September 26, 2012 Financial Market Summary

At 0500 BST today, FTSE 100 futures are trading 5.5 points higher.

At 0500 BST today, German DAX Xetra 30 futures are trading 16.4 points up, while French CAC-40 futures are trading 8.0 points higher.

At 0500 BST today, DJIA futures are trading 18.0 points up.

Nikkei 225 is trading 1.7% lower, at 8,935.7.

In Asia, crude oil for November delivery is trading 0.2% or $0.15 lower at $91.22 per barrel.

At 0400 BST today, the GBP is trading marginally lower against the USD at $1.6190, slightly lower against the EUR at €1.2549, and marginally higher against the JPY at ¥125.90.

US Market Snapshot

At 0500 BST today, DJIA futures are trading 18.0 points up.

Yesterday, DJIA shed 0.8% to end at 13,457.5. NASDAQ slipped 1.4% to settle at 3,117.7. S&P 500 slumped 1.1% to close at 1,441.6.

US stocks accelerated losses yesterday, as worries over global economic growth coupled with Spain’s funding problem overshadowed upbeat reports on the US housing market and consumer confidence. A Fed official criticized the central bank’s recent stimulus efforts, further weighing on investor sentiment.

Caterpillar fell 4.3%, as it slashed its long-term profit forecasts, amid concerns over capital expenditure by large commodity producers. Peer, Joy Global lost 5.5%, weighed down by Caterpillar’s profit warning.

Advanced Micro Devices slipped 5.2%, after FBR Capital Markets cut its price target on the stock. Tesla Motors and Forward Air tumbled 9.8% and 11.4%, respectively, as they lowered their third-quarter guidance.

Red Hat dropped 4.3%, as its second- quarter profit trailed market expectations. Apple lost 2.5%, as it sold out its initial inventories of the latest smart-phone, raising concern about keeping up with the demand.

After the closing bell, Yahoo edged up 0.2%, as it named Ken Goldman as its CFO, effective from 22 October.

Asian Market Snapshot

Asian stock markets are trading lower this morning, tracking Wall Street overnight and as a raft of Japanese stocks traded ex-dividend.

In Japan, Toyota and Nissan Motor logged losses, as both the stocks traded ex-dividend and amid reports that both would slash production in China.

In Hong Kong, BYD tumbled as CLSA Asia Pacific Markets slashed its price target on the stock, citing worsening outlook for its products. Hong Kong-listed Glencore International lost values, as it revised its offer to boost its stake in Kazakhstan's biggest zinc producer, Kazzinc.

In South Korea, POSCO and Hyundai Steel recorded losses, amid mounting concerns over sluggish global growth.

Nikkei 225 is trading 1.7% lower, at 8,935.7. Hang Seng index is trading 0.9% down, at 20,521.7, while the Kospi index is trading 0.6% lower, at 1,980.3.

UK Market Snapshot

At 0500 BST today, FTSE 100 futures are trading 5.5 points higher.

AAR,  a consortium formed by BP’s Russian billionaire partners in TNK-BP are preparing an all-cash offer for the company’s 50% holding in the Russian oil venture.

Schroders’ more than 50-year-old auditing relationship with PwC is at risk after the company put its contract out to tender.

European Market Snapshot

At 0500 BST today, German DAX Xetra 30 futures are trading 16.4 points up, while French CAC-40 futures are trading 8.0 points higher.

According to “Handelsblatt”, ThyssenKrupp might have to offer incentives to possible buyers of its loss-making steel mills in Brazil and the US. Chief Executive Heinrich Hiesinger mulls to sell the mills separately for at least the book value of €7.0 billion.

S&P has assigned a rating of ‘BB-’ to CGGVeritas with negative outlook, a day after the group acquired the seismic data division of Dutch engineering company Fugro.

Commodities

In Asia, crude oil for November delivery is trading 0.2% or $0.15 lower at $91.22 per barrel.

Yesterday, crude oil for November delivery dropped 0.6% or $0.56 to $91.37 per barrel, after the Federal Reserve Bank of Philadelphia President Charles Plosser criticized the Federal Reserve’s decision to launch QE3, and stated that the central bank might have to raise short term interest rates "well before" the current forecast of mid-2015.

However, earlier in the session, crude was trading higher, on the back of ongoing geopolitical tensions in the Middle East, and after the release of better-than-expected housing and consumer confidence data from the US. Later in the day, the American Petroleum Institute (API) reported that US crude inventories had risen by 335,000 barrels to 361.8 million barrels  in the week ended September 21, marking the highest level since the week ended 24 August.

Gold for immediate delivery is trading 0.2% higher today, at $1,764.55 per ounce.

Gold for December delivery settled up 0.1% or $1.80 at $1,766.40 per ounce yesterday, supported by a positive US housing and consumer confidence data. Gold futures were also boosted on a report from the IMF that indicated global central banks have been adding to their gold reserves. However, gains were capped as negative comments from the Philadelphia Fed president helped the dollar trim some of its earlier losses weighing on the yellow metal.

Yesterday, copper 3-month futures rose 0.9% or $72.0, to close at $8,240.00 /MT. Aluminium 3-month futures dropped 0.3% or $5.0, to close at $1,975.00 /MT.

Currencies

At 0400 BST today, the GBP is trading marginally lower against the USD at $1.6190, slightly lower against the EUR at €1.2549, and marginally higher against the JPY at ¥125.90. Markets await CBI sales data in UK later in the day.

The EUR is trading slightly higher against the USD at $1.2901.

The EUR is trading 0.1% higher against the JPY at ¥100.35. Earlier, the EUR was trading lower against the JPY before reports speculated to show a drop in Italian retail sales and European consumer confidence. The EUR also dropped on speculation that the political clash in Spain might impede attempts to resolve the region’s debt crisis.

The NZD is trading lower against the USD after New Zealand posted a higher-than-expected trade deficit in the 12 months through August.

The AUD is trading lower against the JPY after Catalonia president, Artur Mas, called for early elections as Spanish Prime Minister Mariano Rajoy struggles to gain acceptance for austerity measures, sapping demand for riskier assets.

Yesterday, the USD closed higher against the EUR as comments from a US Fed official that the central bank actions won’t boost economic growth overshadowed better-than-expected data on US home prices and consumer confidence.

The GBP gained against the EUR after a report showed that mortgage approvals in the UK rose unexpectedly in August, adding to signs the nation’s economy is improving.

The EUR closed lower against the JPY as Spain’s borrowing costs rose at a bill auction adding to signs the eurozone debt crisis is worsening.

Macroeconomic Snapshot

UK mortgage approvals rose unexpectedly to 30,533 in August, from 28,750 in July.

GfK forward-looking consumer sentiment index for Germany came in at 5.9 in October, unchanged from September.

French business confidence index remained at 90 in September, unchanged from August.

The Conference Board indicated that its consumer confidence index for the US jumped to 70.3 in September from a revised 61.3 in August.

The S&P/Case-Shiller 20-City composite home price index for the US rose by a seasonally adjusted 0.4% on a monthly basis in July compared to a 0.9% increase in the previous month.

According to Federal Housing Finance Agency, on a monthly basis, US house prices rose 0.2% in July, compared to a downwardly revised 0.6% increase in the previous month.