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Morning Market Report

A shaky day on local markets following the announcement of a rise in the minimum wage.

The market is down 15 points.The Dow Jones was up 15 points at 16,738  — the market opened lower and was down as much as 32 points on weaker economic data before a better ISM number boosted sentiment. Consumer discretionary stocks led the market and the financials, materials and technology sectors were also stronger. Energy and industrials lagged. Volume was lower than average and the market traded in a narrow 46 point range.

US economic data was mixed  —  the ADP private employment report, often seen as an indicator for the official payrolls data, showed 179,000 jobs were added in the private sector, lower than the 200,000+ expected. The previous month was also revised down from 220,000 to 215,000. The productivity and trade balance were also worse than expected, but the ISM services index rose to a better-than-expected56.3.

Fed Beige Book  —  showed expansion in all 12 Fed districts.

European share markets were mostly weaker  —  The UK FTSE fell 0.38% and the French CAC fell 0.06% but the German DAX rose 0.07%. Markets were cautious ahead of tonight’s ECB meeting.

US treasuries fell for the fourth day, with the yield on the benchmark 10 year bond rising 7 basis points to 2.601% after stronger economic data.

The Aussie dollar was stronger and is currently trading at US92.77c.

Oil and gold were slightly weaker, both down 0.02%.

Base metals were weaker  — Copper fell 1.42%, nickel was down 0.26% and zinc, aluminium and lead were all down more than 0.60%.

Iron ore rose US$2.10 to US$94.60 a tonne.

Fed Speak: Minneapolis Fed President Narayana Kocherlakota will discuss “Low Real Interest Rates.”

STORIES

  • Noni B (NBL 56.5c) — Shares closed up 44.87% yesterday after being approached by several interested parties looking to either take a stake or make a complete takeover. The Kindl family, who own around 40% of the business, said they are considering the future of Noni B after earlier announcing they are xpect an annual loss of $1.8m-$2.2m. A few broker comments out this morning.
  • Amcom (AMM last traded at 222c) — Shares were placed in a trading halt yesterday pending an announcement on a proposed equity raising. Resumes trading on Friday. AMM is looking to raise $40 million at $2.05 which is a 7.7% discount from the pre-announcement price. The AFR this morning says the raising proceeds ‘have been ear-marked for an acquisition’. The capital raising is being done by Perth’s Euroz and comes a day after AMM held an investor presentation.
  • Challenger (CGF 681c) — Shares closed down 2.71% yesterday following an investor business update. CGF noted strong sales growth on the back of broadening products and their footprint. Total FUM increased 56% to $17.3 billion.
  • BHP Billiton (BHP 3616c) — Has cut 100 staff from the Perth headquarters of it iron ore division. More cuts are expected at the Mt Whaleback mine in the Pilbara following a slowing in China’s economy and a falling iron ore price. Iron ore fell 12.9% in May after a 9.8% drop in April.

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