Morning traders. Thanks Trees. Market wrap: A soft start to the...

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    Morning traders. Thanks Trees.

    Market wrap:

    A soft start to the trading week appears likely after disappointing corporate earnings dragged Wall Street off record levels on Friday.

    The September SPI 200 futures contract eased eight points or almost 0.2% to 5522 as results from the likes of Amazon, Visa and Pandora Media missed expectations.

    The S&P 500 retreated ten points or 0.5% to close virtually unchanged for the week. The Dow, which counts Visa as a component, tumbled 123 points or 0.72% for a weekly loss of 0.8%, its heaviest weekly decline in six weeks. The Nasdaq gave up 22 points or 0.49% on the day but rose 0.4% for the week.

    “Today’s action is all earnings-related," Kate Warne, investment strategist at Edward Jones in the US, told MarketWatch. “At this point investors pay attention to guidance from companies, and the lowering of the outlook from Visa signalled that perhaps the second half is not going to be as strong as previously thought."
      
    Shares in Visa slid 3.58% after the company pared its earnings expectations for the year. Amazon dived 9.65% after announcing a larger loss than analysts expected last quarter. Internet radio company Pandora fell 10.34% after also announcing an increased loss.

    Orders for durable goods increased by 0.7% last month, but the rise was not enough to alleviate concerns that big business remains reluctant to invest at present. “Durable goods orders continue to be anemic relative to where they should be in the capex cycle,” Lincoln Ellis, managing director at Green Square Capital Management in the US, told Bloomberg. “CEOs in America are very cautious about reinvesting in capital expenditures because they understand the underlying economy continues to be lacklustre.”
    Eight out of ten industry sectors declined, led by consumer discretionary and financial stocks. The Russell 2000 index of small caps sagged 1%.

    Gold stocks saw healthy gains as the metal rebounded from a five-week low. The NYSE Arca Gold Bugs Index jumped 2.68% after gold for August delivery advanced $12.50 or 1% to settle at US$1,303.30 an ounce. The contract extended gains to finish the week at US$1,308.50.

    BHP lost 0.14% and Rio Tinto 0.31% in US trade despite a modest improvement in iron ore on Friday. Spot ore for import to China rallied 70 cents to US$94.30 a dry tonne.

    News that Indonesia may dilute a ban on copper exports drove the metal lower. Freeport-McMoRan announced on Friday that it has signed a memorandum of understanding with the Indonesian government and expects to resume exports as soon as next month, following a six-month halt. US copper for September delivery dropped 0.6% or around two cents to US$3.25 a pound. In London, copper lost 0.7% and aluminium 1.3%. Lead rose 1.3%, zinc 0.1%, nickel 0.2% and tin 0.4%.

    Oil finished little changed on Friday as traders waited for signs that tougher sanctions against Russia will affect energy exports. West Texas Intermediate crude oil for September delivery edged up two cents to settle at US$102.09 a barrel, but ended the session 18 cents down at US$101.89.
    European stocks retreated following news of a third straight decline in German business sentiment as sanctions against Russia affect companies doing business there. The Ifo business-climate survey dropped to 108 this month from 109.7 in June. The Stoxx Europe 600 index slid 0.69% as Germany's DAX dived 1.53%, France's CAC 1.81% and Britain's FTSE 0.43%.
    The dollar was this morning buying 93.96 US cents.

    TRADING THEMES THIS WEEK

    DELUGE OF US DATA: A week of big-ticket US economic data ends with a bang, including second-quarter GDP, a Federal Reserve interest rate decision and monthly jobs data over three nights from Wednesday. Add manufacturing, house sales, car sales and consumer confidence and US economic data looks likely to dominate the week, despite a steady stream of corporate earnings. Earnings will be busy again this week, but a broadly positive pattern has been established, so individual results are likely to have less impact on overall market sentiment. This week's economic highlights include: pending home sales, flash services PMI (tonight); consumer confidence (tomorrow night); advance GDP, Federal Funds Rate and policy statement (Wed); weekly jobless claims, Chicago PMI (Thu); and non-farm employment change, unemployment rate, personal spending and income, final manufacturing PMI and vehicle sales.
    CHINESE FACTORY UPDATE: Friday brings what traders will hope is the latest signal that manufacturing activity in our biggest trading partner is continuing to improve. The official government PMI is tipped to rise to 51.4 from a reading of 50 last month. The final version of HSBC's private gauge, released the same day, is expected to hold at 52.

    UKRAINE/RUSSIA STAND-OFF: Pressure continued over the weekend for tougher sanctions against Russia following the downing of MH17 over Ukranian soil held by pro-Russian separatists earlier this month. European governments have been reluctant to take punitive action against Russia because of the continent's dependency on Russian energy supplies. Former US Secretary of State Hillary Clinton called on European governments over the weekend to take increased measures against Vladimir Putin's government. German Vice-Chancellor Sigmar **riel demanded sanctions against Russian oil companies. Any new limits on Russian energy exports would likely increase the price of oil, a broad negative for global equities.

    ECONOMIC NEWS: The domestic calendar has a slow start but picks up towards the end of the week. Highlights include: new home sales (tomorrow); building approvals, import prices, private sector credit (Thu); and producer price index and AIG Manufacturing Index (Fri).

    Good luck to all.
 
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