Daily Market Analysis by FxGrow

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Daily Market Analysis – 29th Sept, 2015

By FxGrow Research & Analysis Team

 

Stocks fall on weak Chinese data

 

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In China Industrial profits dropped 8.8% last month, showing the world’s biggest consumer of commodities is struggling with excess capacity, sluggish investment and weaker manufacturing, according to data released by China’s National Bureau of Statistics.

 

Following the weak Chinese data Major Stock indexes ended in loss yesterday. The S&P 500 and NASDAQ finished modestly in the red and strong gains for Nike (NKE) keeping the Dow Jones in the black.

 

Euro climbed up against the US Dollar and is presently trading at 1.1277 in the European trading session today.

 

In China a combination of lower sales, higher costs and weak prices as a result of soft demand has been weighing on the manufacturing sector’s earnings power. The pressure is particularly notable in the mining sector, offsetting modest gains elsewhere. China and the Fed have been the market’s primary pre-occupations lately, and this report adds to those worries.

 

The Australian dollar has fallen after weak Chinese industrial data added to evidence that the Chinese economy is slowing down. AUDUSD is trading at 0.6949 in the European trading session.

 

European stocks also declined on Monday as more disappointing Chinese data and downbeat analyst comment weighed on the stocks.

 

London's benchmark FTSE 100 index ended the day down 2.46 per cent to 5,958.86 points compared with Friday's close. In the Eurozone, Frankfurt's DAX 30 finished 2.12 per cent lower at 9,483.55 points and the Paris CAC 40 plunged 2.76 per cent to 4,357.05.

 

"Both the Australian and Canadian dollars fell sharply today as profits fell by the largest amount in four years. Earnings in the resource sector have been hit particularly hard and this put additional pressure on commodity prices. There are major economic headwinds in China and this will limit growth in countries that rely on Chinese demand" - BK Asset Management.

 

In the US, New York Fed President William Dudley noted that the Fed is still on track to increase interest rates in this year. He, however, stressed that the decision would be depend on the health of US economy and financial conditions, as well as global economic development.

 

In an interview with Wall Street Journal, Dudley suggested that "if the economy continues on the same trajectory it’s on…and everything else suggests that’s likely to continue…then there is a pretty strong case for lifting off".

 

"I am starting to see signs of imbalances emerge in the form of high asset prices, especially in real estate, and that trips the alert system. Given the progress we've made and continue to make on our goals, I view the next appropriate step as gradually raising interest rates, most likely starting sometime later this year" - San Francisco Fed President John Williams.

 

Crude oil is trading lower at $44.43 ahead of the estimates of U.S. crude stockpiles report.

 

Gold is trading lower in the Europe at 1127.87, while Silver is weak at 14.54

 

29th Sept 2015 – 06:42hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.