The market is up 35 pointsDow Jones was up 28 points.

The S&P closed up 0.65% to 1745, another closing high.

Chinese third quarter GDP was up 7.8% over the year to September, higher than the government’s official target of 7.5%.

Gold fell US $8.40to US$1314.60 per ounce.

The US$ was weaker against major currencies. The Aussie dollar rose and is now trading at US$0.9668.

VIX volatility index fell 3.26% to 13.04. This common measurement of market fear continues to fall.

The partial government shutdown has delayed the release of lots of data, including CPI, industrial production, capacity utilisation and the leading indicators. They are expected early this week.

US Treasuries rose — expectations for tapering are being pushed out and the yield curve flattened further. The yield on the 10 year bond fell 1.2 basis points to 2.58% and the 30 year yield fell 1.73 basis points to 3.64%.

European share markets rose, hitting five year highs. The French CAC rose 1.09% and the UK FTSE was up 0.71%.

European bonds were generally stronger, with the exception of Portugal.

Oil rose 0.14% to US$4100.81

Base metal prices were stronger — nickel led the way, up 1.43%.

STORIES

  • Delayed economic data out in the US. The focus will be employment data for September, out on Tuesday. A number above 200,000 would show that the economy is on track and can potentially withstand the 16 day government shutdown. The backlog will include industrial production, capacity utilisation and lots of housing market statistics.
  • The US third quarter earnings season is in full swing. According to a survey by Thomson Reuters, earnings have exceeded expectations by an average of 4.2%. Revenue numbers are still disappointing in some cases.
  • Property market cools — The Australian property market took a breather over the weekend according to RP Data. National clearance rates fell to 71.6% with Melbourne, Brisbane, Perth and Canberra all weaker. Sydney clearance rates also fell but median prices were still higher. Vendors price expectations are rising faster than the buyers’ budgets in non-uniform conditions.
  • China is to become the world’s largest economy according to the Australian treasury, overtaking the US by the year 2030. It is forecasting Chinese GDP of 8% this decade, then a fall to 4.3% and gradually settling to 2% around 2040-2050. It also says Asia will become the world’s largest economic region by 2020, overtaking both US and Europe.
  • Transfield Services (TSE) — CEO Graham Hunt’s high remuneration and success fee is under fire after proxy adviser ISS advised clients to oppose plans to award the fee at the AGM later this week because of the company’s poor performance. Mr Hunt was awarded the right to be granted up to 840,700 shares, a further $1.5 million of shares for fiscal 2014 and a deferred success fee of up to another 235,900 shares.
  • Imdex (IMD) — The mining services company has painted a grim picture for the year ahead, saying a recovery in the minerals sector will be 2015 at the earliest. Its September quarter revenues fell by 28% to $53.3 million due to weak demand.
  • Coal prices in Asia are set to surge after coal recorded its worst quarter in four years, say HIS McCloskey. Growing demand and supply cuts from Aussie miners means coal prices could be set to rise sharply. The coal price is currently $US77.06 a tonne, similar to 2009 prices. Morgan Stanley expects a rise to $US82 in the fourth quarter. If you’re looking for a few coal stocks BHP is the obvious pick, but other pure play coal stocks include Whitehaven Coal (WHC), New Hope Coal (NHC) and Coalspur (CPL).
  • Atlas Iron (AGO) — Confirmed financial year 2014 shipping guidance of 9.87-10.3 million tonnes last week. It says the company is “going through a good patch thanks to buoyant iron ore prices and a record boost in production”. AGO closed down 4.35% on Friday.
  • Boral (BLD) — Closed up 4.22% last week after announcing a $US1.6 billion plasterboard and ceiling JV with a US firm.
  • Cochlear (COH) — Expects to record flat profit this year due to weaker demand.
  • CSL — Announced a $950 million extension of itsshare buyback.
  • Warrnambool Cheese & Butter (WCB) — Received yet another takeover bid from Murray Goulburn — trumping both Bega and Saputo’s offers. Fonterra is also believed to be considering a bid, saying on Friday it was “actively looking” at the Australian market.
  • Optus will return $9 million to hundreds of thousands of mobile phone customers billed for a service it didn’t request. Optus is a subsidiary of Singtel Telecoms (SGT).
  • Sydney Airport (SYD) — Traffic numbers last week — Chinese and Indian visitors increased, with double digit passenger growth from both locations in the past year.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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