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Daily Market Summary & Analysis, SEPT 08, 2010
September 8, 2010
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Asian equities markets were trading mostly in red Wednesday. Mixed news came from China as its government is considering currencies policies to push up economic recovery. However, the government also said it will put restrictions on the housing market, sending China property stocks to tank. In addition to that, investors continued to worry about the U.S. economic outlook. The bulls were losing the battle and most major indexes closed down in today trading sessions. The Shanghai Composite Index down -0.11% to 2,695.29; the Shanghai 180 A share index down -0.33% to 6,269.57; Taiwanese market TWSE, down -0.42% to 7,851.31; HongKong Hang Seng, down -1.46% to 21,088.86; Singapore STI down -0.81% to 3,011.42; Nikkei down -2.18% to 9,024.60; South Korea, the Kospi down -0.48 to 1,779.22; Australia (the S&P/ASX 200) down -0.49% to 4,537.16; and India market, the S&P/CNX 500 up +0.18% to 4,720.75.
U.S. markets were up due to the strength from the European market as the auction market went well in Europe. Headlines that moved the market today was also coming from Goldman Sachs as the firm is in talk to sell its proprietary trading unit with five buy sides firms, KKR, Perella Weinberg, BlackRock Inc., Pimco, and The Carlyle Group. Michael Kim, an analyst from Sandler O’Neill commented in regard to the reason for this bidding war for GS trading unit, citing for the buyer, it’s to diversify business. “And of course, profit as this unit has been very profitable in the past for Goldman Sachs,” Kim explained. GS shares traded higher, up +1.60% to 147.54.
At 2PM Beige Book was released, the FED highlighted a mixed condition of economic recovery with relatively weak housing, poor job recovery, and cautious consumer sentiment. “Economy continues to grow but with a slower pace. And the bright spot was that consumer spending has picked up in areas such as tourism,” said the FED. President Obama begun the speech on economy right after the Beige Book. It’s important to note that the market had a rally of close to 30% after the President took the Office. “Private sector must be the main engine of our recovery. Thus, the government would give tax cut for companies that create jobs for Americans,” the President explained the proposed fifty billion stimulus Bill on infrastructure and business tax cut.
Stocks rebound across the board after the President’s speech; however, investors were profit-taking into the closing bell. Most indexes closed up only modestly. The DOW closed up +0.45% to 10,387.01, the Nasdaq up +0.90% to 2,228.87, and the S&P 500 up +0.64% to 1,098.87. Technically, resistance for the S&P 500 now are the psychological level 1,100 mark, the 200d-MA at 1,115.54 and the June high at 1131.23. Supports now are the 50d-MA at 1082.73, the 20d-MA at 1075.95, and 1050-1060 range. Watch these levels carefully and execute your trades accordingly.
Best regards to all, and good luck in your trading.
Disclosure: No positions in stocks mentioned at this moment.