The market is up 79. ASX 200 Futures were up 26 this morning. The Dow Jones finished up 101 overnight. The Dow was up 152 at best. 

Two US Fed officials downplayed the notion of an imminent end to stimulus and the departing Bank of England Governor Mervyn King said that anyone who thinks the Fed or any other major central bank will start raising rates soon was jumping the gun. 

US consumer confidence was up from 74.3 to 81.4 in June, beating the forecast of 76.6 – its highest level in over five years.

Inflation expectations for the coming 12 months were up from 5.3% to 5.5%. 

The Dallas Fed’s services activity index was up from +3.8 to +12.2 in June, its best reading since March 2012.

US new home sales were up 2.1% in May to an annual rate of 476,000. 

China’s Shanghai Composite was down 0.2% after being down as much as 5.8%. The overnight SHIBOR was down 75bpts to 5.74%, and the one-week interbank rate was up 33bpts to 7.64%. The rally was partly triggered by rumors that the PBOC would prove a more detailed explanation of its recent actions and explain the reason for the liquidity crunch. In the end a People’s Bank of China official said rates would be guided to a “reasonable range.” Not quite the definitive support statement expected.  The PBOC said that the recent increase in short term interest rates will soon abate as liquidity levels are appropriate. The deputy director of the PBOC said: “The seasonal fluctuation of interest rates in the cash market is a temporary symptom and these seasonal factors will disappear gradually.”

US 10-year bond yield up 4bp to 2.61%. 

  • ResMed (RMD) — Respironics — In California USA has announced the worldwide recall of 19,200 Philips Respironics 460 Ventilators to correct a software issue that may cause the V60 ventilator device to shut down. This could cause serious adverse health consequences, including death. RMD is their main competitor. Respironics and ResMed are both in the business of sleep respiratory products, they have similar products with small differences. RMD is down 0.58% to 510c.
  • Goodman Fielder (GFF 74.5c) — Finished up 4.93% yesterday after it issued a profit upgrade. The company says it expects a significant increase in the second half after a turnaround in its bakery business and the stabilisation of its dairy and grocery divisions. Brokers are seeing the stock as fully valued. The stock is on a PE of 13.8x, gross yield of 2.68% and ROE of 7%. GFF is down 2.01% to 73c.
  • Perseus Mining (PRU 51.5c) — Finished down 22.56% yesterday on the back of a profit warning. Last week the company experienced a number of plant maintenance issues resulting in lower gold production. It now expects second-half 2013 production to be marginally lower than the lower end of the 105-125koz guidance range. PRU is down 1.94% to 50.5c.

Peter Fray

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