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Morning Market Report

Markets are down slightly, as are retail and employment figures.

The market is down 25 points. Dow Jones was down 26. It was up 19 at best and down 43 at worst.

S&P 500 was down six to 1683 breaking a run of seven gains.

Weekly jobless numbers came in better than expected  — the jobless print came in below 300,000 for the first time since May 2007, bonds fell — the labor department later hinted that the numbers may be misleading as two states had upgraded their computer systems and that the number did not represent a change in labor market conditions.

The debt ceiling negotiations began to come into focus with comments from the House Speaker Boehner that spending reforms were needed before lifting the ceiling and other comments from the Senate Majority Leader that Republican attitudes are going to lead to a government shutdown.

Gold down $33 as the prospect of military action in Syria fades. The gold sector fell 5.6%.

US Bonds unchanged  — The US 10 year bond yield at 2.911%. The housing recovery took another hit from the announcement from US Bank that its mortgage revenue had dropped 20%.

FOMC Meeting next week —  it is a two day meeting — the statement will be out Thursday morning our time. It is expected to implement a token reduction in quantitative easing of maybe $5-10 billion to $75-80 billion of asset purchases a month instead of the current $85 billion.

Bank of England comments suggested it is prepared to ease rates even further if required.

The A$ dropped on the employment numbers yesterday which saw a fall in job numbers rather than the expected rise increasing the chances of an interest rate cut on Cup Day in November.

BHP was down 1.06% in the US overnight. The stock closed in the US down 42c on the close here yesterday. RIO was down 1.37% in the US.

Iron ore price up 10c to $135.10.

European markets mixed without any major moves.

Metals mixed copper and nickel down, zinc and aluminium up.

 STORIES

  • Twitter has tweeted that it has submitted papers for an IPO.
  • Dick Smith is looking to IPO before the year end. Private equity firm Anchorage bought it from Woolworths for $20 million + $74 million and they want to sell it back for $500-600 million. They have closed 80 loss-making stores and refurbished 75% of the other 323 stores. WOW took a $420 million write-down on the business.
  • Dell shareholders look likely to approve a $26.7 billion deal for the founder Michael Dell to take the company private.
  • Gold down $33 as the prospect of military action in Syria fades. The gold sector in the US fell 5.6%. Technically it broke through its 100-day moving average at $US1355 an ounce and its 50-day moving average at $US1335.
  • RBC Capital Markets say iron ore market dynamics remain supportive.
  • Greece’s jobless rate hit a record high of 27.9% in June.
  • Labor holds its first post-election caucus meeting today with the party leadership on the agenda.
  • Caltex Australia has issued an expression of interest last month for United Petroleum, Australia’s largest independent fuel supplier and retailer. United Petroleum is valued at up to $1 billion.
  • Myer (MYR) — The rather “gloomy” outlook for the Myer business is getting front page coverage after Bernie Brooke’s comments post rather flat results yesterday. It has seen profit fall for four years with the promise of a profit rise in 2015.
  • Crown (CWN) — Sri Lanka has approved two investments worth around US$1.08 billion in foreign-funded casinos in the capital Colombo, including Crown’s $350 million+ project. The country is looking at high-end casinos to attract high-rollers and increase tourism to 2.5 million by 2016. Asian high-rollers particularly Chinese high rollers are the target.
  • Cochlear’s Annual Report is out today.

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