MMR July 4 

The market is up 44. The Dow Jones finished up 56.

The Dow was up 93 at best and down 73 at worst in a shortened session ahead of Independence Day

The US ISM non-manufacturing survey missed the forecast of 54.0 and eased from 53.7 to 52.2 in June – the lowest level since Feb 2009.

Weekly jobless numbers were 343,000 down from 348,000 which was better than the forecast of 345,000. Continuing jobless numbers came in at 2,933,000 down from 2,987,000 which was better than the forecast of 2,950,000. 

The trade deficit widened from US$40.1 billion to US$45.0 billion in May, mainly due to jump in imports. 

ADP private sector job gains were up from 134k to 188k in June beating the forecast of 160k. This was the highest reading since February.

Healthcare stocks underperformed after the Obama administration said it wouldn´t require employers to provide health insurance for workers will 2015.

Oil broke above $100 is trading at May 2012 after Egyptian President Mohamed Morsi was removed from his post after he failed to answer the demands of protesting crowds within a specified timeframe by their armed forces.

US 10-year bond yield was up 3bpts to 2.50%.

The Chinese Purchasing Managers Index came in at 50.1 which was as expected.

  • Crown (CWN) — At 1pm today NSW premier Barry O’Farrell is expected to announce whether he will grant James Packer a casino licence in Sydney. Both Crown and Echo Entertainment are bidding for the licence. Crown is considered the favourite. Deutsche Bank has a Buy on the stock with a target price of 1510c. CWN is up 2.18% to 1221c.
  • Hills Holdings (HIL) — Says its underlying financial yer profit will be slightly higher than market expectations but $155 million in restructure costs will push its bottom line into the red. It expects underlying profit to be slightly higher than market forecast of $16.1 million to $18.6 million. HIL is up 7.62% to 113c.
  • Flight Centre (FLT 4072c) — Closed up 2.14% yesterday after upgrading profit guidance for the second time in a few months to between $338 million to $342 million, up from $325 million to $340 million. RBS Morgans say the profit upgrade was an outstanding outcome and has a neutral recommendation. Citi also has a neutral recommendation with a target price of 3870c up from 3710c. It says the upgrade was in line with their forecasts. But they caution that the company’s total returns are still only running at 2% and have kept their rating. FLT reports on August 27th. FLT is up 1.52% to 4075c.
  • Woodside Petroleum (WPL 3462c) — Closed down 3.35% yesterday after cutting production guidance. RBC Capital Markets energy analyst says this kind of bad news tends to get magnified in this type of market. But there is good news, it’s not a loss of production just a deferral of production. Citi has a buy recommendation with a target price of 4028c down from 4035c. It trimmed its forecasts by 3.5%. WPL is up 1.99% to 3531c.
  • New News Corp (NNC 1644c) — A few brokers have initiated coverage on the stock. JP Morgan have a Neutral recommendation with a target price of 1751c. They say the business is in transition which has clouded their financial outlook. The broker is waiting until the dust settles. Macquarie have an Underperform recommendation with a target price of 1510c. They say risks exist in the News & Information business and the Education segment profitability is unclear. Deutsche Bank has a buy recommendation. Goldman Sachs has a neutral recommendation with a target price of 1850c.  NNC is up 0.12% to 1646c.

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Peter Fray
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