31/08/10 - 09:00
Ben Potter, Research Analyst
Overnight Market Report - 9.00am
On Wall St overnight, US markets gave up most of the points gained during Friday’s session as stronger-than-expected consumer spending data did little to overshadow a weaker-than-expected rise in personal incomes and the first drop in disposable income since January. The slower personal income growth saw participants focus on the prospects of a double dip recession.
For the session, the technology laden NASDAQ was the worst performer, down 1.6% while the S&P 500 fell 1.5% and the Dow Jones Industrial Average finished the day 1.4% in the red.
Domestically, the ASX 200 is called to open 1.2% weaker at 4401 after the disappointing night in the US. With London closed for a bank holiday, there will be little in the way of base metal or material leads.
The financial and consumer discretionary sectors are likely to lead the domestic market lower this morning after their US counterparts were the worst performers overnight, losing 2.1% and 1.8% respectively. Concerns over the weaker personal incomes data had participants worried as to the sustainability of the strong consumer spending figure.
Materials, energy and industrial names are all likely to weigh significantly after the corresponding sectors were down more than 1.5% overnight. With London closed, the only read we have for the materials sector is BHP Billiton’s ADR, which is calling the local stock 1.5% lower at the open.
A fall of 1.4% in Crude Oil futures is likely to drag on the energy names.
In Summary, it looks like most of yesterday’s good work will be undone this morning. However, stronger-than-expected important economic readings on building approvals and retail sales, due at 11.30am, could help the local market outperform US leads.
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