Morning thoughts and opening prices 16/3/12

In US trade, markets advanced after yet another round of positive economic data. US jobless claims fell back to a four-year low, suggesting underlying strength in the US labour market. PPI data showed that underlying inflation was contained, despite a pop higher in the headline PPI. Another report highlighted manufacturing in the New York region had expanded at the fastest pace since June 2010. The US dollar gave up some ground after the recent run, and this gave some relief to the commodities.

Among the major averages, the Dow Jones Industrial Average was up 0.4% at 13253. The S&P was 0.6% higher at 1403, and the NASDAQ climbed 0.5% to finish at 3056. This was the highest close for the Dow since December 2007.

With commodities bouncing back from the previous day’s falls, the local resource companies are set for a recovery today. This might not extend to the energy sector, as oil slipped overnight on speculation that the US and UK might release oil from strategic reserves. Gold stocks have been particularly hammered recently, and they will get a lift today after the precious metal clawed back 1%. Newcrest Mining tested $30 yesterday and could see a strong bounce off that level today. BHP’s ADR is pointing to a 0.4% gain at the open after having had a tough day yesterday.

Ahead of the open, we are calling the Aussie market up 0.4% at 4294. Once again, this sees us open near the key 4300 resistance level, which has held back the bulls on several occasions. In light of a vastly improving US economy, local stocks with high exposure to the US deserve attention, as the recovery remains on track. Some of the stocks to watch are James Hardie and Newscorp. Telstra will be in focus today, with Apple’s highly popular third-generation iPad set to go on sale. There is no major economic data to look out for on the local front today.

IG Markets provides round-the-clock CFD trading on currencies, indices and commodities. The levels quoted in this email are the latest tradeable price for each market. The net change for each market is referenced from the corresponding tradeable level at yesterday’s close of the ASX. These levels are specifically tailored for the Australian trader and take into account the 24hr nature of global markets.

Please contact IG Markets if you require market commentary or the latest dealing price.

ENDS

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