housing
market with home prices rising strongly in April, by 2.6% MoM and 11.6% YoY
in the top 10 markets and 2.5% MoM and 12.1% YoY in the top 20 markets,
according to the S&P/Case-Shiller Home Price Indices. However, going
forward, rising mortgage rates and signs of easing demand-supply imbalance
are likely to mitigate sharp gains in property prices. Further, new home
sales also exceeded expectations, rising 2% in May to a seasonally adjusted
rate of 476,000 units.
Consumer confidence grew further, surging to its highest level since
January 2008, with the Conference Board index rising to 81.4 in June, the
third consecutive month of gains, led by improving jobs market conditions.
However, the recent market turmoil may dampen sentiment in July.
Adding to the latest sign of a pick-up in the US economy, orders for
long-lasting US manufactured goods rose more than expected in May rising
3.6%, against expectations of a gain of 3.0%, after rising 3.5% in April.
More importantly, non-defense capital goods orders excluding aircraft, a
gauge of planned business spending, increased for a third straight month,
rising 1.1% in May.
Investor confidence further picked up after the Chinese central banks
allayed fears of a credit crunch in the banking system, commenting that the
recent spike in interbank market rates were due to seasonal factors and
will gradually ease.
On the corporate front, shares of Lennar rose 0.7% after the homebuilder
posted earnings that exceeded expectations which CEO Stuart Miller further
extrapolated to a solid housing recovery. Other home builders including
Beazer, Pulte and DR Horton also gained following the news.
The three major US indices bounced with the Dow Jones Industrial Average
gaining 0.69% while the S&P 500 rose 0.95% to close at 1588.03. The Nasdaq
advanced 0.82%.
Market will have a broader assessment of US economic health through the
release of a third estimate of 1Q2013 gross domestic product (GDP) on
Wednesday; the second estimate for 1Q2013 GDP rose 2.4% in the quarter.
Additionally, focus will be on demand for the scheduled auction of US$35bil
in five-year Treasury notes and the earnings results of General Mills due
on the same day.
Crude oil for August delivery rose US$0.14 a barrel, or 0.15%, to settle at
US$95.32 a barrel.
In Singapore today:
Singapore shares staged a technical rebound on Tuesday following steep
losses the previous day. Sentiment further improved through the session on
rumours that the Chinese central bank will hold a press conference with
financial regulators to address liquidity conditions in the Chinese
financial market, which helped the Shanghai Composite index claw back steep
losses of up to 5% to close 0.2% lower. After the market close, the
People's Bank of China addressed concerns of a cash squeeze, explaining
that seasonal factors that led to tight liquidity would fade and that the
central bank would guide interbank rates. At closing, the benchmark STI
index advanced 15.62 points, or 0.51%, to close at 3089.93 on light bargain
hunting. For every stock that rose, 1.3 fell. Turnover was 2.1 bil shares
with a value of $1.6 bil traded.
Yesterday, the Ministry of National Development (MND) released the 2H2013
Government Land Sale (GLS) Programme, trimming the supply of land for
private homes and executive condominiums (ECs) in the confirmed list to
5,960 private homes, the lowest level since 1H2010 and a 14% reduction from
6,935 units for 1H2013. Excluding ECs, the supply of private homes in
2H2013 of 3,175 units, is 17% lower compared to 3,825 units in 1H2013. The
2H2013 GLS appears to be part of the government’s effort to rein in high
land bids and also took into account pipeline supply of completed units and
rising interest rate environment.
Expect the local bourse to extend gains today following encouraging signs
of US economic recovery and easing fears of a credit crunch in the Chinese
financial system that threatens economic growth. | |
....
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26-Jun 2013 Wednesday
12:13 PM (3960 days ago)
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