The market is down 47 points.The Dow Jones finished down 225. It was down 244 at worst. It is down 338 in two days.

The S&P 500 closed down 24 to 1661. 1655 is seen as a significant support level.

Iron ore broke its run of gains to close down $1.60 to $141.20.

Gold up $27.50 to $1390. The S&P Gold Mines ETF in the US jumped 6%.

A lot of US data overnightsuggested the US economic recovery is still underway raising the prospect of quantitative tapering sooner rather than later, hence the sell-off. Perversely good news is bad news for the equity market. In summary — Initial jobless claims lower than expected (lowest in six years), CPI in line, Empire Manufacturing index stronger than expected, NAHB housing market index stronger than expected. The iShares Dow Jones US Home Construction ETF was up 2.4%. It is down 20% from its highs.

Industrial production and the Philadelphia Fed index came in below expectations.

The 10 year bond yield jumped hitting 2.82% (closing at 2.772%) with the 30 year up to 3.835%. The spike in bond yields is a concern for the US Fed and if anything would delay tapering as mortgage rates threaten to kill off the housing market recovery:

BHP up 0.28% in the US and RIO down 1.59% — BHP closed at the equivalent of 8c down on its close here yesterday.

A$ static at 91.33c despite a fall in the US dollar index. It is up from a low of 88.48c last week and down from a high of 92.21c on Monday.

Strong UK retail sales numbers saw the GBP higher.

Metals mixed. Nickel up 1.16% and copper up 0.15%.

US performers — Wal-Mart down 2.6% on results. Cisco Systems down 7.17%.

The Japanese market was down 2.12% yesterday. The Chinese market was down 0.87%.

European marketsmostly down. UK down 1.58%. Italy was up.

Oil price up 48c to $107.33 as the violence in Egypt begins to shock the world.

US Economics tonight — Housing starts, building permits, productivity, unit labour costs, Michigan consumer sentiment.

In Europe tonight — eurozone CPI, eurozone current account.

US Economics overnight:

  • Initial Claims: Actual 320K, consensus 339K, prior 333K (revised 335K)
  • Continuing Claims: Actual 2969K, consensus 3000K, prior 3018K (revised 3023K)
  • CPI: Actual 0.2%, consensus 0.2%, prior 0.2%
  • Core CPI: Actual 0.2%, consensus 0.2%, prior 0.2%


  • ANZ — Third quarter trading update — Cash profit of $4.8 billion up 11% and broadly in line with broker consensus. Their outlook is brighter due to a lower Aussie dollar. Revenue up 5%, while expenses down 0.5%. Overall the bank said their performance was in line guidance. Boss Mike Smith said although the economic outlook in Australia had softened, there was still cause for greater optimism in the medium term as the effect of lower interest rates, a more competitive currency and the removal of some pre-election uncertainty underpin consumer confidence and economic activity. The biggest change was a 5% fall in the average Australian to US dollar rate. Net interest margin down 2 basis points since March.
  • Santos(STO) — 1H Net Profit of $271 million up 3%. Underlying Net profit of $251 million down 11% and above broker consensus of $246 million after higher natural gas prices offset a fall in production volumes. Production was hurt when a Vietnamese oil facility experienced a power outage and a project in Bangladesh ran out of natural gas. Revenue up 1% to $1.53 billion. 1H dividend 15c.
  • APN News & Media (APN) — Net profit up $1 million to $16.2 million. Statutory Net profit was $12.8 million compared to a loss of $319.4 million last year but below analyst expectations of a $15.3 million profit. The company is on track to reduce their debt by $40 million-$50 million by year end. Publishing conditions remain challenging but revenue falls are stabilising.
  • Duet Group (DUE) — Net profit of $81.7 million up 17% after a $111.2 million one off expense. The result was below an expected $119 million profit. EBITDA of $736.3 million up 4%. Distribution of 16.5c.
  • Automotive Holdings Group (AHE) — Operating profit of $72.7 million up 13.4% and below an expected $73.5 million. Group revenue was $4.278 billion up 9.1%. Final dividend of 12c bringing the total dividend to 20c. Strong focus on sustained organic growth and Greenfield development in Automotive.
  • BHP Billiton (BHP) — US authorities have stepped up an investigation into potential breaches of anti-corruption laws by the company including its sponsorship of the 2008 Summer Olympics in Beijing.
  • Fortescue Metals Group (FMG) — Has announced a $US1.15 billion investment by Formosa in the FMG Iron Bridge JV established to develop the FMG Iron Bridge project. Formosa will take a 31% stake in Iron Bridge JV.
  • Asciano (AIO) — Capital raising? – Media reports say the company is looking at buying BIS Industries valued at north of $1.2 billion. BIS Industries, which makes $219 million a year, could provide AIO with earnings stability. But the acquisition will require AIO to have an equity raising — the company already holds a fair amount of debt.