Posted on Thursday, January 24th, 2013 | In Exchange Traded Funds
A “less bad” January Eurozone Flash PMI report from Markit Economics gave European stocks a boost on Thursday.
The major European stock indices made solid gains on Thursday following a “less bad” Eurozone Flash PMI report from Markit Economics. Although the report indicated increases in PMI data for all categories to ten-month highs, they still remained slightly below 50, indicating contraction. The following is a breakdown of the four primary indices:
- Flash Eurozone PMI Composite Output Index at 48.2 (47.2 in December). Ten-month high.
- Flash Eurozone Services PMI Activity Index at 48.3 (47.8 in December). Ten-month high.
- Flash Eurozone Manufacturing PMI at 47.5 (46.1 in December). Ten-month high.
- Flash Eurozone Manufacturing PMI Output Index at 48.0 (46.0 in December). Ten-month high.
As of 11:22 EST, the Euro STOXX 50 Index climbed 0.47 percent to 2,721 – staying well above its 50-day moving average of 2,622. After breaking above its resistance level of 2,700 on Monday, the STOXX 50 is once again attempting a sustained advance above that level, which has been a barrier since the beginning of the new year. Its Relative Strength Index is 64.67 (NYSEARCA:FEZ). The FTSE 100 Index surged 1.08 percent to 6,263 (NYSEARCA:EWU). The German DAX Index advanced 0.49 percent to 7,744 (NYSEARCA:EWG). France’s CAC 40 Index climbed 0.63 percent to 3,749 (NYSEARCA:EWQ). Spain’s IBEX 35 Index rose 0.48 percent to 8,655 (NYSEARCA:EWP). Italy’s FTSE MIB Index jumped 0.93 percent to 17,743 (NYSEARCA:EWI).
As of 11:41 EST, the euro advanced 0.44 percent against the dollar, trading at $1.3376 (NYSEARCA:FXE). Dollar Rallies vs. Yen, Lower vs. Euro
Spain’s ten-year bond yield dropped to 5.01 percent on Thursday from Wednesday’s closing level of 5.07 percent. Spain’s two-year bond yield declined to 2.48 percent on Thursday from Wednesday’s closing level of 2.52 percent (NYSEARCA:EWP).
Italy’s ten-year bond yield declined to 4.19 percent on Thursday from Wednesday’s closing level of 4.22 percent (NYSEARCA:EWI).
On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced by 48 cents (0.43 percent) to $113.28/bbl. (NYSEARCA:BNO, NYSEARCA:USO).
February Gold futures declined by $14.00 (0.83 percent) to $1,672.70 per ounce (NYSEARCA:GLD).
In Japan, stocks advanced and the yen declined following China’s upbeat flash PMI report, suggesting a stronger demand for Japanese exports to China (NYSEARCA:FXY). The Nikkei 225 Stock Average jumped 1.28 percent to 10,620 (NYSEARCA:EWJ).
In China, stocks declined despite a positive Flash PMI report from HSBC and Markit Economics. Threats by North Korea to conduct more nuclear weapons testing put a chill on investor enthusiasm. January’s HSBC China manufacturing PMI rose for the fifth consecutive month to the highest level in two-years: 51.9. A reading above 50 indicates expansion. The Shanghai Composite declined 0.79 percent to 2,302 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index declined 0.15 percent to 23,598 (NYSEARCA:EWH). China Covets U.S. Coal
American stock index futures trading was mixed ahead of Thursday’s opening bell after the quarterly earnings report from Apple (NASDAQ:AAPL) resulted in a wave of lowered price targets from stock analysts, sending the Nasdaq future sinking. The March 13 Dow Jones Industrials future advanced 0.14 percent to 13,738 as of 9:13 EST. The March 13 S&P 500 future fell 0.13 percent to 1,488 (NYSEARCA:SPY). The March 13 Nasdaq 100 future sank 1.50 percent to 2,717.
Bottom line: Investors responded with enthusiasm as January Flash PMI reports for the Eurozone and China suggested continued recovery in for the global economy.
About John Nyaradi (http://www.wallstreetsectorselector.com)
John Nyaradi is Publisher of Wall Street Sector Selector: Your Home For ETF Investing! John writes a weekly guest column, John Nyaradi’s ETF Edge for MarketWatch.com and his investment articles have appeared in many online publications including Trading Markets, Money Show, Yahoo Finance, Investors Insight, Fidelity, ETF Daily News, iStock Analyst , among many others. His book, Super Sectors: How to Outsmart the Market Using Sector Rotation and ETFs, is published by John Wiley and Sons and included among the Years Top Investment Books in the 2011 Stock Trader’s Almanac.