Monday, August 18, 2008

1) ASIA MARKETS: Exporters Advance As Commodity Stocks Retreat
August 15, 2008: 12:41 AM EST

Asian markets were mixed Friday, with resource stocks such as BHP Billiton and Cnooc dropping on a retreat in commodity prices, while technology shares such as Elpida Memory and Lenovo Group rose after an overnight advance on Wall Street.

The Nikkei 225 Average added 0.4% to 13,009.77, after three straight sessions of declines, while the broader Topix index rose 0.4% to 1,243.83.

In Hong Kong, the Hang Seng Index fell 0.5% to 21,289.18, while the Hang Seng China Enterprises Index added 0.1% to 11,265.18.

"I see some bargain-hunting these days, but big-scale buying is still absent," said Y.K. Chan, strategist at Phillip Capital Management in Hong Kong. "People are unwilling to take positions before the weekend."

China's Shanghai Composite rose 0.9% to 2,458.30, after dropping for five straight sessions. The index fell as low as 2,414.57 earlier in the day, before recovering.

Australia's S&P/ASX 200 added 0.1% to 4,986, New Zealand's NZX 50 index climbed 0.4% to 3,346.05, Singapore's Straits Times index fell 0.5% to 2,802.88 and Taiwan's Taiex inched up 0.1% to 7,329.72.

South Korean and Indian markets were closed for a holiday.

Technology stocks were spurred by overnight gains on Nasdaq, with Via Technologies Inc. climbing 5.7% and Advanced Semiconductor Engineering gaining (ASX) 0.4% in Taipei, while Lenovo Group (LNVGY) added 1.4% in Hong Kong. Shares of Elpida Memory (ELPDF) jumped 4.4% in Tokyo after taking steep losses recently.

Resource stocks gave up part of their gains from the previous session, with BHP Billiton (BHP) dropping 1.1% in Sydney after rising more than 5% Thursday, while Cnooc (CEO) skidded 4.5% in Hong Kong.

Among Japanese commodity traders, Marubeni Corp. (MARUY) shed 3% and Mitsubishi Corp. (MSBHY) dropped 1.9%.

CLSA Chief Strategist Christopher Wood wrote in a report the correction in oil and other commodities should sustain Asia's out-performance versus other emerging markets.

"Still, the commodity correction has a mixed message for Asia. It is occurring because growth is slowing globally and Asia, as ever, remains in part a warrant on global growth," he added.

Gold miners also slumped on a steep decline in the precious metal's prices, with Shandong Gold-Mining Co. losing 5% in Shanghai, while Zijin Mining Group Co. (601899.SH) shedding 4.8% in Hong Kong.

Shipping stocks extended gains after being thrashed over the past few weeks on shrinking marine-freight rates, with Nippon Yusen K.K. (NPNYY) rising 2.3% and Mitsui O.S.K. Lines (MSLOF) climbing 2.2% in Tokyo, while China Cosco Holdings Co. (1919.HK) gained 1.4% in Shanghai.

In Asian currency trading, the U.S. dollar bought 110.11 yen, compared with 109.58 yen late Thursday.

September crude-oil futures fell as much as 38 cents to $114.63 a barrel in electronic trading, after dropping 99 cents to $115.01 a barrel Thursday on the New York Mercantile Exchange. December gold futures dropped $12.5 to $802 an ounce, after slumping $17 to $814.50 on the Nymex Thursday.

On Wall Street, the Dow Jones Industrial Average (DJI) rose 0.7% to 11,615.93 and the Nasdaq Composite (RIXF) climbed 1% to 2,453.67, while the S&P 500 index (SPX) advanced 0.6% to 1,292.93.

2) Commentary by David Zwebner, CEO of CommStock Trading 

U.S. Economy
The Federal Reserve said that industrial production was up .2% in July, better than expected, after a .4% gain in June. The June eurodollars ended up .025 at 96.815.

The New York Federal Reserve's regional index of manufacturing increased from -4.92 to +2.77 in August, stronger than expected.

The University of Michigan's index of consumer sentiment increased from 61.2 to 61.7 in August, a little less than expected.

As has been the case for the past two weeks, the September U.S. dollar index closed up .515 to 77.35, the highest close in over six months, and pressured commodity prices lower.

Grains and Cotton
The USDA reported that Iran bought 689,310 tons of wheat from the U.S., 199,310 tons of which was already reported as sales to unknown destinations. Also, Dow Jones Newswires reported that Egypt bought 155,000 tons of wheat from Russia and Ukraine. December wheat fell 40.25 cents to $8.492.

December cotton fell 2.40 cents to 67.08, the lowest close in nearly a year, another victim of the stronger U.S. dollar.

Orange juice
Forecasters are saying that a region of low pressure over Dominican Republic has the potential to become a tropical depression as it moves northwest, possibly toward Florida or the Gulf of Mexico next week. November orange juice was down 1.50 cents at $1.0625.

Coffee
September coffee closed down 2.30 cents at $1.3285, the lowest in over three months, while Brazil's harvest is progressing without incident and the U.S. dollar is pressuring commodity prices.

Metals
December silver dropped $1.43 to $12.93, the lowest close in almost a year, as the strong U.S. dollar continues to pressure commodities, in general.

Analysts from Citigroup predicted that gold will recover from its current sell-off and average $950 per ounce in 2009. Yesterday, Goldman Sachs reduced its six-month forecast for gold from $905 to $810 per ounce. December gold fell $22.40 to $792.10, the lowest close in ten months.

September copper finished up 1.75 cents at $3.3225, one of the few commodities that was not sold off today.

Energies
OPEC said today in its monthly report that they produced 32.6 million barrels of oil per day in July, "well above the demand for its crude." OPEC also reduced its estimate of world growth for 2008 from 4.0% to 3.9%. October crude oil finished down $1.09 at $113.94.

China's Association of Automobile Manufacturers said that vehicle sales were up 6.8% in July from a year ago, the smallest annual gain in two years, as consumers are feeling the effects of higher gasoline prices.

Georgia's President Saakashvili signed a ceasefire agreement with Russia, in hopes of ending the fighting, but the invasion is not yet over.

Currencies  
Statistics Canada said that manufacturing sales totaled C$52.5 billion in June, up 2.1% from May and the fifth increase in six months. In constant dollars, sales were up .6% in June. Also, 143,270 new vehicles were sold in June, down 1% from May. The September Canadian dollar was up .32 at 94.34 while most other currencies were lower.

The September Japanese yen closed down .0064 at .9062, the lowest close this year, hurt by Japan's weak economy.

David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
Fax: +972-(0)2 624-4876
www.ecommstock.com

3) A Fan of Forex?

Interested in reading perspectives and analyses on the Forex market?  In learning what factors affect the Forex market every week and what to be on the lookout for?  In getting trade recommendations?   Email mona@ecommstock.com  to get your copy of a weekly Forex report.

4) Closing Prices for Friday, August 15, 2008 

Amidex: Amidex35 (Class No Load Shares), $14.84; Index, 2130.65, Daily Change, -.38%; “A” Shares NAV, $11.45.

Global Asset Management: Capital Appreciation, $269.56; Composite Absolute Return, $902.16; Diversity, $724.97; GAMCO, $919.65; Interest Trend, $251.48; Trading IV-US$ Class, $145.33; US$ Special Bond Fund, $442.00.

Invesco: Asian Equity Core, $4.65; Bond, $25.04; Emerging Markets Bond, $19.88; European Bond, EUR 4.3274; Gilt, GBP 12.12; Global High Income, $11.64; Japanese Equity Core, $1.41; UK Equity, GBP 5.14. 

JPMorgan Fleming: JF Eastern Smaller Co., $98.32; JF Japan, JPY 16,090; JF Japan Equity, $11.90;

JF Japan OTC, JPY 968; JF Japan Smaller Companies, JPY 35,375; JF Japan Technology, JPY 46,062; JF Korea, $39.49;

Pacific Securities, $183.63; Pacific Smaller Companies $21.56; Global Bond & Currency, $21.60;

JF America, $43.90; JF Europe, $44.21; JF Germany, EUR 20.46; JF Global Equity, $39.43.

PCP: North America, $11.95; Europe, $19.14; Emerging Markets, $17.82; Balanced, $8.36; Aggressive, $6.99.                                                                                             

Platinum (updated once a month – July 2008 Prices): All Weather, $128.87; Equity Plus, TBA; Prot. Equity Plus, TBA; Cap. Prot. Income Plus, TBA; Cap. Prot. Income Plus A, TBA.

Scottish Provident: Adventurous 1, GBP 2.824; Balanced 1, GBP 2.312; USD Adventurous 1, $2.240;

USD Balanced 1, $2.160; USD Cautious 1, $2.042; For Preference: Baring GUF Eastern Europe, $136.43; Fidelity Funds International, $33.690; Invesco Asian Equity Core, $4.680.

Mona Liss
CommStock Trading Ltd
PO Box 7777
Jerusalem 91077
Tel: +972-2-6244963
Fax: +972-2-625 9515