The market is up 29 points.

The Dow Jones closed up five to 16,026. The market range-traded in the session, closing near its lows in a 45 point range.

There was no major data out overnight. The key influence was commentary from some Fed officials which suggested the chances of an earlier than expected start to tapering had increased.

The S&P was up three points to 1,808.

Oil was down 0.49% at US$97.17.

Gold rose US$10.70 to US$1239.70 per ounce.

The US$ was weaker against most major currencies. The Aussie dollar was weaker and is currently trading at US91.10c.

VIX volatility index fell 2.18% to 13.49.

US Treasury markets were stronger — the yield on the 10 year bond fell 1 basis points to 2.843%.

European shares were stronger — the German DAX was up 0.25%, the UK FTSE was up 0.11% and the French CAC also rose 0.11%. European markets were generally buoyed by yesterday’s strong Chinese economic data.

European bonds were flat, with the yield on the Euro 10 year bond unchanged at 1.838%. The French and German 10 year bond yields were also unchanged and the UK 10 year bond yield rose two basis points.

Base metal prices were stronger — led by zinc up 1.44% and nickel up 1.39%. Aluminium rose 0.72% and copper rose 0.0.23%.

Iron ore rose 20c to US$139.40 a tonne.


  • BHP Billiton (BHP) — Investor day — CEO Andrew Mackenzie has reaffirmed production guidance and told shareholders it will reduce capital expenditure. He said, “a 25% reduction in capital and exploration expenditure is planned for this financial year and our level of investment will decline again next year.” It will continue to build on the $US2.7 billion reduction in cash costs this year. BHP will focus on its four pillars of iron ore, copper, coal and petroleum to deliver higher growth, higher margins and stronger investment returns.
  • ERA – Has received notification from Northern Territory and Commonwealth regulators in relation to the suspension and recommenced of processing operations at the Ranger Mine.
  • Woodside Petroleum (WPL) — Investor Update — It has narrowed its production target for 2013 to a range of 86-88 million barrels of oil from 85-89 million barrels of oil. The Ngujima-Yin Floating Production Storage and Offloading (FPSO) vessel successfully recommenced production at the Vincent Oil field on November 29. The FPSO had been in Singapore for planned shipyard maintenance during 2013. WPL’s  production target range for 2014 is 86-93 million barrels of oil,. WPL’s total estimated investment expenditure for 2013 has decreased to $US1.1 billionn from the previous guidance of $US2.3 billion due to the deferral of Leviathan expenditure. They are also set to scale back Gulf of Mexico presence. Final decision on Leviathan Investment in the first half of 2014.
  • NAB’s technology transformation program is on track. The NextGen core banking platform will start to filter through to its performance next year and the entire process is expected to be complete in just a few years from now. When complete, it will be one of the most comprehensive technology transformations in the world today. It has been a multi-billion dollar, 10 year process.
  • Recall Holdings (REC) — Is due to list today at 12pm. Recall is Australia’s biggest logistics company and will be spun out of Brambles (BXB). BXB will retain their core pooling business of reusable crates, plastic containers and pallets operating under its CHEP and IFCO brands. The demerger is seen as a positive for BXB as it allows the company to focus on growing its dominant pooling solutions business and lowering its cost base. No new capital is being raised. Existing shareholders will retain their Brambles shares and be issued 1 Recall for 5 Brambles shares. The initial share price will be closely tied to Brambles share price. Morgan Stanley are forecasting the value of Recall’s shares in the range of 89c-104c per share.
  • Hotel Property Investments (HPI) is due to list today. Consists of a portfolio of Coles-operated pubs and bottle-shops located in Queensland. The float is $279 million with the offer price of its stapled securities at 210c.
  • Qantas Airways (QAN) — Boss Alan Joyce says his airline is not looking for a government bailout, unlike Holden. Yesterday Qantas announced Jetstar will establish a new cabin crew and pilot base in Adelaide after cutting back on services from Darwin.
  • Seven Group Holdings (SVW) WesTrac has announced that they have reached an agreement to acquire Caterpillar Global Mining’s distribution and support business in provinces where WesTrac operates in north-eastern China. WesTrac expects to begin providing sales, service and support for expanded mining products in these territories. The transaction is valued at approximately $US130 million and SVW will fund the transaction through a new five year debt facility. The acquisition is expected to be largely EPS neutral for the remainder of the 2014 financial year and accretive thereafter. WesTrac estimates the annual revenues for the acquired distribution and support business to be $US210-250 million for the 2015 financial year.
  • Chinese Data today — industrial production, retails sales and fixed asset investment
  • Overseas data tonight — US wholesale inventories and UK industrial production.
  • Holden boss Mike Devereux has said this morning that no decision has been made regarding the future of Holden in Australia. He appeared before a Productivity Commission inquiry hearing in Melbourne, following speculation the car manufacturer would announce it was shutting down Australian manufacturing operations at its submission. Media reports suggest Holden’s American owner General Motors has already decided to pull out of Australia from 2016, but won’t announce the decision until early 2014.

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