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US market looks to key jobs data on Friday | | | | From: NetResearch Asia [mailto:postman@netresearch-asia.com] Sent: Thursday, July 04, 2013 10:06 AM To: NetResearch Asia 4 Jul 2013 Subject: US market looks to key jobs data on Friday Pre-Market Open Commentary for 04 July 2013 ( CO. REG. NO. 199904258C ) DJIA: 14988.55 +56.14 Nasdaq Composite: 3443.67 +10.27 Good morning, fellow investors US stocks reversed earlier losses to close modestly higher on Wednesday as market looked ahead to key employment data due on Friday and brushed off ongoing turmoil in Egypt, political uncertainty in Portugal and slowing growth in China. The US economic data released were mixed, offering little market direction. However, market remained cautiously optimistic on the jobs market following a series of employment data signaling a continuous, albeit slow, recovery in the job market. An ADP report showed that private companies added more new jobs in June than expected, hiring 188,000 new workers while the Challenger report showed that the number of job cuts in 1H2013 improved over 1H2012. Initial claims for unemployment remained relatively stable, falling 5,000 to 343,000 last week, which was below expectations of 350,000 claims and the four-week moving average declined to 345,500, a drop of 750 from the previous week. On a weaker note, US trade deficit widened in May to US$45.03 bil from US $40.15 bil in April, signaling potential downgrades to 2Q2013 GDP estimates. Additionally, the Institute for Supply Management (ISM) index for services sector fell to 52.2 in June, the weakest level since Feb 2010, from 53.7 in May as a slowdown in new orders offered little optimism for growth. The reading was also below expectations of a gain to 54. On a brighter note, the services sector provided more employment, reaffirming signs of a recovery in the jobs market. Although market focused on the US employment data, the threat of a political turmoil in Portugal sparking another euro zone debt crisis is an area of concern. On Wednesday, Portugal's 10-year government bond yields hit 8% and the country's benchmark stock index shed more than 6% after both Portuguese foreign and finance ministers resigned in protest against the lack of support for austerity measures. However, the prime minister held firm to his role to batter and restore the country’s financial health. The three major US indices rose modestly with the Dow Jones Industrial Average rising 0.38% while the S&P 500 edged modestly higher by 0.08% to close at 1615.41. The Nasdaq rose 0.30%. The US market is closed on Thursday for Independence Day public holiday. Crude oil for August delivery soared to a 14-month high, gaining US$1.64 a barrel, or 1.65%, to settle at US$101.24 a barrel following a decline in crude stockpiles, and on concerns that unrest in Egypt could disrupt oil supplies. In Singapore today: Singapore shares tumbled on Wednesday following a weak overnight close on Wall Street and as dismal data from China’s services sector, which accounted for close to half of China’s economy in 2012, revived fears of an economic slowdown in the world's second-largest economy. Growth in China's purchasing managers’ index (PMI) for the services sector declined to 53.9 in June led by a seasonal fall in the construction industry; the June reading was the weakest level in nine months, and declined from 54.3 in May. At closing, the benchmark STI index shed 43.83 points, or 1.38%, to close at 3129.49. For every stock that rose, 2.9 fell. Turnover was 2.0 bil shares with a value of $1.2 bil traded. According to Singapore Institute of Purchasing & Materials Management, Singapore’s manufacturing sector bucked the regional trend of weakening factory activity in June as the PMI rose to 51.7 a two-year high, from 51.1 in May. However, there are signs of a potential pullback in manufacturing activity in 3Q2013 as new domestic and export order have slipped. In June, the PMI signaled that manufacturing activities in China, South Korea and Taiwan are all in contraction. Expect market to rebound today from previous day’s sharp losses and following cautious optimism displayed on Wall Street. However, gains are likely to be modest on caution ahead of key jobs data in the US on Friday while rising political tension and uncertainty in Egypt and the euro zone are also expected to weigh on risk appetite. 1. Chartzones – 4 July 2013 (premium) Consumer, Telecoms, Banks and Transport Stocks [read the report] 2. Chartzones – 3 July 2013 (free) Technology Stocks [read the report] 3. Chartzones – 2 July 2013 (free) Media, China Stocks and Technology Stocks [read the report] 4. Property Sector Note (premium) MAS introduces new Debt Servicing Ratio framework [read the report] 5. Singapore Banks (premium) New Debt Servicing Framework [read the report] 6. Kevin's blog: Armstrong calls for trading halt amid possible delisting discussions........this is my sixth stock pick that is facing a possible delisting (free) [read the report] | |
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