The market is up 5. We were down 24 at the low this morning. ASX 200 Futures were down 2 this morning. The Dow Jones finished up 138 last night on above average volumes. The Dow closed on its high of the day on mixed economic data.

The US ISM manufacturing index was down 1.7 points to 49.0 in May. Although the ISM number missed expectations, the disappointing data was taken as a sign that the Fed is more likely to maintain its current stimulus measures encouraged by Atlanta Fed President Dennis Lockhart, who said “I would just encourage everyone to not lose sight of the bigger picture…Any adjustment (to Quantitative Easing) is not a major policy shift. The high level of accommodation will stay in place.”

US construction spending was +0.4% in April up from -0.8% in the previous month and just short of the forecasts of +0.7%. The European Markit Eurozone Manufacturing PMI was up from 46.7 to 48.3 in May, and up from an earlier flash reading of 47.8. France and Germany’s market manufacturing PMI readings also came in better than expected.


  • Billabong (BBG) — BBG is down 51.65% in early trade after announcing that takeover discussions with Sycamore Partners have now concluded. Talks will now focus on asset sales, refinancing and a solution to an appropriate capital structure. At the same time the company has also downgraded earnings guidance and expects EBITDA of $67 million to A$74 million, down from $74 million to $85 million. BBG will resume trading at 11am.
  • SMS Management & Technology (SMX) — Down 7.39% in early trade after publishing a presentation including a profit downgrade — “Significant projects expected to commence in 2H have slipped and will not make an expected contribution to 2H result.” SMX is down 7% to 466c.
  • Ten Network (TEN) — Has confirmed that it has won the right to broadcast the domestic Twenty20 cricket competition for five years from next summer. Ten has not said publicly how much it paid for the rights, but it has been reported the deal is worth $100 million. The company bid $500 million for the rights to all international cricket matches played in Australia plus the Big Bash, but the Nine Network has retained the rights to Test and One Day International matches. TEN is up 0.86% to 29.25c.
  • A flood of economic data released yesterday has painted a mixed picture for economic growth in the coming months. A Deutsche Bank economist said yesterday’s data suggests the national income crunch that weakened the economy last year, as iron and coal prices fell, may be easing. Financial markets expectations for a rate cut today are at about 15% with all but one of 25 economists surveyed predicting the cash rate will be kept unchanged. Some brokers downgraded GDP forecasts today on the back of the economic numbers yesterday.
  • Cochlear (COH) — Has rebounded 5.6% after an 18.07% fall yesterday after a profit downgrade.

Peter Fray

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