Pivotfarm Daily News Harvest 2nd August 2010

Markets in a Flash

·        
Asian equity markets closed
higher this morning. The Hang Seng Index was higher by +1.82%, while the
Japanese Nikkei 225 was higher by +0.35%.

·        
European equity markets have
retraced Fridays losses and all higher. The FTSE 100 is up by +1.89% at
lunchtime in London.

·        
Commodities are pushing higher
at the start of the weak as investor look for more risk. Oil has broken above
$79.50. Gold is falling as investors avoid its safety, and it is now below
$1180.

·        
The EUR/USD is trading near its
3month highs as its lacks real direction in today’s session.

·        
The GBP is looking strong
today, against the dollar it is pushing to new 5 month highs.

·        
US equity futures are higher by
over +1%. This indicates a rise in the equity markets at the opening bell.

News Focus

HSBC Profits Hit $11.1Bn

HSBC has posted
profits of almost double for the first half of the year. Profits have been
boosted as the company’s bad debt has fallen to the lowest level since before
the financial crisis. Pre-Tax profits of $11.1Bn have risen from $5.02Bn for
the same period last year. HSBC profits came in ahead of expectations and
pushed the share price higher, but the increase in profit was boosted by write
downs of bad debt which disguised the fact that the company did not do as well
with revenue.

Investors Ignore Asian Data

Data released in
Asia for the purchasing managers indices of China,
South Korea and Taiwan all
suggested that the economies were slowing. The figures from the three countries
were all at multi month lows. Data released over the weekend from China also
showed that the economy is slowing, the Chinese PMI fell to its lowest level
since February 2009. This data did not make investors bearish as Asian and
European markets have risen today.

Coming up Today

1000ET – ISM Manufacturing
Index

Previous                               56.2                       Consensus          54.0 

Consensus Range            52.5 to 55.5 

After the figure slipped lower last month
to 56.2, this month is expected to follow suit and post an even lower reading.
As the level of the index falls it shows that manufacturing growth in the
economy is slowing, this would follow the recent trending in other economic
indicators. A strong figure today with put bullish pressure on the US equity
markets and should bode well for the dollar.

1000ET – Construction
Spending

M/M change

Previous                              -0.2 %                    Consensus          -0.5 %

Consensus Range            -0.9 % to -0.3 %

This measure of new spending on
construction across the country gives an indication to the health of the
housing markets. It also shows a wider picture of the economy as construction
spending creates strong cash flows through the rest of the economy. If the
figure is positive it shows that the amount spent on construction is
increasing.

Comments

[SheepDog-One]

All indexes simply must go higher, as ordered.

[MiningJunkie]

Never underestimate the replacement power of equities within a hyperinflationary spiral. Long live QE II !!!