SG Market (04 Jul 14)

US Market: US shares surged higher, with the Dow and S&P500 setting new records in a holiday-shortened session on a suprising solid jobs report amid details of ECB’s stimulus plans. The US market will be closed for Independence Day on Fri. The DJIA rose 92 pts to 17,068 (+0.5%), topping 17,000 for the first time, while the S&P 500 advanced 11 pts to 1,985 (+0.6%) and the Nasdaq Composite added 28 pts to 4,486 (+0.6%). Volume was extremely light with 3.49b shares traded. The VIX or market volatility index dropped 4.7% to 10.32, its Feb ’07 low. In Europe, the ECB held its benchmark interest rates unchanged but unveiled details of a new €1tr targeted loan program for banks to lend to households and companies. Investors clearly welcomed the strong payrolls data which saw the US economy add 288,000 jobs in Jun, racing past the 215,000 estimate. This drove the unemployment rate down from 6.3% in May to 6.1%, its lowest level since Sep ’08, confirming expectations that the economy bounced back in the 2Q after a dismal start to the year. Meanwhile, weekly jobless claims ticked up 2,000 to 315,000, hovering near post-recession lows. In other economic news, the ISM non-manufacturing PMI dipped to 56 in Jun from a strong 56.3 advance the prior month, which tempered concerns of higher inflation and interest rates. Gains were broad-based across all sectors although utility stocks continued to underperform (-1.1%) as the positive jobs data suggest that the Fed could potentially raise interest rates earlier. The 10Y Treasury yield ticked up 2 bps to 2.65%. Among stocks in focus, Goldman Sachs (+1.5%) and MetLife (+2%) advanced, pacing gains among banks and insurance companies, while Caterpillar (+1.4%) and Freeport McMoran (+1.8%) also ranked among the best performers. S’pore shares are expected to head higher this morning in tune with the recording breaking run on Wall Street and broadly fimer openings in Tokyo (+0.7%) and Seoul (+0.1%). Near term resistance for the STI is tipped at 3,285/3,310 with underlying support at 3,220. Stocks to watch: *Vallianz: Signs 3-year collaboration deal with Offshore Oil Engineering Co, a unit of China National Offshore Oil Corp, to provide OSVs, including submersible launch vessels, for COOEC’s offshore oil and gas projects in China and Asia Pacific. *Global Yellow Pages: Deal to acquire Australia's Gloria Jean's Coffees for A$35.6m has fallen through as certain conditions were not met. Net proceeds for its recent 3-for-2 rights issue meant towards the proposed acquisition will be redployed to fund future acquisitions. *Unionmet: Entered MOU with Institute of Chemical and Engineering Services (ICES) to conduct R&D in oil blending business. The tie-up will see ICES will second research scientists and engineers to Unionmet, with Spring Spore subsidising up to 70% of the salaries and related costs. *Hiap Hoe: Launching its Marina Tower Melbourne on 5 Jul. The development, which is situated at a waterfront site in the Docklands region of Melbourne, comprises two residential towers and a seven-storey hotel. This will be Hiap Hoe’s first overseas integrated development.