The market is down 5 having been down 29 early on. SFE Futures were up 24 this morning. A lot of ex dividends today including BHP.
US market up 90. The Dow was up 151 at best with all US markets up. Global markets were mostly up after the Fed Chairman Ben Bernanke’s Speech at the Jackson Hole conference on Friday. There were no real surprises in the speech but given the reaction — gold, silver and oil up, US$ down, US bond yields down — the markets have interpreted it as meaning QE3 is now more likely.
The Chinese purchasing manager’s index (PMI) number came in a little lower than expected at 49.2 down from 50.1 in August (9 month low) and against a consensus of 50. This further supports the trend of a Chinese economy struggling against global head winds. After already cutting interest rates in June and July, the PBOC (Chinese central bank) has been injecting cash into money markets to ease credit conditions after a sixth straight quarter of slow-downs in April-June. The spot iron ore price is up 70c to $89.40 per tonne.
Metals mixed — Copper was down 1.84%, Nickel up 3.19%, Aluminium down 0.48% and Zinc down 1.07%.
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- Retail sales figures fell 0.8% to $21.42bn in August. Analysts were expecting a 0.2% rise.
- The TD Securities-Melbourne Institute inflation gauge rose 0.6% in August, the biggest month-on-month increase since March 2011. The inflation gauge rose 2.2% in the year to August which is within RBA’s 2%-3% target range.
- The AIG/PWC Australian performance of manufacturing index came in at 43.1 in August and manufacturing employment at 41.2. The index shows manufacturing production and employment improved in the month although both in the red.
- RP Data says house prices across capital cities were unchanged in August. The result follows an unrevised gain of 0.6% in July.
- Company Gross operating profits fell 0.7% in the June quarter missing expectations of a 1% rise. Business inventories rose 0.6%, economists were expecting inventories to have risen by 0.2% in the June quarter.
- Commonwealth Bank (CBA) — Will launch a $750m PERLS VI hybrid note today. The note will pay quarterly floating rate distributions. PERLS VI have an initial face value of $100. CBA is down 0.55% to 5443c
- Mining services — Companies in the mining services industry face at least another quarter of uncertainty as big miners cancel large expansion plans due to falling commodity prices. Shares in Boart Longyear (BLY) tumbled 41% last week after they downgraded guidance and warned of tough times ahead.
- Atlas Iron (AGO) — An article in the AFR gives an optimistic view on Atlas despite falling iron ore prices. The article says the company will still be generating a decent gross profit, even if spot iron ore prices were to remain at current levels. Atlas’ cost to produce iron is US$60 a tonne. AGO is down 1.85% to 132.5c.
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