Morning Market Report

Nov 30, 2012

The market is up 29. SFE Futures were up 23 this morning. Dow Jones was up 37. The Dow was up 77 at best and down 23 at worst in another volatile session. The Dow closed above 13,000 for the first time in three weeks with further talks surrounding the US "fiscal cliff". Republican House Speaker John Boehner warned that President Obama had to "get serious" about the fiscal negotiations and that there had been no substantial progress in the discussions in the past few weeks. US Initial Jobless Claims were 393,000 which was slightly worse than the forecast of 390,000 but better than the previous reading of 416,000. Continuing Jobless Claims were 328,700 which beat the forecast of 332,300. Gold, Oil up and US bond yields down. Best US sectors -- Telecoms (+0.9%), Health Care (+0.6%) and Basic Materials (+0.6%). The US 2 year bond yield down 1bpt to 0.258% and the US 10 year yield down 2bpts to 1.62%.  Spanish 10 year bond yield up 1.1bpts to 5.33%. Greek 10 year bond yield down 7.8bots to 16.31%. Italian 10 year bond yield down 3.1bpts to 4.56%. European markets mixed -- UK FTSE up 1.15%, German DAX up 0.78%, France up 1.53%, Spain up 1.74%, Italy up 2.81% and Greece down 0.80%. The Stoxx Europe 600 index up 1.2% Telecoms (+1.8%), Financials (+1.8%), Basic Materials (+1.7%) and Utilities (+1.6%) sectors.
  • Metcash (MTS) -- 1st Half 2013 result -- Underlying profit was $121.3 million broadly in line with a consensus forecast of $124 million. The company posted a 1st H13 profit of $82 million down 13.1%. MTS is down 2.14% to 343c.
  • Rio Tinto up 4.43% in London on the back of their announcement yesterday that they will reduce costs by US$5 billion over 2013.
  • Lynas Corp (LYC) -- Has commenced operations at their Malaysian plant only a few weeks after the High Court dismissed the latest application from activists calling for an injunction on their temporary license. LYC is up 2.22% to 69c.
  • Rio Tinto (RIO) -- Announced yesterday that they will cut $5 billion in costs from their mining operations to offset weaker commodity prices and a strong Aussie dollar. The company also said they will find savings in all parts of the business by the end of 2014 and return more cash to shareholders rather than spending on new mines. RIO plans to cut the cost of exporting iron ore to China from $US47 to $US35 a tonne. RIO is up 3.29% to 188c.
  • BHP Billiton (BHP) -- Chairman Jac Nassar says at the AGM says there is a group of strong candidates picked to replace CEO Marius Kloppers who has been in the top job for more than 5 years. Sources say the top two candidates that stand out in the group are – Andrew McKenzie (non-ferrous group executive) and Marcus Randolph (coal group executive). BHP is up 0.91% to 3452c.
  • Primary Healthcare (PRY) -- AGM -- Remains on track to lift earnings by up to 25% in 2013. EBIT expected to rise to between $370-380m. PRY down 0.4% to 399c.
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