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What commenced as a positive session for technology stocks ended with declines once again in the US market. Buying in the sector sent prices for the S&P 500 IT sector to a fresh 2-week high shortly after the open, only to see all gains erased to close the session 0.59% lower compared to last Friday’s close. The wobbliness of prices continue to suggest the indecisiveness of investors with regards to the best performing sector in the US markets. While this may remain an on-going theme in the near term, the notable move had been the edging up of rate-sensitive sectors on Monday.
Soft data in the form of lower-than-expected durable goods orders (down at -1.1% month-on-month) triggered a slight flight to safety with US dollar beaten and treasury yields taking a slide. For bank shares, gains had been sentiment led as the bailout of the troubled Italian banks and the anticipation for Wednesday’s bank stress test results boosted the outlook for the sector. This optimism could transpire to Asian markets in the day and help to offset some of the weight from the tech roil.
Indonesia and Malaysia markets remain away for the second trading day of the week though Singapore, India and Philippines will return, bringing back some liquidity to the markets. Early movers in the region have been seen with mixed movements thus far with the trend expected to continue in the day.
A neutral open is expected for the Hong Kong market based on our opening call while the local Singapore market is expected to play catch-up to the rest of the Asian markets today with moderate gains expected at the start of the session.
While oil prices appears to have found some stability, gold took over in shocking the market with a plunge. Without the ability to confirm the root of the cause, the drop in gold prices had largely been blamed as a result of fat finger. Prices had managed to retrace some of the losses from the depths of $1236.43, but remained on weak footing at $1242 levels when last checked at 9am Singapore time, eyeing the 200DMA of $1236.62. Watch for a dip below the latter especially with US dollar etching some gains ahead of Federal Reserve Chair Janet Yellen’s speech in the day, where the Fed’s hawkish stance is expected to be reaffirmed.
China’s industrial profits will be due early morning ahead of a speech by Chinese Premier Li Keqiang. Post Asian hours, US June conference board consumer confidence is expected with a moderation from the previous reading. The key attention should however be accorded to Fed speakers lined up for the day including Federal Reserve Chair Janet Yellen.
Yesterday: S&P 500 +0.03%; DJIA +0.07%; DAX +0.29%; FTSE +0.31%