Frankenstorm spoils the party

15.07 AEDT, Tuesday 30 October 2012

Frankenstorm spoils the party
By Ben Taylor (Sales Trader, CMC Markets)

Local stocks are trading slightly lower today following leads from European markets as Hurricane Sandy makes its full force known to American shores.

While US futures markets are currently pointing to a 0.8% fall the US markets will remain closed tomorrow and some are suggesting they may also be closed on Wednesday. If this were to happen it could spell an administration nightmare for fund managers who use the end of the month to mark their investment portfolios for reporting. Company earnings and economic data release times are being moved around while the US presidential campaign has been thrown into chaos. The estimated damage bill could come in upwards of $3 billion and Insurer QBE is down 1.3% due to its current exposures in the US.

Local new home sales continued to disappoint today. The result points to an increased percentage chance of another interest rate cut in November to stabilise the ongoing housing weakness.

Risk aversion due to Hurricane Sandy, political issues in Italy and increasing chances of a November interest rate cut has seen the Aussie dollar show some signs of weakness today. Currency markets are also focusing on the BoJ potential for a new round of monetary easing measures.

ENDS

Web: http://www.cmcmarkets.com/

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