The market is down 80. The Dow Jones finished down 115 on Friday and was up 10 at best and down 140 at worst.

San Francisco Fed President Williams said that it was “still too early” to reduce stimulus. A month ago Williams suggested that if the recovery continued along the same path then the Fed could start trimming its bond buying program by the start of the US summer. Fed Governor Jeremy Stein gave a different view suggesting that the Fed could consider the possibility of tapering in September. 

US 10-year bond yield up 2bpts to 2.49%.The Chicago PMI number was down from 58.7 to 51.6 in June and missed the forecast of 55.0. The final University of Michigan consumer confidence reading was up from 82.7 to 84.1 in June, beating the forecast of 82.8. 

Best sectors — consumer discretionary, utilities. Worst sectors — financials, technology.

European markets down — UK FTSE down 0.45%, Germany down 0.39%, France down 0.62%, Spain down 1.04%, Italy down 1.24%.

Germany’s retail sales were up to +0.8% from -0.1% in May beating the forecast of +0.2%. Germany’s inflation rate came in at +0.1% down from +0.3% in June, the number was in line with the forecast.

Metals mixed — copper up 0.06%, nickel down 1.01%, zinc up 0.19%, aluminium up 0.51%. Spot iron ore up $1.20 to $116.50.

Gold was up $12.10 to $1223.70.

  • The Chinese Purchasing Managers Index came in at 50.1, which was as expected.
  • The HSBC Chinese PMI number has come in below expectations at 48.2 against expectations of 49.2. 
  • Boart Longyear (BLY) — Has issued another profit warning — It has cut its 2013 earnings forecast due to weak market conditions. Market conditions have deteriorated since the last update with respect to drilling services. Current analyst expectations were for financial year revenue to be between $1.36 billion and $1.56 billion and EBITDA of $176 million to $211 million. It now expects revenue and EBITDA to fall below these ranges due to persisting industry volatility.
  • The AiG PMI Index was up 5.8 points in June to 49.6, which was slightly below 50, which signals an expansion in activity.
  • The TD Securities inflation gauge was unchanged in June, following a 0.3% increase in May. This gives an annual read of 2.4% which is well within the RBA’s range of 2%-3%.
  • Mirvac Group (MGR) — Is selling 50% of its stake for $317 million in the land and development of 200 George Street, Sydney, to AMP Capital Wholesale Office Fund (AWOF).
  • Amcor (AMC) — Says it  will acquire Jiangsu Shenda Group’s flexible packaging operations for $62.20 million. The company expects returns will be more than 20% by calendar year 2016.
  • Qantas (QAN) — Air India is looking to broker a code-share alliance with Qantas before the state-run airline finally launches direct services between the subcontinent and Australia. But Qantas said on Sunday it ”has no plans to establish a code-share arrangement with Air India”. .

Peter Fray

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