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Morning Market Report

The market is up 10. 55 stocks in the All Ords hit 52 week highs yesterday including all the major banks, Telstra, WES, WOW and MYR. The market is up 22.7% from the low on June 4. The recent strength is seen as a reflection of the weight of money finally coming out of bonds and into equities with the comment that it is not being matched by a rise in earnings which means equities are simply becoming more expensive.

SFE Futures were down 2 this morning. The Dow was up 88 at best and down 2 at worst. 67% of the 175 S&P 500 companies that have released quarterly results have beaten consensus forecasts. The S&P500 is on track for its best monthly gain since October 2011 and its best January since 1997.

US S&P/Case & Shiller 20 City home prices were up 5.52% ahead of forecasts of 5.2%. On the flip side the US Conference Board consumer confidence reading dropped to a 14-month low with Fiscal Cliff negotiations and tax increases have been blamed for the drop.

Best sectors  — Energy, Telecoms, Health Care. Worst sectors  — Consumer Discretionary, Technology.

European markets mixed  — UK FTSE up 0.71%, German DAX up 0.20%, France up 0.13%, Spain down 0.34%, Italy down 0.03%.

Royal Bank of Scotland down 5.98% after a report showed that the lender was nearing a $785 million settlement with US and UK authorities over claims of submitting false Libor rates.

The Euro hit a 14-month high. Spanish 10 year bond yield down 9bpts to 5.16%. Spot iron ore was unchanged at $148.40. Gold up $9.50 to $1662.40. Oil up $1.03 to $97.47.

ANNOUNCEMENTS

  • Wesfarmers (WES) — 2Q13 Sales up 5% at $7.71 slightly weaker than forecast. Coal production forecast was cut after floods. WES is down 1.35% to 3830c.
  • Westpac (WBC) — Launches $500 million Hybrid Issue — Distribution rate swap plus 3.2%-3.4%. WBC is down 0.04% to 2821c.
  • Insurance fears overdone - QBE, SUN bouncing. Floods are receding already and Were’s have a comment in their daily that “Cyclone Oswald to have limited impact on equities”. QBE up 3.63%, SUN up 1.12%, IAG is up 1.32%.
  • Lynas Corp (LYC) - Court challenge dismissed. LYC is up 4.26% to 67c.
  • Evolution Mining (EVN) — Quarterly production result. Maintains 3Q guidance. EVN is up 1.75% to 161.25c.
  • Western Areas (WSA) — New offtake agreement - To sell Jinchuan up to 26,000 tonnes of nickel over 2 years. WSA is down 0.34% to 435.5c.
  • Beadell Resources (BDR) — Gold production update. BDR is up 5.85% to 99.5c.
  • Ceramic Fuel Cells (CFU) — - Agreement signed with Energy Services Company - iPower. CFU is up 7.41% to 5.8c.
  • Quarterly Production numbers  — AKM, ALK, AOH, COE, EQX, PIR, RFE, RXM, SLR, SPL, TGZ.

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