The market is down 23 points. ASX 200 Futures up 16 this morning.The Dow Jones finished up 97. It was up 123 at best and down 35 at worst.

The S&P 500 closed up 13 to 1653.

Syria — The potential for a delay to military action saw the market higher as Senator John McCain was reported by Fox News as being opposed to an action plan in Syria if it was “not forceful enough”. He proposed two amendments to the proposal that were voted through in an afternoon vote. Meanwhile Obama and Congressional leaders have decided that “America should take action” in Syria and we await congressional approval on Monday.

Gold price down $22 to $1390.

Stronger economic numbers in the US — Mortgage applications up for the first time in four weeks. Beige book generally upbeat saying the economy is set to expand at a “moderate to modest pace”.  Trade deficit was a bit bigger than expected.

Bonds fell — the 10 year bond yield up four basis points to 2.900% — the 30 year rate also up two basis points to 3.799% closing at two year highs (a worry for the housing market).

The A$ has rallied a cent overnight to 91.67c as currency markets reacted to yesterday’s “not as bad as expected” Australian second quarter GDP number. The A$ is down from a recent high of $92.34c and a low of 88.48c on 5th August.

BHP was up 0.98% in the US overnight. The stock closed in the US down 9c on the close here yesterday. RIO up 1.51% in the US.

The oil price down 1.31%.

European markets mostly up. Small gains only. Italy fell 1.35%.

The Japanese market was up 0.51% yesterday. The Chinese market was up 0.21% yesterday.

The iron ore price was unchanged at $138.70 overnight.

Metals mostly down — Copper down 1.72%, zinc and aluminium down 1.87%.

US Economics tonight — Challenger Job Cuts, ADP Employment Change, initial and continuing jobless claims, productivity, unit labor costs, factory orders, and ISM Services.

In Europe tonight — Bank of England and ECB policy meetings. German factory orders.

STOCK STUFF

  • Non-farm payroll numbers on Friday in the US — Consensus of +182,000. Above 190,000 is seen as a level likely to trigger tapering.
  • The A$ has rallied a cent overnight to 91.67c overnight as currency markets reacted to yesterday’s “not as bad as it could have been” Australian Q2 GDP number (+0.6% and +2.6%). The A$ is down from a recent high of $92.34c and a low of 88.48c on 5th August. The number makes another rate cut in Australia less likely.
  • Election odds — The Coalition paying $1.01 for a win on Sportingbet and Labor paying $17.
  • Clive Palmer Party paying $1.15 for winning no seats and $6 for winning one seat. There is a possibility that his Party will hold the balance of power in the Senate if they win one seat.
  • McMillan Shakespeare (MMS 1314c) — The stock closed up 8.51% yesterday. The share price is being driven by the odds on the federal election on Saturday. The jump yesterday came after Tony Abbot sent the company a letter pledging his support to keep FBT rules as is.
  • IOOF Holdings (IFL 845c) — JPMorgan has Neutral recommendation with a target price of 833c. The company has just lobbed a takeover bid for The Trust Company (TRU) and will pay $6.73 a share, a 16% premium to the pre-bid price. They expect the acquisition to be 8% earnings accretive in financial year 2015. The company is already under offer from PPT.
  • CSL (6734c) — Citi retains a SELL recommendation with a target price of 5961c (12% below the price). They think shares are expensive and argue that a high PE leaves no room for disappointment. They think this will come in the form of increased competition as new products enter in the SCIG & Haemophilia markets. The brokers talk and the share price speaks. With a 49% ROE, if it can be sustained, the low yield is appropriate and the PE with it.
  • Allied Healthcare Group (AHZ 10c) — Here’s a speccy one — Stock is up 100% since the start of July. The company is a diversified healthcare company investing in and developing next generation technologies of medical devices. They focus on commercialising tissue engineering technology for use in cardiovascular and soft tissue repair surgery. CIMB Securities has an Outperform recommendation.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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