Daily Market Update

Daily Market Update

Daily Market Update Oil dominates markets; Japanese election has little effect
Asian markets closed lower today as concern continued over oil prices. Last week’s drop in energy stocks and the knock-on effect to other sectors has weakened confidence and prompted risk-averse investors to take profits. Yesterday’s election result in Japan which saw the re-election of Prime Minister Shinzo Abe was no surprise to the markets and had little effect. In Europe there has been an upturn in stocks after a flat start. Oil is trending up but is set to stay volatile however energy stocks have helped push the main indexes higher for now. US stock futures are lower along with gold.
 
Today’s data
Empire State Manufacturing Survey at 8.30am ET
Industrial Production at 9.15am ET
Housing Market Index at 10am ET
Bill The Butcher, New York Sub Co and Seanergy Maritime are among those reporting today.
 
Fed considers dropping ‘considerable time’ from policy statement
The Fed will meet this week and will announce its latest monetary policy statement on Wednesday afternoon and there is speculation again that the tone on interest rates will change. Analysts are predicting that the central bank will drop reference to ‘considerable time’ for holding rates at their current low. With the US economy outshining the global landscape there is expectation of a rate rise next year with the summer looking likely according to many economists.  
 
US oil states start to feel the pressure
The effects of the persistently low oil price are starting to show in some of the US oil states with Texas, Alaska, North Dakota, Oklahoma and New Mexico all likely to feel the pressure in the coming months. In Texas the first oil industry layoffs have been announced and realtors are predicting a drop of 12 per cent in house prices next year as a result of the slowdown. Consumer sentiment in oil states is also lower according to recent reports. Read the full story.
 
PetSmart agrees sale for $8.7 billion
PetSmart has agreed to be acquired by private equity firm BC Partners for around $8.7 billion. The deal, announced yesterday, will cost BC Partners $83 per share, a 6.8 per cent premium on the retailer’s closing price on Friday. The firm has been looking at its options since the summer.
 
3 per cent mortgage downpayment could be risky says Shiller
Respected economist Robert Shiller says the newly-announced low down-payment mortgage product from Fannie Mae and Freddie Mac sounds risky. Shiller told CNBC that it could be a risk for both mortgage lenders and the mortgage insurer and could result in a shortfall if borrowers default and the property is sold. Shiller has commented on other housing market issues; he sees a resurgence in demand for homes in remote suburbs due to lower gas prices making the commute more affordable; overall though he warns that property may not be the best investment. Read the full story.
 
Healthcare deadline looms; most appear to opt for autoroll
Tonight at midnight Pacific time is the deadline for enrolment into health plans under the Affordable Care Act but it seems that many are choosing to let their current plan auto-renew rather than face the confusion of the online insurance markets. Those who are already in a plan and don’t need to make any changes can simply allow their current plan to roll-over for another year, but those with changes to make or who want to arrange a new plan only have hours left to do so. The Obama administration will be hoping for 2 million new plans to hit their target of 9.1 million. Read the full story.