The market is down 14 points. The Dow Jones was up 70 points to 15,616. The market opened up strongly before coming back to previous close levels. It strengthened throughout the day and closed near the highs in a 100 point range.

The ISM manufacturing index rose to 56.4 in October from 56.2, compared to expectations of 55.0. The data corroborated the stronger Chicago PMI from last week which was initially seen as a bit of an outlier.

The S&P was up 5 to 1762.

Oil fell 1.84% to US$94.61.

Gold was down US$10.50 to US$1313.20 per ounce.

The US$ rose against most major currencies and the Aussie dollar was slightly weaker, currently trading at US$0.9445.

VIX volatility index fell 3.42%to 13.28.

US treasuries were weaker — The 10 year yield rose six basis points to 2.620%.

European share were weaker — with the exception of the UK FTSE which rose 0.05%. The French CAC fell 0.62% and the German DAX fell 0.29%. The peripheral markets were weaker.

European bonds were mixed. French and German bonds were little changed but the peripheral markets rallied on weaker eurozone inflation data.

Base metal prices fell — led by aluminium down 2.6% and zinc down 1.46%.

Iron ore rose US$3.40 a tonne to US$135.30 a tonne.

STORIES

  • CBA’s first quarter update today appears a bit better than expected. One broker says “in line”. Cash earnings totalled $2.1 billion, up 13.5%. CBA was expected to report first quarter cash profit of around $2.06 billion. A combination of solid revenue growth and cost discipline led to the strong first-quarter profit. Group net interest margin was lower than the prior half, reflecting deposit margin compression in a lower interest rate environment. Impairment expense $228 million.
  • 21st Century Fox (FOX) — First quarter profit fell 44% to $1.26 billion or 54 cents a share, down from $2.23 billion. The fall reflects an asset sale from last year dropping out of the numbers. Excluding that (a $1.37 billion gain) earnings were down 13% on revenue up 18%. The revenue number at $7.06 billion was above expectations for $6.8 billion and the earnings number of 33c was below expectations of 35c. It has an ongoing share buyback that has so far bought $7.9 billion worth of Class A stock.
  • AMP has launched a $200 million subordinated notes offer — Floating rate notes, unfranked, market rate plus margin of 2.65-2.85% to be determined by bookbuild, mature December 2023. Minimum investment of $5000. The issue is to replace the existing AMP notes which can be rolled for $100 each into the Notes 2 offer or they will be redeemed for cash in May 2014.
  • WBC go ex dividend 88c plus the 10c special on the  Friday, November 8.
  • NAB and ANZ are ex-dividend tomorrow 97c and 91c. The last day to buy them for the dividend is today.
  • Tapering — The Jobs numbers on Friday in the US are all-important. The unemployment trend is the critical variable in the tapering debate. Bad news is good news here. Bad jobs numbers mean less chance of tapering. At the moment the market is assuming no tapering until March/April by which time Janet Yellen will in the Chair and may be looking to “own” or disown tapering.
  • US results season is into its last throes. It’s been generally good.
  • The RBA yesterday left rates alone but commented that the A$ was “uncomfortably high”. Otherwise there was nothing new. Glenn Stevens said the economy was likely to continue growing at a slower than average pace in the short term due to lower mining investment. The RBA also said it was too early to tell how long the rise in business and consumer sentiment would last. The RBA’s rate cutting cycle started two years ago on Melbourne Cup Day 2011.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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