The Dow Jones was down 150at 15,699 — the market dropped heavily at the start and was down 230 points at one stage. Share prices strengthened over the day before falling in the final hour.
The market was initially weaker after poor economic data from Europe, fears Chinese growth is slowing and continuing concerns about developments in emerging markets. Corporate earnings were mixed with Chevron and Mattel disappointing analysts but Chipotle Mexican Grill results in line. Economic data was generally positive — consumer sentiment and the Chicago PMI were both above expectations, personal income was unchanged and spending rose 0.4%.
The S&P fell 12 pointsto 1783.
Oil was down 0.75%at US$97.49.
Gold fell $2.10 to US$1240.10 per ounce.
The US$ was stronger against most major currencies and the Australian dollar was weaker and is currently trading at US87.70.
VIX Volatility index rose 6.48% to 18.41.
US treasury markets were stronger — the yield on the 10 year bond fell five basis points to 2.649%.
European shares were weaker — the FTSE fell 0.43%, the German DAX was down 0.71% and the French CAC fell 0.34%.
European bonds were generally weaker — the yield on the Euro 10 year bond rose four basis points to 1.657% but the UK 10 year bond yield was four basis points lower and the yield on the French 10 year bond fell by eight basis points to 1.999%.
Base metal prices were generally weaker — aluminium was down 1.31%, copper was down 0.55% and zinc was down but nickel rose 1.25%.
Iron ore was unchanged at US$122.60 a tonne.
The Australian Industry Group’s performance of manufacturing index fell 0.9 points to 46.7 points from 47.6 points in December.
Main data is the US jobs report on Friday preceded by the ADP Employment Change number on Wednesday (the private sector number). A bad jobs number could potentially slow tapering (which may be seen as a good thing) but it would have to be bad. The last non-farm payrolls number was much weaker than expected but they continued with their tapering at last week’s meeting.
Other US numbers this week include Manufacturing PMI, construction spending, chain store sales, vehicle sales (Mon), factory orders, mortgage applications (Tue), ADP Employment number, non-manufacturing PMI (Wed) and initial weekly jobless numbers, balance of trade (Thurs)
In Australian economics we have ANZ job ads today and building permits. We have an RBA Meeting tomorrow. This week we also have retail sales, inflation, trade numbers.
In company news we have JB Hi-Fi interims today, Downer EDI results tomorrow, Tabcorpinterims Thursday, Fox and NewsCorp second quarter results on Friday.
We have Woolworths second quarter sales numbers on Thursday which will give a bit of a window on the December retail sales trends for the whole sector.
JB Hi-Fi (JBH) — Profit was up 10% to $90.3 million. Total sales were up 6.8% to $1.94 billion. Fully-franked interim divided of 55c up from 50c. After pre-releasing results last week, much of today’s figures were as expected. More importantly; JBH expects full year profit to be between $126-$129 million, with annual sales growth of between 6-8%. The company said “we continue to have many opportunities for growth in our traditional categories with the opening of new stores, market share gains and the expansion of our commercial division.”
DavidJones (DJS) — BID STILL POSSIBLE — DJS closed up 3.1% and Myer (MYR) closed up 1.2%last week following Myer’s proposed merger with David Jones. The potential merger would have created a business with more than $5 billionn in sales, but was rejected by the DJS board. MYR confirmed they had submitted an all-share takeover offer for DJS in October. DJS initially said that it had rejected the proposal because it was too low. This morning the press are reporting that DJS is still open to a higher offer from MYR. MYR hasn’t said whether they will return with a better offer.