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Morning Market Report

A number of local companies are rushing to float before the end of the calendar year.

The market is down eight points. The Dow Jones closed down 94 at 15,915. The market fell early following weak European markets and was down as much as 149 before trading higher towards the close in a 145 point range.

There was no major economic data and general comment was that investors wanted to protect the all-time highs achieved as we head into the year’s end.

The S&P was down six points to 1,795.

Oil was up 2.88% at US$96.70

Gold rose US$1.30 to US$1223.20 per ounce.

The US$ was weaker against most major currencies. The Aussie dollar was stronger and is currently trading at US$0.9137.

VIX volatility index rose 2.25% to 14.55.

US treasury markets were stronger —  the yield on the 10 year bond fell one basis point to 2.784%.

European shares were sharply weaker  — led by the French CAC down 2.65% and German DAX down 1.90%. The UK FTSE fell 0.95%.

European bonds were stronger, with the yield on the Euro 10 year bond falling two basis points to 1.723%. The UK 10 year bond yield fell three basis points.

Base metal prices were weaker —  nickel fell 0.43%, copper fell 0.27%, aluminium fell 0.16% and lead fell 0.11%.

Iron ore rose rose US$1.40 to US$138.20 a tonne.

STORIES

  •  Atlas Iron (AGO) —  Up 3.6% in early trade. They have announced the completion of a number of new sales contracts for their Pilbara Direct Shipping Iron Ore.
  • Westfield (WDC) & Westfield Retail Trust (WRT) — Are to merge to form a new entity called Scentre Group. The international business of WDC will become Westfield Corp. Both entities will be listed on the ASX.
  • GDP released for September quarter  — The consensus is for an increase of 0.8% (from 0.6% in the June quarter), giving a rise of 2.5% over the year. The were some revisions overnight (was 0.7% expected) due to stronger than expected net exports yesterday which will contribute 0.7% to September quarter growth.
  • Other data includes the AiG/CBA Performance of Services Index (PSI) for November.
  • Dick Smith lists today  — CEO Nick Abboud is hoping the excess demand during the IPO will translate into a strong debut. Dick Smith raised $345 million at $2.20 a share. Anchorage Capital Partners paid $94 million for the business around 12 months ago.
  • Boral (BLD) CEO is speaking at an American Chamber of Commerce in Australia event in Sydney.
  • News Corp (NWS) CEO addressing the Melbourne Press Club lunch.
  • AGMs today  — TPG Telecom (TPM) as well as Santos (STO) Investor Day.
  • Iron Ore  — rose another 1%, or US$1.40, to US$138.20 reaching a three month high.
  • Whitehaven Coal (WHC) — Closed up 6.48% yesterday after announcing they had received approval to refinance their existing $1.2 billion debt facility relating to funding for the construction of the Maules Creek project, which has experienced delays. The amended covenant pushes out the date for the first interest coverage debt ratio to December 2015 from December 2014, in line with the adjusted production schedule. There are also rumours doing the rounds saying Glencore Xstrata has expressed interest in a possible joint venture. Wesfarmers and New Hope Coal are also keeping a closed eye. Macquarie have an Outperform recommendation this morning, with a target price of 300c. The deferral is expected to alleviate the concerns around the ability to meet the covenants. They expect coal production at Maules Creek to start in the first half of 2015.
  • IPO Schedule  —  Dick Smith today. Nine Entertainment on Friday. ASIC has warned companies that are about to IPO not to mislead investors after finding problems with nearly a third of float prospectuses.

Womens Agenda

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Smart Company

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StartupSmart

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Property Observer

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