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Morning Market Report

Markets are surprisingly buoyant, despite grim AGMs worldwide.

The market is up 20 points.

Dow Jones was down 54 points to 15,413.

The S&P was down eightto 1746.

Oil fell 1.17% to US$97.15.

The US$ rose against most major currencies but was weaker against the Yen. The Aussie dollar came off slightly and is now trading at US$0.9622.

VIX volatility index rose 0.68% to 13.42.

US treasuries rose slightly  —  the 10 year yield was down one basis point to 2.503%.

Gold fell US$10.10 to US$1332.50 per ounce on strong inventory data.

European shares were weaker, ending the recent run. The peripheral markets took the brunt of news the ECB is planning bank stress tests in November.

European bonds were mixed but UK, French and German yields fell (bonds prices rose).

Base metal prices were weaker  —  copper and nickel both down more than 2%.

US EARNINGS RESULTS

  • Caterpillar —  down 6.07%
  • Boeing  —  up 5.34%
  • AT&T  — down 0.3%
  • Akamai  — down 10.85 in after hours trading
  • Visa  — up 0.11% in after hours trading
  • E*TRADE  — down 3.11% in after hours trading
  • TripAdviser  — up 3.04% in after hours trading

STORIES

  • AGMs today  — BHP in the UK. Also Newcrest (NCM), Pacific Brands (PBG), Suncorp (SUN), Toll Holdings (TOL), Amcor (AMC) as well as SKE, APA and SGH.
  • Wesfarmers (WES) — First quarter sales figures lower than expected. Coles first quarter sales rose by 4.9% to $8.9 billion  up from $8.49 billion. The figures include food and liquor sales of $6.91 billion up 4.4%. First quarter Curragh Coal Output 2.83 million tonnes down 0.3%. First quarter share of Bengalla coal output was 888,000 tonnes. Total stores sales from home improvement business Bunnings rose more than 10% during the quarter to $2billion. Store-on-store sales grew 7.1%. Target continues to struggle, with sales down 6.1% from last year to $789 million.
  • Pacific Brands (PBG) — AGM — Preliminary indications of first half EBIT and NPAT may be materially down compared to the pcp, due to trading conditions, increased capital expenditure and a downturn in the workwear market. They say results will be dependent on second quarter 2014 trading which makes up for the majority of earnings.
  • Australian Pharmaceutical Industries (API) — Up 3.57% on results.
  • AMP Limited (AMP) has a trading update tomorrow. The share price has been creeping up into the announcement. Some traders are punting on a good number. We like the stock, it’s in the right industry long term, but don’t need to rush in (watch it fly now).
  • Wesfarmers (WES) has first quarter sales numbers this morning.
  • Kathmandu (KMD) — The CEO has been selling shares and they have been running a cut price sale for a while now. Rings a few alarm bells although they have more recently surprised the market to the upside with the opposite of a profit warning.
  • David Jones (DJS) and Myer (MYR) — Since the Paul Zahra resignation The Age has been pounding the line that the reason he left was not for personal reasons but the result of internal conflict. Whatever it was, the share prices of most retail stocks have been coming off since. The numbers on DJs now have a bit of a question mark over them which reflects on the rest of the sector, but the numbers on DJs are quite attractive as they are on Myer. You need a bit of faith in consumer confidence and the Myer strategy (five point plan) in the long term (because it hasn’t happened in the short term) but basically we have faith and are looking for a buying opportunity.
  • The Caterpillar results in the US reflect negatively on mining services generally.

Womens Agenda

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Smart Company

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StartupSmart

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Property Observer

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