The market is up 32. The SFE Futures were up 1 this morning.
Dow Jones down 50 — Very low volumes this month as the US is in holiday season — The Dow was down 87 at worst. The S&P 500 index fell 0.23% and the Nasdaq fell 0.40%. The S&P 500 has fallen in seven of the last eight sessions. The 10 year yield hit a record low in a flight to safety.
Retail sales figures were below expectations down 0.5% on the month against forecasts of +0.2%. It was the third consecutive monthly drop. Business inventories were ahead of expectations and the NY Empire manufacturing index was above expectations. The IMF lowered their 2013 global economic growth forecast to 3.9% from 4.1% on Europe’s ongoing debt problems and a slowing Chinese economy. Fed Chairman Bernanke’s testimony to Congress is tonight. The market is looking for any indication on the timing/existence of quantitative easing — the recent FOMC minutes suggested the FOMC could not agree on the conditions that would warrant its introduction. The FTSE 100 index closed down 0.07%, DAX up 0.13%, France -0.03%, Spain -1.99%. Oil also went up 1.4%. The German Constitutional Court Decision on the ratification of the ESM has been delayed until September. Metals were mixed on the LME with Lead up 0.99%, Zinc up 0.68%, Copper down 0.18% and Tin down 0.18%. Gold was down $3.00 to $1589.00.
- Fortescue Mining (FMG) has release its June Quarter results today. FMG revealed a 17.8mtpa production amount, which is a +42% increase from the previous quarter. They also stated that they are still on track for the 2012 annual amount of 60mtpa and plan the 155mtpa (2013 guidance) ramp up towards the end of the year. Net profit after tax came in at $789m, FMG is down 0.65% to 461c.
- There is talk in the AFR today that a broker was looking to sell a large stake of Telstra (TLS) shares last night for Kerry Stokes. Apparently the broker was contacting fund managers and other institutions to gauge an interest at 375c per share, 2% below yesterday’s closing price for TLS. It has triggered thoughts that Stokes may be selling his three year accumulation of TLS in order to fund his $440m Seven West Media (SWM) capital raising that was announced yesterday.
- Mining Tax architect Ken Henry asks — Was the mining tax worth it — “The obvious question I dare not ask is whether it was worth it…I dare not even think about the question…there is no way the public can understand what has been legislated.” And another Professor says “We should start again — you could hardly think of doing something worse but Gillard has championed it.”
- Nathan Tinkler’s $5.25m takeover of Whitehaven Coal (WHC) is yet to convince 16.7% of shareholders to invest in the unlisted vehicle, leaving him with around $900m of capital to raise. Tinkler’s offer already has provisional support from 48.3% of the register to take up unlisted stock said the AFR.
- If a major economic recession was to emerge Citigroup has advised that Westpac (WBC) and National Australia bank (NAB) would not be able to continue paying their dividends. The stress test that the four banks have undergone from Citi is a more severe case of GDP growth that of the GFC. Citi believe that WBC’s high payout ratio would leave them far too vulnerable in that situation and that NAB would have to raise fresh capital in order to maintain their dividends.
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