{"id":61131,"date":"2013-01-17T08:16:07","date_gmt":"2013-01-16T21:16:07","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2013\/01\/17\/the-overnight-report-oooops-iron-ore-falls-nearly-5\/"},"modified":"2013-01-17T08:16:07","modified_gmt":"2013-01-16T21:16:07","slug":"the-overnight-report-oooops-iron-ore-falls-nearly-5","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2013\/01\/17\/the-overnight-report-oooops-iron-ore-falls-nearly-5\/","title":{"rendered":"The Overnight Report: Oooops! Iron Ore Falls Nearly 5%"},"content":{"rendered":"

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

\n\tThe S&P500<\/span> managed to eke out a gain overnight of a full 0.29 point to close at 1472.63 (don't ask for a percentage change, it hardly registers on any scale of sanity). The Dow Industrials remained 23.66 in the negative (13511.23), largely on selling pressure for major component Boeing , while a recovery in Apple shares pushed up the Nasdaq<\/span> a whole 6.77 points to 3117.54 (up 0.22%).<\/p>\n

\n\tYes, it was again a day full of fireworks….. NOT!<\/p>\n

\n\tSome observers were a bit worried on Tuesday that Ben Bernanke's public appearance might indicate the Federal Reserve is looking to abandon its ultra-monetary stance later into calendar 2013. But if the latest read on consumer inflation can be taken as a guide, those observers shouldn't worry just yet as America's CPI is still moving at subdued pace. In fact, December's modest 0.1% rise in core inflation -the fifth such increase in the past six months- can easily be used as a justification for keeping monetary stimulus going for longer. The headline number was flat (0.00%) further reinforcing the Fed's argument. Annual inflation in the US remains at 2%.<\/p>\n

\n\tThe Fed Beige book signalled<\/span> minor, gradual improvements in about all regions and segments of the US economy. Nothing we didn't already know from recent economic data and indicators. Key words in the state of the US economy remain "moderate" and "modest" and the latest Beige Book printed both terms in abundance. December’s industrial production figure showed a gain of 0.3% and was smack bang in line with consensus expectations. An index of sentiment among home builders came out below expectations.<\/p>\n

\n\tOn a global scale, the World Bank<\/span> lowered its growth prognostication to 2.4% for 2013, down from the previous 3% estimated in June last year. The main culprit was Europe, where growth is now expected to print minus 0.1% this year instead of the earlier positive estimate of 0.7% for the troubled zone.<\/p>\n

\n\tIn corporate news, JP Morgan CEO Jamie Dimon<\/span> did the honourable<\/span> thing and had his pay cut in half to take responsibility for last year's "Whale" trading loss of US$6bn<\/span>. He's still the highest paid CEO on Wall Street. Go figure. Both JP Morgan and Goldman Sachs released their quarterly performances last night and both beat market expectations, putting a positive bias under the share prices of US financials. Whether it's time to genuinely get excited about US financials remains a matter of contention. JP Morgan and Goldman Sachs are arguably the better ones in the sector. Northern Trust and Bank of New York Mellon also reported overnight and both disappointed, putting downward pressure on their shares.<\/span><\/p>\n

\n\tShares in Goldman Sachs apparently set a new high today. The star performer on the day in the sector was Genworth<\/span> Financial, which while under threat of being de-rated<\/span> to junk status, announced a corporate restructuring and saw its shares shoot 9% higher.<\/p>\n

\n\tAircraft maker Boeing was under pressure the whole day after Japanese airlines grounded their fleet following a Dreamliner<\/span> incident in Boston. In the tech sector it was "opposite day", with recent star performer Dell retreating after some hefty gains earlier this week and Apple reversing the trend of weakness seen over the previous two days.<\/p>\n

\n\tIn Europe, Spain once again reiterated there will be no need for a bailout (nothing new there). European bourses<\/span> in general provided little direction.<\/p>\n

\n\tContrary to all speculation about one direction only this year for US treasuries, bond prices actually rose overnight (yields lower). Economic data met expectations and the Federal Reserve reportedly bought US$1.474 billion in Treasury coupons maturing from February 2036 through November 2042. US 2yr<\/span> yields fell 1pt<\/span> to 0.249% and US 10yr<\/span> yields fell by 2pts<\/span> to 1.825%. According to the latest update on funds flows, central banks in India and China remain active buyers of US debt.<\/p>\n

\n\tIn foreign exchange markets, Kathy Lien reports "deleveraging<\/span> and profit taking" dominated the day with Japanese government officials indicating a rapid weakening of the yen can be as dangerous as an expensive currency for the Japanese economy.<\/p>\n

\n\tAll in all, the US dollar largely traded sideways against major currencies in European and US trade on Wednesday. The Euro held between US$1.3255 and US$1.3325 and was near US$1.3290 in afternoon US trade. The AUD held between US105.30c and US105.70c and was near US105.65c in afternoon US trade. And the JPY<\/span> eased from 87.79 per US dollar to JPY88.66, and was trading at JPY88.51 late in the US session.<\/p>\n

\n\tMetals in London showed little movement. Crude oil prices booked small gains on the back of a positive read on US inventories. Gold barely budged despite all the excitement among gold bugs across all the continents about the Germans repatriating their gold from US vaults. Not so in iron ore: China Fe62<\/span>% spot iron ore price fell by US$7.50 to US$145.40 a tonne<\/span> yesterday, that's a loss of 4.9% in one day. As the share market had already grown sceptical in recent sessions, it remains yet to be seen how much pressure this will exert on share prices for pure play equities in today's session in Australia.<\/p>\n

\n\tOn the day's calendar today are unemployment data for Australia (no longer representative but we'll work with whatever we have at hand), while later in the US, data on weekly claims for unemployment insurance will be released together with housing starts and the Philadelphia Fed index.<\/p>\n

\n\tContrary to earlier reports, I will NOT be on Sky Business today.<\/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":"

Financials were in focus overnight as was iron ore on a near 5% fall in China. (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\/61131"}],"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=61131"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/61131\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=61131"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=61131"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=61131"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}