The market is up 9 points  ASX 200 Futures were up 21 this morning.

The Dow Jones finished down 5 — it was down 5 at best and down 58 at worst. The intra-day all-time high of 15542 was hit in May. Now 15544. The S&P 500 was up 2.7 on Friday to a new record high. Moody’s upgraded its US credit rating from “negative” to “stable”.

No economic numbers on Friday in the US. 

The Chinese decision to remove the threshold lower lending rate for banks passes a message, but is symbolic only. It helped the A$ marginally. Microsoft down 11.4% on results. Google down 1.55% on results recovering from an early 6% dip. GE was up 4.61% on results.

Schlumberger up 5.43% on results.

The Japanese upper house election at the weekend looks to likely to give Japan’s Prime Minister Shinzo Abe the mandate to continue his economic stimulus drive with what has been labelled the “third arrow”. Oil price up pretty much unchanged on a 16 month high at $108.05.

Gold price up $8.70 to $1292.The VIX volatility index hit its lowest level since May.

European markets mostly down — UK FTSE down 0.06%, Germany down 0.07%, France down 0.06%, Spain down 0.18%, Italy up 0.44%, Greece down 1.18%. Japan down 1.48% on Friday. The upper house election at the weekend and the prospect of continued stimulus should help today.

Resources down – BHP and RIO down 0.89% down 0.56% in the US on Friday. BHP closing up 19c on the close here on Friday.

Best sectors — healthcare (+1.4%), energy (+1.4%) and industrials (+1.1%). Worst sectors –– technology (-2.2%), with Microsoft crashing by 11% post its disappointing quarterly result.

ANNOUNCEMENTS & STORIES

  • Orica (ORI 1800c) — Closed down 13.38% on Friday after a shock profit downgrade which is seeing brokers downgrade earnings 10-15%. Some are expecting the company to cut its dividend to protect their gearing levels. Brokers have downgraded the stock across the board.
  • Macquarie Group (MQG 4406c) — Rallying into their AGM this week — Citi has a neutral recommendation with a target price of 4400c. They are positive on the company and have increased their 2014-15 EPS by 7%. MQG has its AGM on Wednesday. We have an open trade in Macquarie at the moment.
  • Resmed (RMD 488c) — Credit Suisse has a neutral recommendation with a target price of 518c. Last Friday the company announced that their patent infringement challenge to Apex Medical in Taiwan was successful. The broker says the judgment shows that other competitors will also need to develop their own IP to have any chance of success in the US, which is a big barrier for entry. Resmed is due to release the earnings results on Thursday. It benefits from a falling A$. They have a recent history of better than expected results.
  • BC Iron (BCI) — Released its 1uarterly results. Iron ore shipped was up 12% to 5 million tonnes. Cash costs are expected to be 4000c-4400c a tonne and FY14 production of 5.8 million to 6.2 million tonnes. Stock is slightly down. FMG owns 25%.
  • Macquarie Atlas Roads (MQA) — Up 6.73% after releasing its toll revenue and traffic statistics.
  • Fortescue Metals Group (FMG 367c) is due to report its June quarter results tomorrow. All eyes will be on an update on the sale of a $3 billion to $4 billion stake in The Pilbara infrastructure. The media says the sale could be scrapped altogether amid stronger than expected iron ore prices. FMG has given themselves until September 30 to make a deal.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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