April 2010

Asia/Pacific Shares Extend Rally as China’s 1Q GDP Tops Forecast

Asia Session Key Developments

• Australian Stock Index Closes Above 5,000
• China’s GDP Grows At Fastest in Almost Three Years
• Japan’s Industrial Production Falls for the First Time Since February 2009
• Australian Consumer Inflation Expectations Rises Most Since October 2008
• China Likely to Impose a Property Tax in Order to Prevent Price Bubble

Asia/Pacific shares pushed higher on Thursday amid the slew of positive data throughout the region, leading the ASX 200 to close above the 5,000 level for the first time since September 2008. In Japan, the central bank raised its economic assessment in seven of the nine regions as the export-led recovery gathers momentum, and policy makers said all local economies “had picked up, although there remained differences in the pace and the extent of the recovery.” Overnight, China’s GDP highlighted the economic docket as the growth rate accelerated to the fastest pace in almost three years during the first quarter. Growth jumped 11.9% from 10.7% in February amid forecasts of an 11.7% expansion, while retail sales advanced18.0% during the same period, which was largely in-line with expectations. The data adds some worrying signs that the economy may be overheating on the back of a boiling housing market, and the central bank may take additional steps to temper the expansion as policy makers aim to balance the risks for growth and inflation. In Japan, investors were net buyers of foreign bond during the week of April 9^th, consumer inflation expectation in Australia rose the most since October 2008.

Nikkei 225                          11,273.79

Stocks in Japan rallied for a second successive day, leading the Nikkei 225 to advance 68.89 points (0.61%) and close at 11,273.79 as all ten components pushed higher on the day. Shares of TDK jumped 2.88% as Mizuho Securities raised its target price on the stock from 7,000 to 7,400, while Hino Motors soared 5.17% as the Nikkei Quick News said the firm would post a 1.0B yen operating profit for the fiscal year ending in March. In addition, JTEKT added 1.15% as Goldman Sachs Group set the company’s target price to 1,200 yen, while CSK Holdings advanced 3.65% as Iwai Securities offered a 17B yen bid for the firm’s Cosmo Securities unit.

Hang Seng                        22,157.82

The Hong Kong equity market advanced for a second straight day, leading the benchmark equity index to soar 36.39 points (0.16%) and close at 22,157.82. Five out of the nine components rose on the day, with oil & gas leading the way, climbing 1.38%, and was followed by a 0.55% gain in basic materials. Shares of CNOOC, China’s largest offshore energy explorer rallied 3.08% as the company, along with Sinochem Group are expected to separately bid as much as $3 billion for a 40% stake in Brazilian oil field, while China Shenhua Energy was unchanged on the day despite announcing that its coal gained 14.2% in the first quarter from a year earlier. Moreover, China Petroleum lost 1.19% on the back of lower commodity prices, while Hang Lung Properties dropped 0.81% as China signaled that it is likely to impose a property tax as part of measures to prevent a price bubble.

S&P/ASX 200 Index           5,001.90

Shares in Australia extended yesterday’s advance, leading the S&P/ASX 200 to climb 7.20 points (0.14%) and close at 5,001.90. Four out of the ten components rallied on the day, with technology leading the way, adding 1.03%, while telecommunications lost 1.59%. Shares of OZ Minerals surged 3.69% after increasing copper production at its Prominent Hill mine in the first quarter, while Coca-Cola Amatil slipped 2.38%after UBS lowered its rating on the stock to “sell” from “neutral.” At the same time, Goodman Group soared 2.14% as the company, along with many other developers have agreed to commit to more than A$15 billion in new projects over the past few months, while Sims Metal Management retreated 1.58% on the back of lower commodity prices.

Notable Asian Session Event Risk / Economic Releases

U.S. Equities Rally For Fifth Day on Retail Sales, Beige Book

U.S. Session Key Developments

•    March Retail Sales Post Biggest Gain in Four Months
•    Fed’s Beige Book Shows Economic Improvement in 11 of 12 Districts
•    Commodities Gain on U.S. Dollar Weakness

U.S. stocks gained for a fifth consecutive day on strong retail sales for March and a positive outlook from the Federal Reserve’s Beige Book.  The broad-based S&P 500 rallied over 1 percent on the session, closing above the 1200 level for the first time since September 2008.  Investors were cheery this morning, following the retail sales report from the Commerce Department.  The report showed that sales grew 1.6 percent in March, the biggest gain in four months, and ahead of 1.2 percent expectations.  Furthering bullish sentiment in the latter half of the trading day was a positive Beige Book release by the Federal Reserve, which revealed that economic conditions had improved in 11 of 12 Fed districts since the last release.  St. Louis was the only district to reveal worsening economic conditions, due to declines in manufacturing and service industries in the district.  Overall, the Fed report was generally upbeat, showing that consumption has increased and businesses are “cautiously optimistic” about future sales.

DJIA 30                     11,123.11                      +103.69                       +0.94%
The Dow Jones Industrial Average rallied today as financial shares added nearly 3 percent.  JPMorgan rose 4 percent on the trading day, the most since October, after reporting record fixed-income trading revenue.  The news also helped boost competitor Bank of America, whose shares rose 3.9 percent on the day.

S&P 500                       1,210.65                         +13.35                       +1.12%
The broad-based S&P 500 posted a strong gain today on rallying financials and commodity shares.  The basic materials and energy sectors rose nearly 1 percent each as crude oil gained 2 percent to nearly $86 a barrel and gold prices returned to the $1160 level intraday.

NASDAQ                     2,504.86                         +38.87                       +1.58%
Shares on the tech-heavy Nasdaq posted the biggest gain among major U.S. indices as technology shares rose 1.7 percent.  Shares of Intel added 3.2 percent after announcing better-than-expected first quarter earnings and a strong outlook going forward.

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com

Asia/Pacific Shares Rally on Growth Optimism, China to Maintain Accommodative Policy

Asia Session Key Developments

• Crude Oil Halts Five Day Decline
• New Zealand Retail Sales Contracts 0.6% in February
• Australian Westpac Consumer Confidence Falls in April

Asian stocks rally on Wednesday for the third time in four days as investors held an improved outlook for future growth, while commodity prices rallied overnight, with crude oil halting its five day decline. Nevertheless, the economic docket in New Zealand showed that retail sales pushed lower for the second time in the past three months, while the region’s nonresident bond holdings surged 63.6% in March. In Australia, Westpac consumer confidence retreated for the third time in the past five months, with the reading dropping 1.0% in April after advancing 0.2% in the previous month. At the same time, China’s State Council said that the government will maintain a proactive fiscal policy, while monetary policy will remain moderately loose as the economy continues to face many difficulties, but went onto say that inflation expectations are strengthening following the rise in global commodity prices.

Nikkei 225                          11,204.90

Stocks in Japan pared yesterday’s decline, leading the Nikkei 225 to rally 43.67 points (0.39%) and close at 11,204.90. Half of the components pushed higher on the day, with technology leading the way, climbing 1.68%, while utilities dropped 1.17% to taper the advance. Shares of Advantest rose 1.40% following Intel raised its outlook for future earnings, while Yamato Holdings, Japan’s largest parcel-delivery service advanced 2.49% after the company said operating profit increased 9% for the year ending March 31^st. In addition, Kobe Steel lost 1.42% as the company stated that it will sell its 35% stake in a joint venture to partner Eagle Industry, while Tokyo Electron rallied 3.62% as the company saw a 20% rise in orders.

Hang Seng                        22,121.43

The Hong Kong equity market rallied on Wednesday, leading the benchmark equity index to climb 17.90 points (0.08%) and close at 22,121.43. Three out of the nine components advanced overnight, with telecommunications adding 0.66%, which was followed by a 0.62% rise in basic materials. Shares of China Construction Bank, the second-largest lender by assets, pushed 0.88% higher as the bank announced that it will accelerate overseas expansion this year to keep pace with increasing outbound investment by mainland Chinese companies, while Hutchison Whampoa added 0.09% as the pharmaceutical company stated that its organic food venture will price products at about 30% lower than rivals. Moreover, CLP Holdings, Hong Kong’s largest electricity producer rose  0.43% as the company agreed to sell a stake in a mainland power plant to China Guodian, while Ping An Insurance Group gained 0.07% as the insurance group said that its unaudited insurance premium income soared at an annualize pace of 38%.

S&P/ASX 200 Index           4,994.70

Shares in Australia pared yesterday’s decline, leading the S&P/ASX 200 to rally 43.10 points (0.87%) and close at 4,994.70. Seven out of the ten components pushed higher on the day, with health care adding 1.80% to lead the advance, while technology retreated 1.83%. Shares of News Corp gained 2.48% as the head of digital operations said MySpace could launch a music subscription feature later this, while Fortescue Metals rose 2.50% as UBS raised its rating on the firm to “buy” from “neutral.” At the same time, Telstra, Australia’s largest phone company tipped 0.31% lower as the company said a market rumor that it completed talks to sell its fixed line assets to the government is “unfounded,” while  Equinox Minerals slipped 1.93% as UBS cut its rating on the stock to “neutral” from “buy.”

Notable Asian Session Event Risk / Economic Releases

U.S. Equities Rebound From Early Losses, Dow Closes Above 11,000 For Second Day

U.S. Session Key Developments

•    Trade Deficit Widens More Than Anticipated on Import Demand Growth
•    Crude Oil Dips on Weakness in Foreign Equity Markets, Metals Fall
•    U.S. Dollar Index Declines to Lowest Level Since March 18

U.S. stocks rebounded from an early decline to push the Dow Jones Industrial Average above 11,000 for a second consecutive day.  Domestic stocks managed to make new highs despite weakness in foreign equity markets and commodities.  Japanese shares were especially weak overnight, as the Nikkei 225 dropped 90 points to 11161, while Australia’s S&P/ASX 200 Index shed 32 points to 4951.  European equities did not perform much better in their session, as the Dow Jones Stoxx 600 Index fell for a second consecutive day.  On the commodities front, crude oil dipped just under 1 percent to $83.77 a barrel, while gold and silver each fell 0.9 percent to $1151.50 and $18.24, respectively.  As for U.S. equities, the Dow dropped to 10,948 during the first hour of trading following  a worse-than-expected NFIB Small Business Optimism report.  The report showed that confidence among U.S. small businesses fell in March to the lowest level since July 2009 as executives became more concerned about earnings and sales.  Despite the weak report, U.S. equities were able to rebound in the latter half of the trading day on an improved earnings outlook and strong IBD/TIPP Economic Optimism report for April.  The Dow ended the session at 11,019, its highest close since September 2008.

DJIA 30                     11,019.42                      +13.45                       +0.12%
The Dow Jones Industrial Average gained for a second consecutive day, led by a 2.5 percent gain for Home Depot.  Shares of the home improvement retailer closed at 34.62, a 52-week high, on news that the company is ready to begin hiring again for the first time in four years.  Also hitting 52-week highs on the index were General Electric and American Express, which rose 1.2 percent and 1.0 percent, respectively.  On the negative side, shares of Alcoa dipped 1.5 percent after the aluminum giant announced its first-quarter earnings after trading closed on Monday.  Alcoa posted a $201 million loss, or 20 cents per share, while revenue totaled a less-than-expected $4.9 billion.

S&P 500                       1,197.30                           +0.82                       +0.07%
The broad-based S&P 500 posted a slight gain as the consumer services sector rose 0.4 percent.  Chain-store sales data released from the International Council of Shopping Centers and Goldman Sachs helped boost retailers, including NewsCorp and Lowe’s which gained over 2 percent each.  According to the data, chain-store sales for the week ended April 10 increased 4 percent from the year-earlier period.  Overall, the S&P index has increased 13 percent since February 8 and based on its relative strength index, the index nearly has the most momentum since 1986.  The S&P’s 14-day RSI has exceeded 65 every day since March 5, the longest stretch since 1995.

NASDAQ                     2,465.99                         +8.12                       +0.33%
Shares on the tech-heavy Nasdaq posted the biggest gain among major U.S. indices as technology shares rose 0.4 percent ahead of Intel’s earnings.  Yahoo! shares posted the best performance among the ten largest Nasdaq tech stocks, rising 3 percent, while Research in Motion gained 2.8 percent.  Google shares also had a strong day, rising 2.4 percent as analysts at Kaufman Bros. reiterated a ‘buy’ rating on the stock with a price target of $740.

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com

Asia/Pacific Shares Weaken on Concerns for Future Earnings, Falling Commodity Prices

Asia Session Key Developments

• Copper Fall From 20-Month High
• New Zealand Card Spending Rises the Most in Two Years
• Australian Business Confidence Nears Eight Year High
• Shirakawa Says Concern on Double-Dip Recession Dissipated

Asian stocks pushed lower on Tuesday, falling for the first time in three days as Alcoa posted first-quarter results that failed to meet market expectations, while the rally in the Japanese yen led investors to engage in profit taking. Nevertheless, the economic docket in Australia showed business confidence rose to 13 in March from 8 the previous month, nearing an eight year high, while New Zealand’s card spending accelerated 2.1% during the same period, rising the most in two years. In Japan, the price of domestic corporation goods rose 0.2% in March to mark the fifth successive month rise, while Tokyo condominium sales soared at an annualized pace of 54.2% in the same period. Nevertheless, Bank of Japan Governor Masaaki Shirakawa stated that the central bank is seeing brighter signs for prices and went onto add that concern for a double-dip recession are dissipating.

Nikkei 225                          11,161.23

Stocks in Japan pared yesterday’s advance, leading the Nikkei 225 to shed 90.67points (0.81%) and close at 11,161.23. Nine out of the ten components fell on the day, with basic materials leading the way, retreated 1.24%, and was followed by a 1.14% decrease in consumer services. Shares of GS Yuasa jumped 4.80% as the government expects hybrid and electric vehicles to account for as much as 50% of auto sales by 2020, while Pac Metals dropped 1.85% on the back of lower commodity prices. In addition, NTN slumped 3.36% as its stock rating was cut from “neutral” to “sell” by Goldman Sachs Group, while JFE Holdings retreated 2.91% as JP Morgan slashed the company’s stock rating from “overweight” to “neutral.”

Hang Seng                        22,103.53

The Hong Kong equity market extended yesterday’s decline, leading the benchmark equity index to tumble 34.64 points (0.16%) and close at 22,103.53. Four out of the nine components pushed lower on the day, with basic materials leading the way, falling 2.50%, while consumer goods rallied 1.03% to taper the decline. Shares of Bank of China Hong Kong rose 0.53% as the unit announced that it is proceeding with the issue of $900 million of 5.55% subordinated notes due 2020, while Industrial & Commercial Bank of China dived 1.28% after publicizing that China’s four largest publicly traded banks needed 480 billion yuan of capital to comply with regulatory requirement for financial strength. Meanwhile, Petro China sank 1.57% on the back of lower energy prices, while China Mobile added 1.08% as Reuters expects sales of 3G mobile phones using China’s self-developed TD-SCDMA will grow 7-fold this year.

S&P/ASX 200 Index           4,951.60

Shares in Australia pared yesterday’s rally, leading the S&P/ASX 200 to tumble 32.70 points (0.66%) and close at 4,951.60. Seven out of the ten components pushed lower on the day, with basic materials leading the way, falling 1.73%, while telecommunications added 2.37% to taper the decline. Shares of OneSteel plunged 3.66% as the company reported that there was a localized failure of an expansion joint at its Whyalla blast furnace on Sunday, while Oil Search dropped 2.49% on the back of lower commodity prices. At the same time, BHP Billiton lost 1.37% amid investors engaging in profit-taking as copper prices traded at a 20-month high, while Alumina dived 5.59% after its venture partner, Alcoa, reported lower-than-expected revenues for the first-quarter.

Notable Asian Session Event Risk / Economic Releases

Asia/Pacific Shares Strengthen Amid Greece Prospects, Hang Seng Bucks Trend

Asia Session Key Developments

• Copper Advances for a Second Straight Day
• New Zealand Home Prices Fall for the First Time in 10 Months
• Japan’s Bank Lending Extends Three Month Decline

Stocks in Asia/Pacific began the week on a brighter note as European policy makers announced a bailout plan for Greece, while the Hang Seng bucked the trend as regulators took additional steps to temper the rise in lending. Nevertheless, the Bank of Japan minutes showed board member Miyako Noda said that more lending could undermine the central bank’s policy, while other members stated the exact opposite, publicizing that more lending can help the economy as the BoJ aims to encourage a sustainable recovery. Meanwhile, the economic docket in Australia showed that home-loan approvals in February retreated for the fifth straight month following Governor Stevens’ decision to boost the country’s benchmark interest rate twenty five basis points to 4.25%. Meanwhile, New Zealand home prices in March fell for the first time in 10 months as tight credit conditions paired with high unemployment discourage home buyers, while Japan’s bank lending extended its three month decline in March.

Nikkei 225                          11,251.90

Stocks in Japan extended Friday’s advance, leading the Nikkei 225 to advance 47.56 points (0.42%) and close at 11,251.90. Eight out of the ten components pushed higher on the day, with financials leading the way, rallying 1.59%, while telecommunications slipped 0.93%. Shares of Seven & I Holdings dropped 1.55% as bank lending narrowed 1.8%, while Itochu leapt 4.37% as Morgan Stanley raised its 12-month share price estimate for the firm to 1,050 yen from 900 yen. In addition, JX Holdings increased 2.69% as Citigroup Global Markets rated the company a “buy” in new coverage, while Takashimaya rallied 3.90% as the department store publicized that it expects a 3.8% rise in net income for the current fiscal year.

Hang Seng                        22,138.17

The Hong Kong equity market pared Friday’s advance, leading the benchmark equity index to shed 70.33 points (0.32%) close at 22,138.17. Four out of the nine components pushed lower on the day, led by a 2.01% decline in consumer goods, which was followed by a 0.94% drop in telecommunications. Shares of China Construction Bank slipped 1.60% as the company announced that it sold HK$100 million of certificates of deposit due 2013, while BoC Hong Kong Holdings tipped 0.85% higher as Fitch assigned “A-“ rating to the banks’ lower tier 2 sub notes. At the same time, China Overseas Land & Investment slumped 3.70% as China Banking Regulatory Commission chairman Liu Mingkang said regulators will inspect banks’ balance sheet in the third quarter, while Cathay Pacific Airways added 0.48% amid Bofa-Merrill Lynch advising investors to “stay bullish” on China’s three largest airlines.

S&P/ASX 200 Index           4,984.30

Shares in Australia extended Friday’s advance, leading the S&P/ASX 200 to rally 36.20 points (0.73%) and close at 4,984.30. Nine out of the ten components pushed higher on the day, with basic materials leading the way, climbing 1.22%, while consumer goods retreated 0.14% to taper the advance. Shares of Sigma Pharmaceutical surged 10.64% on speculation Archer Capital and Ironbridge Capital will make a bid for the firm, while OneSteel gained 3.02% on the back of higher metal prices. At the same time, Dexus Property Group added 1.20% as the finance unit announced that it will buy back at least A$100 million of bonds due February 2011, while Qantas Airways rallied 3.14% as Chief Executive Officer Alan Joyce held an improved outlook for future growth.

Notable Asian Session Event Risk / Economic Releases

U.S. Stocks Close Sixth Straight Week in the Black

U.S. Session Key Developments

•    European Leaders Reportedly Finalize Support Plan for Greece
•    Greek Debt Rating Cut to Lowest Level of Investment Grade by Fitch
•    Wholesale Inventories Increase in February

U.S. Equities rallied in today’s trade, sending the Dow Jones Industrial Average briefly above 11,000 for the first time since September 2008.  Stocks got a boost from a report that EU leaders have finalized a “support plan” for Greece that they are ready to put in place.  While a bailout eases short-term concerns about the euro region, it would put added stress on the countries providing the support, many of which face their own budget problems.  The news of the plan came just minutes after Fitch Ratings downgraded Greece’s debt rating to BBB- and maintained a negative outlook, which means more cuts are still likely.  BBB- is just one level above junk.  Nonetheless, the euro rallied against the dollar today, rising 1.0 percent to 1.3500.  The dollar was down 0.8 percent overall.  Despite the dollar’s weakness, commodities failed to build any real momentum.  The CRB Commodity Index gained only 0.3 percent although June Natural Gas Futures gained 4.1 percent.  Meanwhile, the lone economic release in the U.S. showed that wholesale inventories and sales rose in February, a sign that retailers are ramping up orders.

DJIA 30                     10,997.35                      +70.28                       +0.64%
The Dow Jones Industrial Average closed the week just below 11,000, after briefly crossing the level in late trade.  The blue chip index was paced higher by Chevron, which gained 2.4 percent and added almost 14 index points.  The company reported that its oil refineries returned to profitability in the first quarter of 2010.

S&P 500                       1,194.37                           +7.93                       +0.67%
The Standard & Poor’s 500 index closed the week up 1.4 percent, its sixth straight week in the black, a feat it hasn’t accomplished in a year.  In today’s session all ten sectors moved higher as 4 out of 5 issues advanced overall.  Energy stocks paced the group as Natural Gas futures for June delivery gained 4.1 percent.  The group gained 1.1 percent.

NASDAQ                     2,454.05                         +17.24                     +0.71%
The tech-heavy Nasdaq Composite had the best week of the three major indices as it gained 2.1 percent over the past 5 days.  That momentum carried into today as tech stocks gained 0.9 percent as a group.  Microsoft and Cisco both gained over 1.2 percent to push the index higher.  Palm was among the best performers as rumors spread that HTC is in talks to acquire the company.  Palm shares rose 10.8 percent.

Written by Gary Chalik, CFDTrading Research
Please send any comments about this report to GChalik@fxcm.com

Asia/Pacific End the Week Higher as Businesses Raise Prospects For Future Profits

Asia Session Key Developments

• Australian Foreign Reserves Narrows for the Second Straight Month
• Japan’s Machine Orders Falls for the Second Month in February
• China Plans to Impose Property Tax to Cool Property Market

Asian stocks pushed to the upside on Friday as firms throughout the region raised their outlook for future profits, spurring an improved outlook for global growth. Meanwhile, the economic docket in Australia showed that the region’s building industry contracted in March for the first time in the past three months, with the AiG index slipping to 8.7 from 52.8 in the previous month. In China, the business climate index rose to 132.9 in the first quarter from 130.6 from the previous period to mark the highest level since June 2008, while the region’s entrepreneur confidence jumped to 135.5 from 127.7 during the three months through September.

Nikkei 225                          11,204.34

Stocks in Japan pared yesterday’s decline, leading the Nikkei 225 to climb 36.14 points (0.32%) and close at 11,204.34. Half of the components pushed higher on the day, with consumer services leading the way, adding 2.52%, while oil & gas sheds 1.15% to taper the advance. Shares of Canon, the world’s largest camera maker tumbled 2.75% as Goldman Sachs Group slashed the company’s stock rating from “buy” to “neutral,” while UNY rallied 3.62% as the company expects net income for the current fiscal year to reach 2.5 billion yen. In addition, Seven & I Holdings jumped 6.14% after forecasting higher earnings amid signs that consumer spending is recovering, while Yokohama Rubber, Japan’s third-largest tire maker dropped 3.42% as Merrill Lynch rated the company “underperform” in new coverage.

Hang Seng                        22,208.50

The Hong Kong equity market halted yesterday’s decline, leading the benchmark equity index to climb 341.46 points (1.56%) and close at 22,208.50 as all nine components pushed higher on the day. Shares of CNOOC jumped 2.20% on the back of higher commodity prices, while China Unicom gained 3.55% as the Shanghai Securities News said China will expand funds for 3G services to 400B Yuan by 2011. Moreover, China Resources Power Holdings slipped 1.43% as the company intends to invest a total of US1.5 billion in the renewable resource industry, while China Resources Land lost 2.06% as China plans the impose a property tax as a means to cool the expansion in the property market.

S&P/ASX 200 Index           4,937.90

Shares in Australia pared yesterday’s decline, leading the S&P/ASX 200 to rally 10.20 points (0.21%) and close at 4,948.10. Seven out of the ten components advanced on the day, with oil & gas leading the way, increasing 1.09%, and was followed by a 0.58% rise in consumer goods. Shares of BlueScope Steel plunged 2.36% as Cheung Kong Infrastructure Holdings filed a suit following the failed bid for the firm’s iron-sands mine in New Zealand from, while Macarthur Coal leapt 8.29% amid the company rejecting a A$3.71 billion takeover offer from New Hope. At the same time, Woodside Petroleum edged 0.76% on the back of higher commodity prices, while Ramsay Health Care retreated 0.98% as Deutsche Bank cut the company’s stock rating from “buy” to “hold.”

Notable Asian Session Event Risk / Economic Releases

U.S. Equities Pare Early Losses, Commodities Fall

U.S. Session Key Developments

•    Initial Jobless Claims Data Worse Than Expected, Highest in Five Weeks
•    March Chain Store Sales Rise 9 Percent From One Year Ago
•    Crude Oil Falls For a Second Day, Precious Metals Pullback

U.S. stocks rebounded from early losses and a weak jobs report to close higher for the third time this week.  The S&P 500 closed at 1,186, just 3 points below Tuesday’s 18-month high.  Initially, the index declined to 1,175 following weakness in foreign equity markets and a worse-than-expected U.S. jobless claims release.  The employment data showed that 460,000 Americans filed claims for jobless benefits last week, the highest level in five weeks.  Economists had forecast that claims would fall to 435,000, after dropping to 439,000 in the week prior.  Although the bearish news initially dampened trading, stocks posted a strong rebound through the latter half of the day, aided by a 9 percent rise in March chain store sales from a year earlier.  This was the largest sales gain since 1999 and gave investors hope that American consumers may be making a comeback.

The equities rally failed to boost commodities, which fell on weak equities performance abroad and concern that Greece’s debt problems may cause a slowdown in the global economy.  Crude oil fell nearly half of 1 percent to $85.39, while gold futures dipped to $1152 per ounce.  The U.S. Dollar, on the other hand, rallied for a third consecutive day as risk averse investors sought safer investments.  The U.S. Dollar Index rose to 81.49, its highest close since March 26.

DJIA 30                     10,927.07                      +29.55                       +0.27%
The Dow Jones Industrial Average gained for the first time since Monday, closing about 50 points shy of its yearly high.  Twenty of the 30 Dow stocks rose on the session, led by a 3 percent gain for American Express.  The credit-card company benefited from the strong sales data and news that MBNA is launching a new credit card in conjunction with American Airlines and American Express.  The strong sales data also helped to boost McDonald’s, AT&T, and Home Depot, as each company’s shares rallied over 1 percent.

S&P 500                       1,186.44                           +3.99                       +0.34%
The broad-based S&P 500 posted the biggest gain among major U.S. indices as telecommunications and financial shares rallied 0.8 percent each.  Helping boost the telecom sector was a 3 percent gain for Sprint Nextel, after the firm launched the world’s first 3G/4G enabled Android headset in the U.S.  MetroPCS shares also added 3 percent, following the company’s launch of a fully automated voice mail-to-text service.

NASDAQ                     2,436.81                         +5.65                       +0.23%
Shares on the tech-heavy Nasdaq gained back yesterday’s losses as technology stocks rose 0.1 percent.  Yahoo! shares were especially strong, gaining 2.7 percent on the day, while Microsoft added 1.9 percent.

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com

Asia/Pacific Shares Fall on the Back of Mixed Economic Development, Growth Fears

Asia Session Key Developments

• Australian Unemployment Rate Remains Unchanged in March
• Japan’s Machine Orders Falls for the Second Month in February

Asian stocks pushed lower on Thursday for the first time in six days as the economic docket spurred a weakened outlook for global growth. Japan’s adjusted current account surplus narrowed more than expected in February, while the trade surplus advanced to JPY 778.0B during the same period from JPY 197.2B in the previous month. At the same time, machine orders unexpectedly pushed lower for the second straight month, with demands slipping 5.4% after contracting 3.7% in January, while the Eco Watchers survey increased to 47.0 in March to top expectations for a rise to 46.7. In Australia, employers added 19.6K workers in Marcg, which was just shy of expectations for a 20.0K rise, while the jobless rate held steady at 5.3% for the second month.

Nikkei 225                          11,168.20

Stocks in Japan pared yesterday’s advance, leading the Nikkei 225 to shed 124.63 points (1.10%) and close at 11,168.20. Nine out of the ten components pushed lower on the day, with consumer goods leading the way, falling 1.58%, which was followed by a 1.48% decline in industrials. Shares of Toyota Motors dropped 1.83% as news surfaces that former vice president Irv Miller urged the Japanese automaker to “come clean” in January about mechanical failures in accelerator pedals for some vehicles, while Fast Retailing, Japan’s largest clothing retailer added 0.67% as the company raised its full-year profit forecast by 5.2%. In addition, Mazda Motor plunged 4.35% subsequent to Citigroup Global Markets slashing the company’s stock rating from “buy” to “hold,” while Nippon Steel lost 1.09% on the back of falling commodity prices.

Hang Seng                        21,867.04

The Hong Kong equity market pushed lower on the day, leading the benchmark equity index to slip 61.73 points (0.28%) and close at 21,867.04. Four out of the nine components pushed lower on the day, with oil & gas leading way, falling 1.60%, while telecommunications rose 1.71%. Shares of PetroChina, China’s leading oil and gas producer edged 0.85% lower as the company started construction of a 1-million cubic meter crude oil storage in China’s northern industrial hub Tianjin, while Hang Lung Properties slumped 3.2% after the Shanghai Securities News said policy makers may enforce a property tax to temper the rise in property values. Moreover, CNOOC shed 2.16% on the back of lower commodity prices, while China Mobile advanced 1.8% after the Economic Daily News said the firm will purchase communication products from companies within Taiwan.

S&P/ASX 200 Index           4,937.90

Shares in Australia pared yesterday’s rally, leading the S&P/ASX 200 to shed 23.00 points (0.46%) and close at 4,937.90. Seven out of the ten components weakened on the day, with basic materials leading the decline, dropping 1.06%, while telecommunications advanced 1.34% to taper the decline. Shares of Westpac Banking, Australia’s second-largest bank retreated 1.07% as the bank sold A$1.75 billion of bonds due in April 2013, while Mirvac Group dived 3.72% as the firm concluded an institutional share sale worth A$350 million. At the same time, Sims Metal Management lost 0.57% on the back of lower commodity prices, while Woolworths rose 1.05% as the company confirmed it will dismantle a $300 million exclusive deal with Telstra.

Notable Asian Session Event Risk / Economic Releases

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