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Pivotfarm Daily News Harvest June 3rd 2010

·         Wall Street leads bourses to gains led by yesterdays stronger than expected US auto and home sales data.

·         European Equities up. FTSE 100 1.68%. CAC 40 2.14%.

·         Nikkei up 3.24% making new 2 week highs. Naoto Kan, Japan’s finance minister, is likely to become the new Prime Minister.

·         Yen continues to weaken against currencies across the board. The USD/JPY is making weekly highs.

·         EUR/USD heading lower towards its 4 year low on the back of a decline in Eurozone retail sales.

·         Oil is trading 0.71% higher at $73.38, while Gold is down 0.39% at $1217.8

·         The ADP employment report results shows that private sector jobs increased by 55000 in May.

·         Weekly jobless claims falls 10000 to 453000.

·         US equity futures are up less than 0.5% before the open suggesting a small rise at the bell.

The UK’s Financial Services Authority (NYSEARCA:FSA) has fined JP Morgan Securities Ltd $49M for failing to protect clients money. Under FSA regulations clients money must be kept separate from the firms money to protect clients from insolvency. JP Morgan broke these rules between November 2002 and July 2009 after the merger of JP Morgan and Chase.

BP has admitted that it was not prepared for the deep water oil spill. They accept that they did not have the equipment needed to deal with the situation. BP’s debt rating was downgraded to AA from AA+ by Fitch, with speculation that the debt rating could fall further. BP may have to sell some of its most prized assets, it is claimed that they may have to sell their 26% stake in the US’s largest oil field to fund payments relating to the Gulf of Mexico oil spill.

Xstrata has stopped investments at two of its Australian mining projects in response to the Governments proposed super tax. It is said that these cuts in spending could be worth A$586M. This reduction in Australian investment could cost the economy 3250 new jobs.

Obama pledges to overhaul Energy Policy and put a stop to oil company tax breaks. Proposed new climate policy will alleviate the US’s dependence on fossil fuels and move towards a cleaner renewable source of energy. The President called on Congress to roll back billions of dollars of tax breaks that are given to the oil industry.

Coming Up Today

1000ET – Factory Orders

Previous                               1.3%

Consensus                          1.8%

Consensus Range            1.5% - 3.5%

March factory orders rose by 1.3% and the trend is expected to continue. The previous result showed non-durable goods up 2.9% and durables down 0.6%. Durables are expected to post a good result today, suggesting a strong figure. A figure above 1.8% will show a recovery in the US economy and will be bullish for the markets and the USD.

1000ET – ISM Non-Manufacturing Index

Previous                               55.4

Consensus                          55.9

Consensus Range            54.2 – 56.0

The result of 55.4 for April was level with the previous month.  A continuation in the rising trend is expected in Mays results with a small rise in the figure to 55.9. This increasing trend shows the health of the economy increasing with April’s results showing good strength in new orders and supplier deliveries. A strong figure today with put bullish pressure on the US equity markets and should bode well for the dollar.

1030ET – Natural Gas Report

The weekly report by the Energy Information Administration provides data on US natural gas stocks. A report showing a drop in natural gas stocks may signal increasing demand in the economy and see an increase in the price of the commodity.

1100ET – Petroleum Status Report

The weekly report by the Energy Information Administration provides data on US petroleum stocks. A reduction in stocks will show an increase in the demand for petroleum and may be taken as an indicator of an increase in spending. A low figure may put bullish pressure on oil prices and oil companies.

Disclosure: no positions