The market is up 13. Our Futures were up 16 this morning. Dow Jones finished down 27 on below average volumes. The Dow was down 65 at worst.

Better than expected economic data was outweighed by an article in The WSJ that stated that the Federal Reserve had started to map out a plan to slow the pace of its asset purchase plan (third round of quantitative easing), generally seen as bad news for the equity market. Chairman Ben Bernanke has said in the past that there would be no changes to the current easing programs until there was a significant improvement in the labour market.

US retail sales were up 0.1% in April, beating the forecast for a 0.1% fall. Excluding autos and gas, sales were up 0.6%. The data was better than expected but still seen as a little soft.

Business inventories were flat and below the forecast of +0.3% and the previous reading of +0.1%.

Refinery crude throughput in China was down 3% in March (September low). Implied oil demand was up 3.2% in April compared with a year ago to 9.6mbs (eight-month low). Materials stocks down.

European shares mostly off their five-year highs among weakness in the financial sector.

According to Reuters with 90% of the S&P 500 having reported, 67.2% of companies have beaten earnings expectations — in line with recent averages.

  • Budget tonight 7.30pm — Tonight’s federal budget will detail a 10-year funding plan for education and disability policies. The budget also includes necessary structural savings and revenue measures, which will include a 0.5% increase to the Medicare levy, reductions in the baby bonus and higher education payments and the cancellation of planned tax cuts and family tax benefit increases. Economists have predicted a budget deficit of around $17bn.
  • Chandler Macleod Group (CMG) — Has issued a profit warning and expects financial year NPAT to be in range of $17 million-$19 million, down from $22.5 million. The company has blamed a subdued mining sector, weak business confidence and a reduction in employment. It follows yesterday’s profit downgrade from Mining Services company Coffey International (COF). CMG is down 11.4% to 50.5c.
  • Macquarie Group (MQG) — Has launched a $400 million Capital Notes (MCN) offer under the ASX code MQGPA. MCN notes will be fully paid, subordinated, non-cumulative, unsecured notes issued at $100. MQG is up 1.36% to 4606c.
  • A Goldman Sachs analyst says — Government revenue is likely to fall short of forecasts by as much as $145 billion over four years if the Aussie dollar remains above parity and by at least $50 billion if it falls below US90c.
  • CBA — 38,000 staff members will receive a gift of $250 each in recognition of achieving the highest customer service rating among the big four banks. This will cost the bank about $9.5 million.  CBA is up 0.87% to 7178c.

Peter Fray

Save up to 50% on a year of Crikey.

This extraordinary year is almost at an end. But we know that time waits for no one, and we won’t either. This is the time to get on board with Crikey.

For a limited time only, choose what you pay for a year of Crikey.

Save up to 50% or dig deeper so we can dig deeper.

See you in 2021.

Peter Fray
Editor-in-chief of Crikey

SAVE 50%