Feb 10, 2014

Morning Market Report

Markets stay mostly stable as shareholders wait for the end of results season.

The market isup 42 points. The Dow Jones was up 166 points at 15,794 -- the market dipped early on but then steadily rose throughout the day in a 170 point range. Today’s rise came despite disappointing headline nonfarm payrolls data.  Payrolls increased 113,000, lower than the 185,000 expected, following a poor 75,000 (revised from 74,000) increase last month. Investors focused on the positives -- the unemployment rate fell to a five year low 6.6% from 6.7%, the participation rate ticked up and private payrolls were strong. Weather is also still potentially having an effect on hiring intentions. Most analysts didn’t believe the report was weak enough to deter the Fed from continuing with its tapering schedule. Other economic data included average earnings, which increased 0.2% as expected, and consumer credit, which rose to US$18.8 billion, ahead of forecasts of a fall to US$11.5 billion. The S&P rose 24 points to 1797. Oil was up 2.09%at US$99.88. Gold rose US$5.70 to US$1262.90 per ounce. The US$ was mixed against most major currencies. The Australian dollar is virtually unchanged from Friday’s levels after it strengthened following the RBA monetary statement which included upgrades to growth and inflation targets. It is currently trading at US89.56c. VIX Volatility index fell 11.26% to 15.29. US treasury markets were stronger -- the yield on the 10 year bond fell two basis points to 2.683%. European shares were stronger -- the FTSE rose 0.20%, the French CAC rose 0.96% and the German DAX was up 0.49%. European bonds were stronger -- the yield on the Euro 10 year bond fell four basis points to 1.660% and the UK 10 year bond yield was four basis points lower at 2.709%. Base metal prices were stronger -- led by nickel up 1.15%, zinc up 0.87% and aluminium up 0.34%. Copper rose 0.16%. Iron ore fell US$0.10 to US$120.90 a tonne. STORIES
  • G8 Education (GEM) -- Up 6% in early trade after announcing the purchase of 63 childcare and education centres.
  • Paladin Energy (PDN) -- Up 3% in early trade. Has advised that they are suspending production of their Kayelekera Mine in Malawi until the price of uranium recovers. The decision will preserve the remaining ore body until a sustained price recovery occurs and Paladin determines that production may be resumed on a profitable basis.
  • David Jones is said to be considering the replacement of the two directors who bought shares after the Myer merger approach. They have raised the subject in discussions with institutional shareholders.

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