The market isdown 8 points.The Dow Jones finished up 31. It was up 84 at best and down 77 at worst.

The S&P 500closed up five to 1694.

Retail sales in line with expectations prompting talk of quantitative easing tapering in September and helping the US$ to rise and sending equities down 77 early on.

Federal Governor Lockhart turned things around by repeating comments from Governor Bullard that tapering was still data dependent, implying that they had not seen enough evidence to warrant tapering yet.

The US department of justice blocked the merger of American Airlines and US Airways. AMR fell 45%.

US performers — Apple up 4.8% as Carl Ichan disclosed a “large position”.

Gold down $13.70 to $1320 on talk of an Indian duty on gold imports.

Iron ore up $3.10 to $141.80. The iron ore price is all the talk after another 2.24% rise overnight adding to Friday’s 4% rise.

BHP down 0.24% in the US and RIO up 0.80% — BHP closed at the equivalent of 11c up on its close here yesterday.

A$ is up from a low of 88.48c last week to 91.00c but is down from a high of 92.21c on Monday.

Metals mostly up. Not a lot of movement on the majors.

The Japanese market was up 2.57% yesterday after a weak GDP number prompted talk of more government stimulus with a rumour that the PM Shinzo Abe would cut the corporate tax rate to offset and increase in sales tax.

The Chinese market was up 0.23%.

European markets mostly up around 0.5% on better than expected Eurozone and German ZEW Economic Sentiment surveys. Greece down 1.66%.

Oil price up 72c to $106.83.

US Economics tonight — MBA Mortgage index, PPI, CPI

In Europe tonight — Eurozone Flash GDP, French and German preliminary GDP, French non-farm payrolls. UK jobs numbers.

ANNOUNCEMENTS & STORIES

  • Consumer confidence swung higher in August with The Melbourne Institute and Westpac Bank showed its index of consumer sentiment rose 3.5% in August from July.
  • Commonwealth Bank (CBA) — Results good but the dividend is 200c against talk of 210c. Has delivered a record financial year profit of $7.67 billion and a cash profit of $7.82 billion up 10% and above an expected $7.658 billion. They have also increased their dividend to 200c above an expected 197c. No special dividend as many expected.
  • CSL Limited (CSL) — Jumped 4% yesterday ahead of today’s results. Financial year  net profit of $US1.22 billion up 19% but was 3-4% lower than expected. Dividend was US52c also in line. They said trading conditions were tempered by ongoing economic pressures.  Financial year 2014 earnings guidance for profit growth of 10% against forecasts a touch above that. They say they are considering another share buyback — theirs is 97% complete. There are 8 buys, 6 holds and 1 sell recommendation in the research. The Patersons analyst comment is that the financial year 2013 result was in-line with consensus expectations at all levels and the indication of a further buyback is a positive. CSL’s financial year 2014 earnings guidance was also in-line with revenue growth of consensus 8% and profit growth of consensus 11%. He does not expect any significant changes to consensus forecasts following the financial year 2013 result release. Based on the current forecasts, at the current share price and AUD/USD of 0.91 this implies financial year 2014: PE 22x; Yield 1.9%; EPS Growth 12% and financial year 2015: PE 20x; Yield 2.2%; EPS Growth 12%.
  • Computershare (CPU) — financial year net profit of $US157 million down 9.2% and pretty much in line with a consensus figure of $US159 million. Final dividend of 14c. The cleaned up NPAT number was US$305 million against consensus of US$305 million. Earnings up 12% against guidance of 10-15%. Guidance for 2014 is just +5% earnings growth against consensus of +10%.
  • Leighton Holdings (LEI) —  Net profit of $366.2 million up 220% from last years $114.6 million profit. Underlying profit was below broker forecast of $267 million. This figure included a one off Telecoms stake sale which resulted in a $115 million profit. Dividend 45c.
  • Carsales.com (CRZ) — financial year $83.5 million up 17% which was above consensus of $82.7 million. Dividend 15.6c.
  • WorleyParsons (WOR) — Net profit of $322.1 million and slightly below an expected $325 million. Dividend of 51c in line. Guidance — they say diversification should support increased financial year 2014 earnings and remain confident of medium and longer term prospects which remain positive.
  • Oz Minerals (OZL) — Net Loss of $268 million versus a profit of $119 million last year. This included a write down of assets of $231.9 million so Underlying Net loss was $36.1 million which was worse than an expected loss of $32.4 million. Underlying EBITDA was $50 million also below an expected $54.3 million. Interim dividend of 10c. Sales down 39% to $316 million against a Were’s forecast of $340 million.
  • Primary Health Care (PRY) — Financial year NPAT of $150.1 million up 29% but below an expected $179 million. Dividend of 11c up from 6c.
  • Southern Cross Media (SXL) — Financial year Net profit of $96 million up 1.1%. Underlying NPAT of $91 million above an expected $89.5 million. Net debt $600 million. Dividend 4.5c fully franked.
  • SAI Global (SAI) – Net loss of $43.2 million after an $86 million impairment charge. Underlying profit of $42.4 million down 5% and below an expected $49.2 million profit. Revenue up 6% to $478 million. Final dividend of $8.2c fully franked.
  • Goodman Fielder (GFF) — FY Net profit of $102.5 million well above a Net Loss of $146.9 million last year. Normalised NPAT was $75.7 million up 5% but below broker forecast of $81.3 million. Dividend was 3c. They expect financial year 14 earnings weighted toward 2H and trading conditions in Australia and NZ remain challenging.
  • Singapore Telecoms (SGT) — first quarter net profit up 6.9% to $S1.01 billion up from $945 million. Underlying net profit  up 6% to $897 million. They expect group revenue and EBITDA to decline by mid-single digits. Optus’ profit up 7.7% to $167 million even though revenue fell 5.3% to $2.12 billion.
  • Skycity Entertainment Group (SKC) — Net profit of $127.2 million down 8.1%. Normalised profit of $136.3 million down 3.6% and below an expected $140.3 million.
  • Bradken (BKN) up 12% on results yesterday kicking off a rally in Mining Services stocks (see performance of mining services stocks yesterday in table on right). The theme is that heavily shorted stocks that have OK results are seeing short covering and rapid rallies.
  • For the traders — here is a list of the most shorted stocks in the market — all potential trades should their results not surprise on the downside. The 52% rise in BBG and the 12% rise in BKN and the doubling of DJS in the last year have all highlighted the shorted stocks as potential trades.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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