\n\tBy Greg Peel<\/p>\n
\n\tThe Dow closed up 46, or 0.3%, while the S&P was flat at 1494 and the Nasdaq<\/span> tanked 0.7%.<\/p>\n \n\tRooster one day, feather duster the next. The previously all-conquering Apple – biggest company in the world – has begun to sour. Cockiness, missing Steve, or Samsung? Or a combination thereof? Either way, the reality is the iPhone5<\/span> has been outsold by the Galaxy and the iPad Mini has been stuck somewhere between phone and pad without succeeding at either. The bigger they are etc. Apple shares had already been sold heavily off their highs prior to yesterday's disappointing earnings report and fell 12% last night. None of this has much impact on Australia, other than the positive of reducing the market cap influence a single stock has been having on Wall Street moves.<\/p>\n \n\tIndeed Apple has become a bit of a sideshow now in the US as well, more circus entertainment than economic indicator. A more important indicator was released last night, being the “flash” estimate of the US manufacturing PMI for January. It came in at a healthy 56.1, up from 54.0 in December. The release followed the earlier eurozone<\/span> equivalent, which at 48.2 still indicates contraction, but at a slower pace than December's 47.2. The eurozone<\/span> has been very slowly clawing its way back. And yesterday, of course, we had the local favourite<\/span> Chinese estimate from HSBC, which showed an increase to 51.9 from 51.5.<\/p>\n \n\tIf confirmed, the Chinese number underscores indications China's economic slowdown of 2012 has now bottomed out and China has returned to mild (by Chinese standards) growth, commensurate with a regime change and otherwise seasonal phases. Forget not that next month brings the week-long Chinese New Year holiday which, every year, encourages frenetic activity beforehand and somewhat of a vacuum for a short while after. At this time of year all Chinese data have to be evaluated with the holiday impact in mind.<\/p>\n \n\tSpeaking of seasonality, I don't often highlight the weekly new jobless claims numbers from the US given they are week-on-week volatile and potentially misleading, other than to note an underlying trend. However last week's drop of 40,000 new claims has been followed up by another 5,000 this week to total 330,000 and give the impression US unemployment is suddenly falling like a stone (anything below 400,000 is roughly considered to imply a reduction in unemployment). The 40,000 number sparked a bit of head scratching, however, and sure enough it's all to do with how the various US holidays fall in January 2013 vis<\/span> a vis<\/span> days of the week. Cutting a long story short, prepare for some corrective distortion ahead.<\/p>\n \n\tWall Street still liked the claims number last night, as well as the PMI numbers both domestic and international. Apple may have sucked down the Nasdaq<\/span> against the tide (Netflix is up 43% after its earnings result), but Pfizer (Dow) was the latest blue chip to post a beat and the general mood remains buoyant. Technicals<\/span> came into play last night nevertheless. When the Dow reached a 100 point gain in the morning the S&P 500 breached 1500. Profit-taking was thus triggered and the indices pulled back. Looks like we've found our first technical challenge for the January rally, as I flagged yesterday.<\/p>\n \n\tThe rollercoaster story that has been the yen of late took another turn yesterday. We recall that the forex<\/span> punters all sold down the yen ahead of the BoJ<\/span> meeting earlier in the week and then scrambled to short cover when policy failed to deliver. Yesterday, however, the yen was slapped again when a government official suggested a dollar-yen of 100 would “not pose a problem”.<\/p>\n \n\tNow for those inexperienced in currencies we need to note that when the yen is quoted against the US dollar it is quoted in terms of dollars to yen (USDJPY<\/span>), which is the opposite of how we quote the Aussie, ie<\/span> in terms of Aussies<\/span> to dollars (AUDUSD<\/span>, and hence the expression “Aussie dollar”). This means that when the yen falls against the greenback, it falls “up”. The dollar-yen is currently around 90 so the Japanese official is suggesting it can “fall” to 100. To complicate the issue, if we're talking about the Australia-Japan exchange rate we maintain the same system as the US dollar, ie<\/span> Aussies<\/span> to yen. Hence a fall in the AUDJPY<\/span> literally does mean lower numbers.<\/p>\n \n\tThe overnight plunge in the yen nevertheless did little to shift the US dollar index, which is up only a tad to 79.93. A funny thing happened in the Aussie, however, as it is down almost a cent over 24 hours to US$1.0462 despite the supposedly positive influence of the Chinese PMI. Gold also copped a pounding, dropping US$17.80 to US$1669.10\/oz. From gold's perspective, traders cite the failure of the metal to push through 1700 as causing a loss of heart coupled with globally positive data rendering the “safe haven” less attractive. With a bit of licence<\/span>, we could put the Aussie in the same camp and thus explain the big drop.<\/p>\n \n\tBase metals were boring last night, while iron ore ticked up another US90c<\/span> to US$148.60\/t. The oils were slightly stronger with Brent up US22c<\/span> to US$113.25\/bbl<\/span> and West Texas rebounding by US82c<\/span> to US$96.05\/bbl<\/span>.<\/p>\n \n\tThe SPI<\/span> Overnight is up a healthy 16 points, or 0.3%.<\/p>\n \n\tThere were further US earnings releases after the bell, with Dow components Microsoft (also now challenging Apple with its own tablet offering) and AT&T both largely matching expectations and trading flat in the after-market.<\/p>\n \n\tThe highlight for this evening data-wise will be a first look at the UK December quarter GDP, but not before Atlas Iron ((AGO)) and BC Iron ((BCI<\/span>)) report their production reports today. ResMed<\/span> ((RMD<\/span>)) will also release its quarterly earnings.<\/p>\n \n\tNote that Monday is a holiday in Australia hence no regular FNArena<\/span> service. The Monday Report will be published on Tuesday with a wrap of both the Friday and Monday night sessions offshore.<\/p>\n \n\t <\/em> \n\tAll paying members at FNArena<\/span> 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\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<\/span> Cockpit. Click here<\/a>. (Subscribers can access prices in the Cockpit.)<\/em><\/p>\n