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David Orth Real Wealth – markets update

GLOBAL The U.S stock market endured a daylong selloff last night with the S&P 500 ( -1.7% ) sliding below its 50-day moving average. The diminished prospects for solid earnings growth abroad ( due to the stronger dollar ) broadsided the six growthsensitive sectors while countercyclical groups did not fare much better. Sellers remained in control throughout the day with the two largest sectors by weight—technology ( -2.2% ) and financials (-2.1% )—pacing the retreat. Large cap tech names like Apple, Google, and Facebook lost between 2.0% and 2.5% while Qualcomm outperformed, falling 1.1%, after announcing a $15 billion repurchase program and increasing its quarterly cash dividend to $0.48/share.

Elsewhere among cyclical sectors, the consumer discretionary space ended in-line with the broader market, but that masked an 11.5% surge in the shares of Urban Outfitters. Acadia Pharmaceuticals Inc. rose to its highest price ever after the company cancelled two investor meetings, sparking speculation that a deal to buy the drug maker could be in the works. Acadia, which is developing drugs for Parkinson ’ s and other disorders of the nervous system, rose 18 percent to $45.88. The S&P 500 settled on 2,044.17. European stocks fell Tuesday, as speculation about a rate hike in the U.S. and concerns over Greece ’ s reform program outweighed optimism over the European Central Bank ’ s bond buys.

The benchmark Stoxx Europe 600 index slumped 0.9% to end at 389.66. But outperforming the index, banking giant Credit Suisse Group AG jumped 7.8% after news that Prudential CEO Tidjane Thaim will take over the helm at the Swiss bank. Markets were hampered by a selling spree in U.S. stocks. A solid February jobs report released last week has increased speculation the Federal Reserve ’ s statement next week might hint at a rate increase in coming months. The European energy group SXEP, -3.48% suffered the biggest loss among major sectors, with dollar-denominated oil prices hit by the surge in the U.S. dollar against its rivals. The Euro group of Eurozone finance ministers urged Greece on Monday to stop wasting time and get moving on identifying economic reforms that satisfy its international lenders — a prerequisite to unlock the next tranche of financial aid to Greece. The country is at risk of running out of cash later this month, unless it receives more money.

COMMODITIES WTI for April delivery fell $1.71, or 3.4%, to $48.29 a barrel on the NYME. The U.S. Energy Information Administration will release its inventory data for the week ended March 6 on Wednesday. Analysts surveyed by The Wall Street Journal expect that crude supplies rose by 4.8 million barrels in the week. stocks are already at their highest level in about 80 years. Gold has fallen to a three-month low, pressured by the US dollar’s rise to its highest in nearly 12 years and renewed expectations of a midyear interest rate increase in the U.S. Gold dropped to its lowest since December 1 at $US1,155.60 an ounce.

FOREX The U.S. dollar rallied to a 12-year high amid signs that the U.S. Federal Reserve may move to raise interest rates by June. Many investors see last Friday’s strong U.S. jobs report for February as the nail in the coffin for the Fed hiking this year. Also of note, the dollar hit eight year highs against the Japanese Yen. The dollar sits at 98.62 against a basket of majors. The Australian Dollar dipped to 76.27 U.S cents after the twin disappointments of falls in both the ANZ weekly consumer confidence and NAB business confidence yesterday. The Aussie, with a loss of 0.68%, was the worst performing major currency. The Canadian dollar was lower Tuesday as the greenback appreciated and oil prices were also squeezed by an upwards revision to U.S. crude oil production. The two factors led to the drop of 0.53 U.S cents to 78.86.

David Orth Real Wealth – markets update