Morning thoughts and opening prices

Overnight, US and European equities continued their post-Greek bailout lull, trading down marginally in a relatively lacklustre session. Equity markets globally now seem to have reached an interesting inflection point, having gotten off to a great start to the year. US economic data has been broadly positive, China appears to be humming along despite all its naysayers, and while the Greek situation is far from solved, at least it appears to be contained, for now.

So where to for markets over the near term? In recent days there’s been a lot of focus on ‘Dow 13,000’, plus the fact the S&P is now edging up to its post- GFC high of 1370 and whether these levels will trigger a bout of profit taking or serve as a catalyst for a new wave of money to come into the market. At this stage the verdict appears evenly divided. As a result, it would not be surprising to see equity markets consolidate around current levels. While this may frustrate some, it is not necessarily a bad thing, as it builds a firmer base, a firmer support range, from which to eventually move higher.

Having managed three consecutive days of gains, the local market is set to see some early profit taking this morning. For the week to date, we have added 98 points or 2.3%, more than reversing last week’s decline of 1.2%. However, today we’re looking at losses on the open of approximately 23 points or 0.5%, with the market called to open around the 4270 level.

As is the case, particularly during earnings season, how the market opens and how it trades throughout the day are two very different beasts, and today we have another full plate of earning reports to digest from the likes of APN News and Media, Breville Group, Cabcharge, Consolidated Media, Iluka Resources, Origin Energy, Ramsay Healthcare and Toll Holdings. While the earnings of these individuals stocks will dictate their fortunes, the broader market will continue to beat to the global backdrop of current macro issues – the Greece debt plight and its potential contagion effects, building political tensions surrounding Iran, and by extension, the worrying rise in crude oil prices and the impacts it is having on the fragile US economic recovery.

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

BUDGET 2012:
Parliament Debate Live - Video Of Budget 2011
Keith Ng Interactive Graphic: How the Budget Breaks Down
BUDGET 2012 - FULL COVERAGE: Reports / Analysis - Press Kit - Reaction (from everybody) - Previews (from everybody) - Pre-Budget Announcements

Gordon Campbell: On the Budget’s Spreadsheet Victories

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Sludge Budget Report - Short The Dollar! MEMO: To international bankers FROM: C.D. Sludge Please short the dollar! It'll be good for both you and us. And you know you want to. Greexit, Eurogeddon... watch out... flight to quality and all that. Follow your instincts. The NZ Debt Management Office has been so surprised at the unprecedentedly low interest rates that it can borrow at that it has already entirely pre-funded the 2013 fiscal deficit - all $8 billion of it! More >>

Pattrick Smellie Comment: Doddling along the best we can hope forCriticising Budgets for lacking vision or imagination is like shooting fish in a barrel, but even so, this year's Budget again feels like a missed opportunity. Perhaps it's the intrusion of real world needs that means the government couldn't make better political use of the $558.8 million it expects to gather in its first partial asset sale. More >>