The market is down 29 points.

The Dow Jones was up 85 points to 15,962. The market rose from the start of the day and closed near its highs in a 97 point range. Economic data was weaker than expected but markets were still buoyed by Janet Yellen’s dovish comments to the US Senate Banking Committee.

The S&P was up eight to 1798.

Oil rose 0.08% to US$93.84.

Gold was up US$1.10 to US$1287.40 per ounce.

The US dollar was weaker against most major currencies and the Aussie dollar was stronger, currently trading at US$0.9379.

VIX volatility index fell 1.46% to 12.19.

US treasury markets were slightly weaker — the yield on the 10 year bond rose one basis point to 2.706%.

European shares were stronger — The UK FTSE rose 0.41% and the French and German markets were up 0.19% and 0.21% respectively. The Italian and other peripheral markets fell after the EU said Italy’s draft budget risked breaking the rules.

European bonds were generally unchanged. The Euro 10 year bond yield was unchanged and the UK 10 year bond yields fell one basis point. Italian 10 year bonds fell with the yield up four basis points.

Base metal prices were stronger — led by nickel up 1.32% and Zinc up 0.70%. Aluminium was slightly weaker.

Iron ore was up US$0.20 to US$136.80 a tonne.

STORIES

  • AGMs — A few on this week including BHP Billiton (BHP), Myer (MYR), David Jones (DJS), Kathmandu (KMD), Monadelphous (MND), iiNet (IIN) and Seven Group (SVW). Today we have Arrium (ARI) and iSelect (ISU).
  • Domestic economic data this week — not a lot on. The minutes from the RBA meeting are out on Tuesday. We have speeches by the RBA Assistant Governor on Wednesday and by Governor Glenn Stevens  on Thursdays.
  • International data — Chinese property prices are released today and the HSBC Flash PMI number is on Thursday. Later in the week we have US retail sales, CPI, PPI, Home Sales and inventories data , and in Europe there is investor sentiment, consumer confidence, the Flash Manufacturing PMI and the German business survey. The focus will be on the Chinese Flash PMI to ensure the Chinese economy is maintaining momentum and on US inflation data — inflationary pressure would bring forward expectations for tapering to start in December but at this stage seems very unlikely to trouble the markets.
  • China has announced some reforms following the conclusion of its third plenum. Some of these include higher dividends from state companies back to the government, the easing of the one-child policy, less regulated markets and greater property rights for farmers. Chinese reforms include a taxation system overhaul to land reform which will have direct consequences to Australian industrial sectors such as resources, tourism and real estate. A crack down on overcapacity on things such as steel may have an effect on our iron ore industry.
  • The NZ government has announced the sell-down of its 73% ownership of Air New Zealand to around 53%.
  • Qantas Airways (QAN) — CEO Alan Joyce has written to the federal government to ask them to block a $350 million foreign capital injection into Virgin Australia (VAH).
  • GrainCorp’s biggest individual shareholder is against the ADM bid.
  • Woodside Petroleum (WPL) — A fight for the Leviation gas field in Israel is underway with Russia, China and South Korea all trying to cut Woodside out of the equation and score large chunks of the gas field.
  • Leighton Holdings (LEI) — More corruption allegations emerge.
  • Chorus (CNU) — Has withdrawn its dividend guidance of 25.5c after recent regulatory uncertainty facing the company in regards to the outcome of the Government’s independent review. Stock is down 5%.
  • Woolworths (WOW) and Coles (WES) have agreed to a code of conduct which attempts to protect their suppliers. The code prevents the big supermarkets from using their market power to alter agreements with suppliers, from charging suppliers for theft or from using suppliers intellectual property to develop private label products.
  • Downer EDI (DOW) — has won a $500 million contract for mining services at the Roy Hill open cut mine in the Pilbara. The four-and-a-half year contract involves pre-stripping and supplementary mining activity.
  • Freelancer.com (FLN) — Is up another 17.19%.

Peter Fray

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