European Political Uncertainty Sends Stocks Sharply Lower
Binary Options Strategy | May 07, 2012 03:44AM ET
Asian markets traded lower on Monday. The Nikkei slipped .2% to 9542, the Kospi eased .1%, and the ASX 200 declined .3%. The Shangha Composite dropped .8%, and the Hang Seng sank 1.8%, weighed down by China Mobile’s 3% drop, after the company reported disappointing subscriber data. PMI data from China showed factory output was still declining, although not as much as expected.
European markets tumbled, after the Dutch cabinet resigned as they failed to reach an agreement over austerity measures. The DAX plunged 3.4%, the CAC40 tanked 2.8%, and the FTSE slumped 1.9%. In France, socialist candidate, Francois Hollande won the first round of voting in the French presidential election, a significant setback to incumbent Nicolas Sarkozy. The second round of voting will take place in 2 weeks.
US stocks closed lower, but fared better than their European peers. The Nasdaq dropped 1% to 2970, the S&P 500 fell .8% to 1367, and the Dow skidded 102 points to 12927.
Nasdaq Drops 1%
Netflix dropped 4% ahead of its earnings announcement, and plunged an additional 16.7% in after hours trading after warning of a slowdown in growth.
Currencies
The Dollar traded mostly higher in Monday’s currency trading. The Swiss Franc and Australian Dollar both declined .6%, and the Euro fell .5% to 1.3152. The Pound traded flat, while the Yen rose .4% to 81.18.
Economic Outlook
Tuesday’s reports will include the Case-Shiller home price index, the FHFA hompe price index, new home sales, and consumer confidence.
US Stocks Trade Mixed Ahead of Apple’s Earnings Report
Equities
Asian markets traded mixed on Tuesday. The Nikkei dropped .8% to 9468, and the Kospi declined .5% to 19163, a 3 month low. Inflation data from Australia came in far below expectations, pushing down the Australian Dollar and lifting stocks. The ASX 200 rose .2% to 4360. China’s Shanghai Composite closed flat, while the Hang Seng edged up .3%, as the Bank of Beijing rallied nearly 4 on solid earnings.
European markets rallied, led by banks, which bounced 2% after Monday’s 3% slide. The CAC40 jumped 2.3%, the DAX climbed 1%, and the FTSE rose .8%.
US indexes closed mixed, as the Dow rose 74 points to 13002, the S&P 500 rose .4%, and the Nasdaq slipped .3%.
Apple shares dropped 2% to 560.28, ahead of its earnings report. After the close, the stock soared 7.8% to 603.81, following another set of impressive profit and revenue data.
Apple's Recent Slide due to Earnings Concerns
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Radio Shack tumbled 10.6% after reporting a loss, dropping to its lowest level in more than 30-years.
Currencies
The currency markets traded in relatively narrow ranges on Tuesday, and the Dollar declined modestly. The Pound edged up .1% to 1.6138, the Euro gained .2% to 1.3189, and the Swiss Franc rose .3% to 1.0977. The Australian Dollar slipped .2% to 1.0299, largely recovering from an earlier drop down to 1.0249, while the Japanese Yen declined .2% to 81.31.
Economic Outlook
New home sales fell to 328K from 353K, dropping less than expected. Home price data was conflicted, as the FHFA home price index showed an increase of .3%, better than forecast, while the Case-Shiller home price index showed an annual drop of 3.5% in prices.
Apple’s Blowout Earnings Lift US Stocks
Equities
Apple’s sterling earnings reports pushed up Asian markets at the open, but the indexes closed mixed. The Nikkei climbed 1% to 9561, and the Shanghai Composite gained .8% to 2507. On the losing side, the Hang Seng slipped .2% and the Kospi eased .1%.
Mainland European markets rallied on Wednesday, with the CAC40 up 2%, and the DAX up 1.8%, while the UK’s FTSE closed flat. Automakers rallied after Peugeot Citroen and Valeo reported solid profits, climbing 4.6%, and 8.7% respectively.
US stocks advanced, particularly tech shares, following Apple’s earnings report. The Nasdaq surged 2.3% to 3030, the S&PP 500 jumped 1.4%, and the Dow added 89 points to 13091.
Apple shares popped 8.9% to 610 after blowing past analyst estimates. 14 brokerages upgraded the stock.
Currencies
The Dollar slipped on Wednesday as Fed chairman, Bernanke, reiterated his commitment to additional easing, if needed. The Pound, Swiss Franc, and Euro each rose .2%. The Australian Dollar gained .3% to 1.0353, and the Canadian Dollar rallied .4% to .9836, while the Yen closed little changed at 81.34.
Economic Outlook
Durable goods orders fell 4.2% , far more than forecast, while the less volatile core durable goods orders unexpectedly dropped 1.1%. The Fed raised its projection for economic growth to 2.4%-2.9% from January’s 2.2%-2.7% forecast.
Stocks Gain on Strong Housing Data
Equities
Asian markets traded mostly higher on Thursday. The Kospi inched up .1% to 1964, despite a 6.2% drop in LG Electronics, and the ASX 200 gained .3% to 4375. The Hang Seng rallied .8% to 20810, while the Shanghai Composite eased .1%, and the Nikkei closed flat.
European markets closed mixed, as banks fell 2.3% following lackluster earnings from Deutsche Bank. The FTSE and DA advanced .5%, while the CAC40 declined .1%. Automakers extended their gains from the previous session, rising 2.7%, after Volkswagen reported strong earnings, pushing the stock up 7.8%.
US stocks rallied, as the Dow jumped 114 points to 13205, ad the Nasdaq and S&P 500 both climbed .7%.
Dow Tacks on 114 Points
H&R Block tumbled 10.7% to 14.95 after announcing it would close stores and layoff employees to cut costs.
Currencies
The Dollar declined against global currencies on Thursday. The Pound edged up .2% to 1.6195, while the Euro and Swiss Franc inched up .1%. The Yen spiked .5% to 80.95, and the Australian Dollar climbed .3% to 1.0396.
Economic Outlook
Weekly unemployment claims dropped by 1K to 388K, significantly worse than expectations for a drop to 374K. However, pending home sales surged by 4.1%, blowing past analyst forecasts for a 1.2% gain.
Stocks Rise Despite GDP Disappointment and Ratings Cuts
Equities
The Bank of Japan announced it would expand its current asset purchase program by another $124 billion, but the news had little lasting impact on the region’s markets. The Nikkei closed down .4% to 9521, surrendering a brief gain following the announcement. The Kospi rose .6%, boosted by Samsung Electronics 2.5% gain, after announcing a record $5.2 billion profit for the first quarter. The Shanghai Composite slipped .4% to 2396, and both the Hang Seng and ASX 200 declined .3%.
S&P cut its debt ratings on peripheral European countries by 2 notches, although the equity markets failed to notice. Spain’s IBEX jumped 1.7%, the CAC40 gained 1.1%, and the DAX rose .9%. Trailing behind, the FTSE posted a respectable .5% gain. Superb earnings by Swedish engineering firm, Sandvik, helped push stocks higher, as the stock rose 12.5%.
US stocks closed higher, despite disappointing GDP data. The Dow added 24 points to 13228, the Nasdaq climbed .6% to 3069, and the S&P 500 gained .2% to 1403. The Nasdaq rallied 2.3% this week, its biggest gain in 3 months.
Currencies
The Dollar fell against all major currencies on Friday. The Yen and Australian Dollar both jumped an impressive .9%, to 80.29 and 1.0467, respectively. Meanwhile, the Swiss Franc, Euro, Canadian Dollar, and Pound moved up .5% in an unusually synchronized effort.
Economic Outlook
US GDP grew at an annualized 2.2% rate in the first quarter, slower than the 2.6% expected. On a brighter note, consumer sentiment climbed to 76.4, exceeding forecasts.
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