Daily Analysis – Strong Chinese Data Sends Global Markets Higher |
Equities
Strong industrial production data from China help lift Asian markets. The Nikkei gained 1.1% to 9548, the Kospi climbed 1.4% and the ASX 200 rose .5%. China’s Shanghai Composite rose 1.1%, but the Hang Seng closed down .1%. Inflation data from China showed inflation rose to 5.5% in April, the highest level in nearly 3 years. After the close, China’s central bank raised reserve requirements by .5% in an attempt to slow inflation and growth.
European markets bounced, as the upbeat Chinese data reassured investors that the global economy’s recovery is on track. The DAX rose 1.7%, the CAC40 rose 1.5% and the FTSE rose .5%.
In the US, the markets rallied, as the Dow rose 123 points to 12076 and the Nasdaq climbed 1.5%. Best Buy shares rose 4.6% after beating earnings estimates, and GT Solar surged 9.5% after raising its outlook.
Nasdaq Jumps 1.5% as Equities Rally
JC Penney named Ron Johnson, former head of Apple’s retail operations, as CEO. The company’s shares rocketed 17.5% higher on the news.
Treasuries and Commodities
Bonds fell sharply, as 10-year notes dropped 29/32 to yield 3.09% and 30-year notes tumbled 1 18/32 to yield 4.29%. Congress’s inability to reach an agreement regarding the debt ceiling has raised concerns about the US’s credit rating, vocalized by Bernanke yesterday.
Crude oil bounced back from Monday’s slide, gaining 1.9% to 99.15. Gasoline futures rose 2% to 3.057, while natural gas slid 1.4% to 4.581.
Metals traded mostly higher, led by copper which surged 3.1% to 4.158. Silver added 2.2% and gold rose $10 to 1526.60.
Agricultural futures closed mostly lower, as a favorable crop report triggered selling. Corn fell 3.5%, leading the declines, while wheat shed 1.6%.
Currencies
The renewed appetite for risk sebt safe haven currencies lower, as the Swiss Franc sank 1% to .8452, and the Yen eased .3% to 80.47. The Canadian Dollar rose .7% to .9691, and the Australian Dollar gained .6% 1.0680. The Pound closed flat, while the Euro edged up .2% to 1.4449.
Economic Outlook
Retail sales slid in May, but less than expected, and business inventories rose by .8%, slightly less than expected. PPI rose by .2% , more than expected, but core PPI was in line with estimates.
Wednesday’s heavy economic calendar will include CPI, the Empire State Manufacturing Survey, Industrial Production, the NAHB Housing Market Index, weekly mortgage applications and weekly oil inventories.
-Bradley Welcher
About the author: BinaryOptionStrategy- David Frank
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