The market is down 15 points.It is option expiry today. That tends to lead to unusually large volumes without much price impact.

Our market surprisingly strong yesterday with the ASX 200 up 42 despite a 67 point fall in the Dow Jones the night before. It makes us a bit more vulnerable today than the Futures might suggest.

Dow Jones down 61 for the fifth fall on the trot. Up 38 at best and down 81 at worst. It is down 2.58% in five days or 403 points.

Durable goods numbers overnight were below expectations. New home sales numbers were a bit ahead of expectations.

Despite the market being down BHP and RIO were both up in the US by 1.00% and 1.61% with BHP up 9c on the close here last night — reflecting perhaps the rises in Australia yesterday (+0.4% and +0.5%).

Gold stocks up in the US as the Gold price rebounds $19.90, up for only the eighth time in 23 sessions. The 4.72% rise last Thursday had been completely lost again at the lows yesterday.

Metal prices mostly down — nothing notable.

The A$ has stabilised in the mid 93c zone — 93.64c this morning. The recent rise has put pressure on the RBA to cut rates again in October.

Bonds up again in the US (yields down). They have only fallen twice in the last 14 sessions suggesting the market thinks the US economy is weakening and that investors are moving to defensive “risk off” rather than “risk on”’ asset classes.

The iron ore price has had another good rise overnight, up $1.10. The price is holding over $130 despite brokers predicting falls to $80 earlier this year and despite one forecasting a fall to $115 yesterday. Not much movement on European markets.

RESULTS & STORIES

  • The US debt ceiling is set to become the market’s focus in the short term as US Treasury Secretary set a deadline for debt ceiling negotiations.
  • RBA Meeting next Tuesday. The RBA has been making a lot of noise about the risk of speculating in the property market.
  • US Economic releases tonight — Initial and continuing weekly jobless claims, GDP – third estimate and pending home sales.
  • Ex-dividend today — WEB (7c), LYL (21c).
  • Ansell (AAN) has bought Korean glove manufacturer Midas. They say it is earnings neutral in 2014 and ‘meaningfully accretive going forward”. It is costing US$41 million. Should be well received. Ansell is a company that does well with a lower A$ and is one of the well known currency plays in the market (Buy when the A$ goes down).
  • Malcom Turnbull has approached Former Leighton Holdings (LEI) CEO Wal King to join the Coalition’s NBN Co board.
  • Qantas (QAN) — Has landed a $4.35 million deal with the Tasmanian Government over three years to promote the state internationally and domestically.
  • Telstra(TLS) — Will undergo a major round of job cuts (1100 jobs) from their Operation business unit by June 2014.
  • Federation Centres (FDC) — Ex Centro Group has received advice from the Victorian state government that it has waived a $57 million liability which has been in dispute.
  • BHP Billiton (BHP) has priced a $5.0 billion bond issue some of which won’t mature for 30 years. It is in four tranches and includes $US2.5 billion of senior notes paying 5% that don’t mature until 2043. Some SMSF’s might have liked some of those. The five year notes they are issuing pay 2.05% and the ten year tranche 3.85%. (You can’t buy them).
  • TPG Telecom (TPM 432c) — Merrill Lynch have reduced their recommendation to Underperform following a 28% rally in the share price over 2 weeks on the back of an announcement to build their own FTTB network.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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