{"id":61123,"date":"2013-01-16T08:29:18","date_gmt":"2013-01-15T21:29:18","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2013\/01\/16\/the-overnight-report-doing-the-limbo\/"},"modified":"2013-01-16T08:29:18","modified_gmt":"2013-01-15T21:29:18","slug":"the-overnight-report-doing-the-limbo","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2013\/01\/16\/the-overnight-report-doing-the-limbo\/","title":{"rendered":"The Overnight Report: Doing The Limbo"},"content":{"rendered":"

\n\tBy Rudi Filapek-Vandyck<\/span>, Editor FNArena<\/p>\n

\n\tA late rally pushed the S&P500<\/span> 1.66 point into the positive to close at 1472.34. The Dow Industrials pushed 27.57 into the positive (0.20%) to close at 13534.89, but the Nasdaq<\/span> continues to be weighed down by struggling Apple shares. Nasdaq<\/span> lost 0.22% to close at 3110.78.<\/span><\/p>\n

\n\tOn Friday, US time, cycling's most infamous drug cheat Lance Armstrong will appear on Oprah Winfrey's talk show and it's going to be a genuine show stopper. Get prepared for future references to "what were you doing when Armstrong confessed on Opra<\/span>h?"<\/p>\n

\n\tOf course, it's all part of a carefully orchestrated PR-redemption plan, but it'll stop the world from turning, if only for an hour or so.<\/p>\n

\n\tIn Australia on the very same day (Saturday in Melbourne), tennis legend Roger Federer<\/span> and upcoming young Turk Bernard Tomic<\/span> might be on the same court facing each other. Sports enthusiasts have a lot to look forward to this week.<\/p>\n

\n\tNot so for investors. At least not if the first three trading sessions of this week can be taken as a guide.<\/p>\n

\n\tA few weeks ago I walked out of my door and found one of the apartment blocks in my neighbourhood<\/span> was closed off with red tape. In front of the building stood a few policemen gesturing "there's nothing to see here, please move on".<\/p>\n

\n\tThat's how I feel this first week after returning from FNArena's annual break: nothing to see here. According to my information, offices across the Sydney CBD<\/span> are taking bets on whether Armstrong will burst out in tears, or not, on Friday. All that is missing are the policemen in front of the buildings.<\/p>\n

\n\tIn terms of equities, the global kommentariat<\/span> is currently divided in three clearly distinguishable groups: those who see an overbought market ready to plunge; those who see an elevated, complacent market awaiting the next trigger (probably to go down) and those who stay on the bullish course and talk about "necessary consolidation" before equities should aim for higher levels.<\/p>\n

\n\tRegardless of one's view, here's a rather easy observation to put forward: the market is no longer accepting any news as a reason to run higher. Valuations don't look particularly attractive unless earnings start accelerating. This doesn't seem to be the case in the US. I very much doubt whether next month will show any signs of acceleration in Australia. Observation number two is there's ongoing buying support as witnessed by the late recovery in the US overnight and by the fact that Australian equities open higher every day. They probably will do the same today (but no fireworks).<\/p>\n

\n\tLast night the US session saw a very encouraging retail sales estimate for December being released. The data revealed an increase of 0.5%, with core sales (excluding the volatile autos, gasoline and building materials) rising 0.6%. That should have pushed stocks to higher levels if it weren’t for an unexpected negative surprise from the Empire manufacturing survey for the New York region, which showed a negative -7.8, from a positively revised -7.3. Ratings agency Fitch issued a warning that if Obama and Congress don't work out a solution to the US debt ceiling soon, this may lead to a downgrade of the US credit rating later in the year. Add a below expectations producer price outcome (minus 0.2% in December instead of a small rise) and the market genuinely didn't know what to make of it all.<\/span><\/p>\n

\n\tIn Limbo.<\/p>\n

\n\tIn corporate news, Apple shares again traded below US$500 per share (second day in a row), while Dell continues to fare well on the prospect of a buy-out. Lululemon<\/span> Athletica<\/span>, a rather expensive apparel company dedicated to yoga afficionados<\/span>, raised its quarterly revenue forecast, but even then it remained below analysts' expectations. This placed the share price under downward pressure. The US reporting season will shift into second gear tonight, with companies such as eBay and JP Morgan releasing quarterly updates.<\/p>\n

\n\tCommodities are equally treading water. Crude oil prices are effectively going nowhere (small losses overnight) and a similar picture emerges among base metals. Yesterday in London, nickel rose 1.4% and tin rose 0.6%, but other metals fell slightly. In China, the spot iron ore price fell by a further US$1.70 to US$152.90 a tonne<\/span>. That's four days in a row of mild losses (but losses nevertheless).<\/p>\n

\n\tAmong precious metals, platinum has again become pricier than gold and that hasn't been the case for the past ten months. However, the BIG story in gold bulls land is news the central bank in Germany has decided to repatriate its gold from the US Fed. Speculation centres<\/span> around whether we are witnessing a new trend? Comex<\/span> gold futures are up by US$14.50, or 0.9% to US$1,683.90 per ounce.<\/p>\n

\n\tIn FX, Kathy Lien reports "a day for reversals", with the rally in the EUR\/USD and USD\/JPY<\/span> halted by fundamental factors at key technical levels. FX specialists at NAB continue to observe funds flowing out of previous safe havens (CHF<\/span>, NOK<\/span>, SEK<\/span>) with the expectation this process can go on for a while.<\/p>\n

\n\tThe US dollar was again mixed against major currencies in European and US trade on Tuesday. The euro fell from highs near US$1.3385 to US$1.3310, lifted to around US$1.3340, but then slumped to US$1.3285 in afternoon US trade. The AUD held between US105.25c and US105.70c and was near US105.55c in the afternoon US session. And the Japanese yen lifted from 89.09 yen per US dollar to JPY88.31, and was trading at JPY89.73 in afternoon US trade.<\/p>\n

\n\tUS 2yr<\/span> yields fell by 1pt<\/span> to 0.249pct and US 10yr<\/span> yields fell by 3pts<\/span> to 1.82pct.<\/p>\n

\n\tYesterday, Rio Tinto ((RIO)) released quarterly production reports and analysts have reported that iron ore production proved better than expected, but copper seems to have disappointed. Given spot iron ore is still above US$150, this is interpreted as a good thing. However, some analysts have been quick in pointing out the report won't change the fact that Rio Tinto will report a massive retreat in profits next month. Some calculations go as deep as minus 40% in comparison with 2011. Cost cutting, effective capital management and the outlook for the price of iron ore will shape this year's share price performance.<\/p>\n

\n\tOn the calendar in Australia for today are lending finance, car sales and consumer sentiment data. In the US, consumer prices and industrial production data are released.<\/p>\n

\n\tP.S. Contrary to earlier message on Monday, I will not make an appearance on Sky Business tomorrow at noon. Should be back on air from next week onwards.<\/p>\n

\n\tAll overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX<\/span> and more available in the FNArena Cockpit.  Click here<\/a>. (Subscribers can access prices in the Cockpit.)<\/em><\/p>\n

\n\tAll paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.<\/em><\/p>\n

\n\tFind out why FNArena subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

A late rally kept US equities largely unchanged last night, but Apple continues to struggle. (Accessible only for subscribers before 10:15 AEDST)<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[84],"tags":[46],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/61123"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=61123"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/61123\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=61123"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=61123"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=61123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}