Stocks on both sides of the Atlantic weakened overnight as new home sales in the US plunged unexpectedly -- lifting anxiety that the housing market is deteriorating fast. Sales were forecast to rise 2.3 per cent in March following a 4.5 per cent drop the month prior. Instead, they fell 14.5 per cent. Unfortunately, that wasn’t where the bad news ended. Earnings reports out overnight were mixed and it was the bad news that got most of the attention, such as disappointing earnings from AT&T and Amgen and this also weighed on sentiment.
Equities were lower on Wall Street, with the S&P500 down 0.2 per cent (1875), the Dow was off 12 points (16501) and the Nasdaq was 0.8 per cent lower (4126). By sector, we saw decent gains in energy stocks, but tech and telecommunications saw solid falls. Over in Europe, investors had that poor US data to deal with, and of course rising tensions in Ukraine. Poor results from Ericsson and ARM also hit sentiment. In the end, the Dax closed 0.6 per cent lower, the CaC was off 0.7 per cent and the FTSE100 was 0.1 per cent weaker.
Commodities had a mixed session. WTI was off again, but only 0.3 per cent this time (following a 2 per cent-plus slump yesterday), after the EIA reported that crude stockpiles are at their highest in 83 years. WTI stands at $101.5, while Brent is at $109.12 (also down 0.3 per cent). In the metals space, gold is up smalls to $1284, while silver is up 0.4 per cent and copper is 0.3 per cent higher.
Forex markets saw small moves generally. On a 50-pip range, the euro is little changed as I write, at 1.3817, so just off smalls. Similarly the yen did little and is at 102.5. Sterling was the biggest mover of the majors, down 50 pips to 1.6781. As for the Australian dollar, having dropped a big figure after yesterday’s CPI numbers, the currency did nothing and sits at 0.9292.
Rates ended little changed with the yield on the 10-year US Treasury note sits at 2.69 per cent, little changed from 2.70 per cent at 1630 yesterday. The 5-year yield was at 1.717 per cent from 1.729 per cent, and the 2-year sits at 0.429 per cent from 0.44 per cent.
Elsewhere, the Reserve Bank of New Zealand hiked its cash rate 25 bps to 3 per cent this morning. The bank noted that the expansion had considerable momentum, and that they hiked rates to ensure it could be sustained. Over in the UK, the Confederation of British Industry reports that business optimism spiked higher, from 21 to 33 in April, which is the best result since 1973. New Orders were the best since 1995 and expected output over the next three months is at the strongest level since 1976. Finally, eurozone manufacturing PMIs pushed higher as well, rising to 53.3 April from 53 the month prior.
In markets today, the SPI suggests it should be a sluggish session for the local market, with the SPI only up 11 points, although it is still up. Otherwise there isn’t lot of data or anything for our region. Tonight there are a few things worth watching. We see the German IFO survey at around 1800 AEST, and then for the US, durable goods orders are out alongside jobless claims and the Kansas City Fed manufacturing index.
Have a great day.