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Morning Market Report

The market is up 7. SFE Futures were up 8 this morning.

Dow Jones closed up 17. The Dow was up 25 at best and down 31 at worst. US markets were steady on Friday ahead of earnings results due out of the financials sector this week. Last week the Dow Jones finished up 0.25%, S&P500 up 1.19% and the NASDAQ up 2.36%. The US Trade deficit was up from US$42.06 billion to US$48.73 billion in November, missing the forecast of US$41.3 billion. The Federal budget deficit narrowed from US$172.1 billion to US$0.26 billion in December — the smallest December deficit in five years. China’s CPI was +2.5% in the 12 months to December, up from 2.0% in November. The figure softened expectations for future stimulus and China’s Shanghai Composite finished down 1.8% on Friday. The US Materials sectors lagged on the underperformance of miners and steelmakers following the higher than expected Chinese inflation data. BHP and RIO were both downgraded to ‘Neutral’ from ‘Outperform’ by Macquarie. The stocks finished down 2.6% and 2.9% in the US. Metals mixed — copper down 0.39%, nickel up 1.04%, aluminium down 0.81%, lead down 1.22%. Best sectors — consumer staples, info technology, energy, utilities.  Worst sectors  — industrials, financials, materials, healthcare.

  • The TD Securities/Melbourne Institute inflation gauge rose 0.4% in December after prices fell 0.1% in November. In the year to December the gauge rose 2.4% within the RBA’s target band for inflation between 2%-3%.
  • ANZ job advertisements fell by 3.8% in December after a 2.8% fall in November. Job advertisements fell for the tenth straight month.
  • The number of home loans approved in November fell 0.5% to 46,199. Economists were expecting housing finance commitments to rise 0.5% in November.
  • Macmahon Holdings (MAH) — Sembawang Engineers and Constructors have walked away from their proposal to acquire Macmahon’s construction business. The company said it would not make any further takeover offers and claim Macmahon had killed their latest offer by failing to respond to a Friday deadline. Macmahon says it did not respond to Sembawang’s deadline because the offer was unsolicited, non-binding , incomplete and highly conditional. MAH is down 0.96% to 25.75c.
  • BlueScope Steel (BSL) — Has announced restructure plans and will look to cut output at their Western Port steel-processing plant Victoria which will result in 170 job losses. The restructure would cost around $17 million and the reduced output would be achieved by mid-March. BSL says there would be little or no impact to supply deals with domestic customers as a result of the changes. BSL is down 0.14% to 369.5c.
  • Iron Ore – Fell 2% last Friday to $US154.90 a tonne after reaching a 15 month high of $US158.80 last week. Analysts say the rise in iron ore will be short lived as Chinese steel makers increased inventories amid bad weather conditions.

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