Market Uninspired By Local Data
11.33 AEDT, Friday 1 March 2013
Market Uninspired By Local
By William Leys (Sales Trader, CMC Markets)
The local market is considerably softer this morning, after a weaker lead from the US overnight, and the release of some uninspiring local economic data.
Positive US jobless claims and Chicago PMI data had the Dow within spitting distance of an all-time high, but the day's modest gains were erased just before the close as the Senate rejected a plan to avoid $85 billion of automatic spending cuts, known as the sequestration. While markets did not panic, it clearly remains a concern for investors, as it creates a degree of uncertainty for the world's biggest economy.
However, it is economic news that will be the key driver as the day progresses, with a slew of data being released.
The AIG Manufacturing Index, was the first cab off the rank. The measure of 45.6 indicates the sector is contracting, but at a lesser rate than the previous month. The RP Data and Rismark house price index data was up 0.3%, following January's increase of 1.2%.
The Chinese Manufacturing PMI, due at 12pm AEDT will likely have a greater impact. The expectation is 50.5, so anything above should provide some support, particularly to the materials sector. Conversely, anything below may extend the day's losses into the afternoon.