Feb 27, 2014

Morning Market Report

Qantas is to cut 5000 more jobs and to cut capex by $1 billion in the 2015 and 2016 financial years.

The market is down 21 points. The Dow Jones was up 19 at 16,198. The market rose in early trade but then range traded around yesterday’s closing level before rising late in the session in a 100-point range. Housing data dominated the US market -- New home sales rose 9.6% in January to a five-and-a-half-year high with a seasonally adjusted annual rate of 468,000 units compared to the 400,000 units expected, easing recent market concerns. Earlier in the day, weekly mortgage applications fell to the lowest level in nearly two decades heading into the normally buoyant spring housing season US earnings results were generally positive -- Target rose after beating expectations. It said the December data breach took 2c off earnings and impacted sales, but sales trends have improved in recent weeks. Home improvement company Lowe's also rose after good numbers, continuing the housing theme after Home Depot’s good performance yesterday. Lots of companies are expected to report after the market close. The S&P was flat at 1845. Oil rose 0.68% to US$102.52.  Gold fell US$12.20 to US$1,330.50 per ounce. The US$ was stronger against most major currencies and the Australian dollar was weaker, currently trading at US89.70c. VIX Index fell 4.97% to 14.35. US treasury markets were stronger -- The yield on the 10-year bond fell 4 basis points to 2.664% following a successful auction of US$35 billion in five-year notes. European shares were weaker -- The UK FTSE fell 0.46%, the French CAC fell 0.40% and the German DAX fell 0.39%. European bonds were stronger -- The yield on the euro 10 -ear bond yield fell 3 basis points to 1.616% and the UK 10 year bond yield was also 2 basis points lower at 2.725%. Base metal prices were mixed -- Lead rose 0.79%, zinc rose 0.65% and aluminium was up 0.22% but nickel and copper were down 0.57% and 0.41% respectively. Iron ore fell US$1.70 to US$117.80 a tonne.

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