Today's Morning Report

U.S. Overnight Market Commentary 

U.S. stocks rose overnight, pushing the Standard & Poor’s 500 Index up 1.1% after it swung between gains and losses at least 13 times, as a rally in oil and metal markets boosted commodity producers. Gold retreated after reaching a record high. The S&P 500 climbed 11.53 points to 1,062, recovering less than a quarter of the slump through yesterday that was the biggest two-day retreat since March 2009. Crude oil futures advanced 1.5% to US$72.53 a barrel in electronic trading at 5 p.m. in New York, while copper, aluminium and nickel rallied in London. The euro rose 0.4% to US$1.1973 amid speculation the Swiss National Bank sold the franc. Equities rose after Federal Reserve Chairman Ben S. Bernanke said the economic recovery is intact and a private report showed confidence among U.S. small businesses rose to the highest level since September 2008. Gains in commodities prices helped the S&P 500 overcome losses by semiconductor companies and declines in European stocks after Fitch Ratings said the U.K.’s deficit challenge is “formidable.” “You have a very significant struggle going on in the markets between the bull camp, which believes that the recovery cycle and the market is cheap or undervalued, and the bear camp, which believes that the message of the market is that the cycle will not hold,” said Hugh Johnson, who oversees US$1.85 billion as chairman of Albany, New York-based Johnson Illington. “That debate played out in the markets today the bulls had the upper hand, but there’s no telling what tomorrow will bring.” The S&P 500 closed within 0.1% of its highest level of the day. Trading volume on U.S. exchanges totalled 11.5 billion shares, the most since May 26 and 20% higher than the 2010 average, according to data compiled by Bloomberg. More shares changed hands than on June 4, when a report showing private employers added 77% fewer jobs in the U.S. than the median economist estimate sent the S&P 500 down 3.4%. Oil’s gain sent the S&P 500 Energy Index to a 1.9% rally. Exxon Mobil Corp. rallied 3.3% to US$61.24 and ConocoPhillips advanced 2.5% to US$50.84. The industry stock gauge rose even as Chevron Corp. fell 0.5% to US$71.02 and Transocean Ltd. tumbled 5.8% to US$46.33 after Goldman Sachs Group Inc. cut its rating to “neutral.”

 

Europe’s Overnight Market Commentary

European shares fell on Tuesday, hitting a near two-week closing low, with investors jittery after Fitch Ratings said the UK faced a "formidable" fiscal challenge and BP sinking on fresh oil spill worries. The pan-European FTSEurofirst 300 index of top shares closed down 1% at 980.35 points, falling for the third consecutive session and down around 11.9% from a mid-April peak on concerns about the euro zone debt crisis. BP fell 5%, representing a market-cap wipe out of about £4 billion (us$5.8 billion) for the company, after U.S. President Barack Obama said he wanted to know "whose ass to kick" over the Gulf of Mexico oil spill. Other energy companies were under pressure. Royal Dutch Shell, Total and Cairn Energy slipped 0.4% to 0.8%. "Markets remain under pressure," said Peter Dixon, economist at Commerzbank. "Until we see any indications that uncertainty has lifted, the prospects of any decent rally in the European markets appears distant." Investors were also nervous after ratings agency Fitch said Britain faced a "formidable" challenge to cut government borrowing and needs more ambitious plans to reduce the deficit over the medium term. Meanwhile, the European Union said it would press ahead with its own banking levy after the world's top economies failed to agree on taxing an industry seen as a main culprit behind the global economic meltdown. Banks featured among the worst performers, falling for the third day. BNP Paribas, UBS, LLoyds Banking Group and Barclays slipped 2.2% to 4.1%. Utility stocks E.ON and RWE fell 3.6% and 2.9%, respectively, after the German government said it planned to introduce a new tax on operators of nuclear power stations.

---

Hanuman Investments Pty Limited trading as Hanuman Private Wealth - AFSL No. 313416

Please consider the environment before printing this document.

NOTICE TO RECIPIENTS: The information contained in and accompanying this communication may be confidential, subject to legal privilege, or otherwise protected from disclosure, and is intended solely for the use of the intended recipient(s). If you are not the intended recipient of this communication, please delete and destroy all copies in your possession, notify the sender that you have received this communication in error, and note that any review or dissemination of, or the taking of any action in reliance on, this communication is expressly prohibited. E-mail messages may contain computer viruses or other defects, may not be accurately replicated on other systems, or may be intercepted, deleted or interfered with without the knowledge of the sender or the intended recipient. To the extent permitted by law Hanuman Private Wealth makes no warranties, and expressly disclaims any liability, in relation to the contents of this message. Hanuman Private Wealth reserves the right to intercept and monitor the content of e-mail messages to and from its systems.