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Morning Market Report

JB Hi-FI shares were closely watched this morning following the announcement of a new CEO.

The market is up 12 points.

The Dow Jones was down 13 points to 16,502  — the market was range-bound for most of the session, ending down slightly after six straight positive days for the S&P and Nasdaq. Trading volume was a bit below average in a 50 point range.

US earnings were mixed  —  Boeing rose after net profit exceeded expectations but AT&T slid. Biotech shares declined after weaker than expected earnings from Amgen. Apple, the largest contributor to the S&P500, reported after the market closed with better than expected earnings and news it would buyback shares, increase its dividend and split its stock seven for one. Apple shares were up 7.48% in after-hours trade.

US economic data was weaker  —  new home sales fell 14.5% in March, the worst sales month since July and the Markit PMI was 55.4, down from 55.5 and below estimates of 56.0

European markets were weaker  — The UK FTSE was down 0.11%, the French CAC was down 0.74% and the German DAX was 0.58% weaker.

The Aussie dollar was weaker after better than expected inflation data yesterday and is currently trading at US92.86.

US bonds were stronger with the yield on the 10 year note falling two basis points to 2.705%.

Oil futures fell US$0.31 to US$101.44 a barrel after US inventories hit a record high.

Gold rose US$3.50 to US$1284.60 an ounce.

Iron ore fell US$0.30 to US$112.20 a tonne.

Base metals were mixed  —  nickel rose 0.30% but zinc fell 1.01% and aluminium fell 0.94%.

STORIES

  • An article in the AFR talks about the May budget and outlines items that are likely to be hit. The May budget will increase means testing, introduce co-payments for benefits and slash spending on key services’ to cut spending and return the budget to surplus in six years. They say it is shaping up to be the “harshest” budget since the Howard government’s 1996 spending cuts.
  • JB Hi-Fi (JBH 2064c) — Shares closed down 0.7% yesterday after boss Terry Smart said he will retire in August after being with the company for 14 years. He will be replaced by CFO Richard Murray. JBH also gave a trading update — Consolidated comparable sales growth for the March quarter was +3% and total consolidated sales growth for the March quarter was +5.7%. In the 2014 financial year  to date JBH has opened eight new stores, with two opened in the second half. Gross margins remain consistent with the first half.
  • G8 Education (GEM) — Has increased dividend by 28.5%.
  • Atlas Iron (AGO) — Achieved record shipments in the March quarter but has also been hit by weaker commodity prices. It sold 2.73 million tonnes of iron ore in the quarter, up from 2.7 million tonnes. Its average realised price fell to $US100 a tonne from $US120 in the previous quarter. March quarter production fell to 2.3 million tonnes. AGO moved 7.84 million tonnes in the nine months to date and says it is on track to hit the upper range of its financial year production guidance of between 10.2 million and 10.7 million tonnes shipped.
  • Resmed Limited (RMD 510c) — Third quarter earnings results. Reported a 6% increase net adjusted income to US$90 million which was 3% above consensus. Revenue of US$397.8 million was 2% below consensus. Third quarter 2014 sales increased 4% pcp. Third quarter 2014 diluted EPS increased 9% to US6.3cps (3% below consensus). The quarterly dividend of US2.5cps was in-line with the previous three quarters. Operating profit of US$104.7 million.

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