Portfolio

US midday: Intel weighs, but banks advance

Date: Friday 07 Sep 2012

US midday: Intel weighs, but banks advance

-Credit Suisse ups S and P 500 target to 1,500 from 1,425
-Intel warns, takes down Nasdaq
-Google again atop $700 per share
-Employment data moves Fed closer to QE3

Dow Jones: -0.04%
Nasdaq Comp.: -0.01%
S&P 500: 0.31%

New York equities are now trading in a mixed fashion, weighed down by a profit-warning out of predominantly PC chip-maker Intel and after a weaker than forecast monthly employment report.

The latter has led to increased market chatter and speculation regarding the possibility of further Fed action –QE3 that is- to fend off downside-risks to the economy. Commentators seem a bit wary of forecasting another round of QE3 for the Fed's next meeting however; although today's data is thought to have moved it closer.

Linked to the above, we are seeing a large 1.03% fall in the Dollar index and big rise in some metals’ prices, such as copper futures, which are moving 3% higher at the moment.

Intel breaks below technical support



Intel has warned of lower demand from corporate clients and lesser than expected sales in emerging markets. Nevertheless, there is quite a bit of commentary in the marker at the moment regarding the worsening long-term outlook for the PC industry versus tablets.

Shares of Google on the other hand are again atop the $700 per share barrier, for the first time since 2007.

From a sector stand-point the best performers now on Wall Street are companies from the following sectors: coal (8.78%), non-ferrous metals (7.81%) and platinum (6.24%). Semiconductor related shares are the worst performing ones.

Kraft is off by 5% after providing guidance for its grocery business.

Green Mountain Coffee Roasters is shooting higher by 12% despite the impending expiry of two patents.

Worth pointing out, the KBW Bank index is fast approaching technical resistance at the 50 point mark.

People still leaving the work force



Non-farm payrolls rose by 96,000 in August (Consensus: 125,000).

The unemployment rate fell by two tenths of a percentage point as the labour force shrank in size.

10 year US Treasuries drop



Front month West Texas crude futures are now rising by 0.55% to the $96.06 mark on NYMEX.

10 year US Treasuries are now falling by 11/32 dollars, with yields at 1.64%.


AB

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