Market Update 10/30/2012

Australian stocks closed the day marginally higher as markets await the outcome of Hurricane Sandy in the US. The S&P/ASX 200 was up 8.8 points to 4485.7 and the All Ordinaries gained 6.3 to 4505.7. US stocks markets were closed today and will remain closed thru at least tomorrow. Most global markets are on pause waiting on the world’s largest economy to open back for business.

Commonwealth Bank held its annual meeting today. The stock closed up 52 cents to A$57.31 as investors expect profits to continue. National Australia Bank is due to report its earnings tomorrow. NAB shares were flat at A$25.88. ANZ finished at A$25.28 and Westpac closed at A$25.34.

Virgin Australia rose to 48.5 cents after announcing alliances with Singapore Airlines, Etihad and Air New Zealand. It sold a 10 percent stake to Singapore Airlines, bought 60 percent of Tiger Airways Australia and is looking to buy Skywest for A$99 million.

The Aussie and New Zealand dollars were stronger against most major peers. Both have been resilient in light of global growth concerns. The Aussie was last trading at 1.0375 to the USD and the kiwi at .8223 to the USD.

In the US traders are looking at significant damage from Hurricane Sandy. Areas to look at benefiting from the hurricane include roofing repair and waterproofing, utility services, rental car companies, insurance claim services and generators. A sector to avoid is insurance. Companies with significant exposure include Chubb, Traveler’s, Allstate, AIG, and Tower Group.

Most of the northeast US refineries were shut in due to the storm. There are concerns about demand destruction due to the storm. Crude will be stored as refiners can’t process the crude into gasoline and heating oil. Power outages affect natural gas usage; however, there are expectations of colder weather in the coming weeks.

Gold and silver continue to trade in a tight range. Silver has been trading $32 for the past several days and gold $1710. These are good areas for binary options traders to place their bets.

Hopefully, US markets will be open on Wednesday. However, expect lower volumes as many traders in the NY area will be dealing with the aftermath.

Stay posted for the latest updates as we continue to monitor the storm and present any trading ideas that we may see.