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US Media Stocks – Dragged by Disney
The US 30 failed to hold on to their early gains as Disney and media-related names weighed heavily on the index in the US equity trading session. The Dow closed off a touch but could have been 74 points higher if not for the drag by Disney. Disney released quarterly numbers before trading and their ‘darkened’ outlook led to a 9.17% decline in the company’s shares by the close of trading session last night. A key factor for its gloomy outlook lies in the Cable TV bundling business. Media companies, especially those who rely heavily on cable subscribers are faced with an increasing rate of cancellations - or Pay TV cord-cutting - as consumers make their shift to the internet to satisfy their big ‘online appetite’ for home media entertainment. Time Warner and Viacom were dragged alongside with Disney last night, with both down 8.5% and 7.5% respectively.
Wilmar – Strong Figures in Q2
Wilmar may offer some cheers to the local stock markets as trading continues today before the long weekend. Overnight, Wilmar reported strong Q2 numbers with an 18% improvement in its profits, boosted in part by their oilseeds businesses including better soybean crushing margins. Pre-tax profit at the oilseeds and grains unit more than doubled to US$115.9 million in the quarter, from US$41.5 million a year earlier supported largely by higher crushed volume and strong performance in its consumer products businesses in China. The stock had been sold down together with the broader market over the past two months. From the chart below, the ‘doji’ (circled) from yesterday and along with the long lower shadow candle from the day before could set things off for a rebound today especially with the solid numbers reported last evening. Support for the stock remains at SGD3.14 and 3.08 with resistance at SGD3.21 and SGD3.23.
Aussie Dollar – Impacts from Key Data Releases
AUD/USD rebounded after the RBA meeting took a pause yesterday with an upward continuation a possibility today. The CMC Markets Next Generation pattern recognition software has picked out a completion of the Descending Wedge Bullish pattern with a breakout confirmation of the move. This could set the pair higher to test at the 0.76 resistance level - once a key support for this pair for most of this year. A break above Tuesday’s high of 0.7428 may set the pair higher with the indicated zone – picked up by the Pattern Recognition software – as a possible area for consolidation. Should the drive upwards fail to continue its momentum, we may see a pull back into the Descending Wedge. Any off course key drivers for any moves here may well come from this morning’s Australia key employment data at 9.30 am local time. If not, tomorrow’s US non-farm payroll will certainly take over the stage for possible action.
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