The market is down 1.9 points.

The Dow Jones was down 66 points to 15,901. The market rose briefly above 16,000 for the third day in a row but failed to maintain this level, falling after the FOMC minutes and comments from St Louis Fed President James Bullard. There was a slight rise before the close. The market traded in a 150 point range.

Bernanke’s speech yesterday seemed to put tapering off but the FOMC minutes and comments from St Louis President Bullard suggest tapering could start earlier if the economic data improved. The economic data was generally good — retail sales surprised on the upside while inflation was benign. Existing home sales fell 3.2%.

The S&P was down seven to 1781.

Oil was flat at US$93.33.

Gold fell US$30.40  to US$1243.10 per ounce.

The US$ was stronger against most major currencies and the Aussie dollar was weaker, currently trading at US$0.93.37.

VIX volatility index rose 0.07% to 13.40.

US treasury markets were weaker — the yield on the 10 year bond rose nine basis points to 2.803%.

European shares were weaker — the UK FTSE fell 0.25% and the French CAC was down 0.09%. The German market rose 0.10%. There were rumours the ECB were discussing negative deposit rates

European bonds were flat, with the yield on the Euro 10 year bond yield unchanged. The peripheral markets saw slight weakness.

Base metal prices were mixed — Nickel and Aluminium were both down almost 0.75% each, but copper and lead rose 0.45% and 0.33% respectively.

Iron ore rose US$0.10 to US$136.40 a tonne.


  • The FOMC meeting minutes were out last night. The interpretation was that economic data could be strong enough to support tapering over coming months. This is a slight divergence from comments by the current and future Chairs Ben Bernanke and Janet Yellen and the markets fell on the mixed message and the US$ rose (A$ fell).
  • AGMs today — BHP Billiton (BHP) in Perth, Sonic Healthcare (SHL), Harvey Norman (HVN), Goodman Group (GMG), Paladin Energy (PDN), Ausdrill (ASL), Acrux (ACR) and Horizon (HZN). BHP have already had their AGM in London, so we’re not expecting much in the way of new news. We are expecting to see objections to their remuneration resolution and an update on Chinese markets.
  • RBA Governor Glenn Stevens talking tonight on the 30th anniversary of the float of the Australian dollar. He is expected to again target the high Aussie dollar as a major concern.
  • More US economic data tonight including PPI, weekly jobless claims and natural gas inventories.
  • Talk that the ECB are discussing negative deposit rates.
  • China HSBC Flash Manufacturing PMI is out today. The consensus is for the index to fall to 50.8 from 50.9 in October.
  • Europe — the PMI composite and consumer confidence for November is released.
  • The Bank of Japan issues its monetary policy statement and target rate today.
  • Sonic Healthcare (SHL) — AGM – financial year 2014 guidance unchanged, EBIT growth expected to be 5%. Results tracking in line with guidance after 4 months of tracking.

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Peter Fray
Peter Fray
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