The market is down 15. The Dow Jones finished 114 after being up 165 at best. US 10-year bond yield down 7bpts to 2.47%.

Two influential Fed presidents spoke overnight and stressed that global markets had misinterpreted the Federal Reserve’s intentions.New York Fed President Dudley said that Bernanke was not trying to send a signal to markets when he spoke last week and that economic data was more important. Atlanta Fed President Lockhart said the fate of the bond buying program would be dependent on economic performance.

US pending home sales were up 6.7% in May, well ahead of the forecast for a 1.0% gain. US weekly jobless numbers were down 9,000 to 346,000 narrowly missing the forecast of 345,000. US personal income was up 0.5% which beat the forecast for a 0.2% gain. Personal spending was up 0.3% which was in line with the forecast and better than the previous reading of -0.3%. 

European markets up — UK FTSE up 1.26%, Germany up 0.63%, France up 0.97%, Spain up 0.27%, Italy up 0.44%. Metals mixed — copper up 0.33%, nickel up 1.37%, aluminium down 0.28%, lead up 1.06%. Spot iron ore up $1.50 to $115.30. Gold was down $29.80 to $1200.00.

ANNOUNCEMENTS AND STORIES

  • Caltex Australia (CTX 2047c) — The company put out a profit warning at 6pm last night — After a $50 million hit from the drop in the Aussie dollar first-half profit is expected to be between $160 million and $175 million, down from $197 million. The decline in the dollar has reduced earnings in the short term because of the increased cost of imported crude oil. Citi has a sell on the stock with a 1332c target price. Credit Suisse have a Neutral on the stock with a target price of 2170c and UBS are Neutral with a target price of 2090c. CTX is down 11.97% to 1802c.
  • Japanese Economics out today — CPI, Manufacturing PMI, Retail Sales & Unemployment. The Nikkei is up 1.98% this morning. The Chinese stock market has opened down 0.35%.
  • Morningstar – Have placed a Reduce on Telstra this morning with a fair value of 430c, current price 487c. They have also placed an Accumulate on Chorus (CNU) with a fair value of 280c, current price 194c. TLS is unchanged on 478c & CNU is up 2.84% to 199.5c.
  • Orica (ORI) — Has announced management changes including a new CFO. ORI down 2.96%.
  • Kingsgate Consolidated (KCN) — Has warned that they will likely write down the value of one of their mines by $300m due to weak gold prices and shift to cut costs. The announcement comes after Newcrest Mining (NCM) announced earlier this month that it will write down the value of assets by as much as $6 billion. KCN is down 6.25% to 127.5c & NCM is down 3.94% to 950c.

Peter Fray

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