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Morning Market Report

Apr 14, 2014

Morning Market Report

The dollar finished slightly weaker, while local markets stayed stable.


The market is down 19 points. The Dow Jones was down 143 at 16,027 — the market opened lower and following an early rally, drifted lower throughout the afternoon. Volume was above average and the market traded in a 155 point range..

Technology stocks were again weaker and led the declines in global markets — Momentum stocks were heavily sold on high and questionable valuations. The same large US companies were affected including -1.7%, Google -1.9%, Netflix -2.4%, and LinkedIn -2.5%.

US Earnings — JP Morgan Chase reported a 19% fall in first-quarter profit, weighing on both European and US markets. But Wells Fargo reported better-than-projected net profit and lowered provisions for bad loans.

US Economic Data was generally good — Consumer sentiment rose to 82.6 in April from 80.0 previously, a nine-month high. Producer prices rose 0.5% and core price rose 0.6%, the most in nine months.

The Aussie dollar is weaker and is currently trading at US93.91c.

Base metals were generally weaker — with the exception of nickel up 1.88% and copper up 0.08%.

Iron ore fell US$2.20 to US$116.90 a tonne.


  • Coca-Cola Amatil (CCL 954c) — Shares were sold off 14.56% last Friday after the company issued a profit downgrade. It expects earnings to fall in the first half due to weakness in the Australian and Indonesian beverage markets. They has flagged a 15% fall in EBIT. They also expect challenging trading conditions to continue. It’s been almost a year (8th May 2013) since CCL shocked the market with a profit downgrade sending shares down 10.52%. Since then the share price hasn’t recovered and has continued tracking downwards. A few broker reports out today, surprisingly most of them saying the downgrade is disappointing but the stock is now trading at attractive levels.
  • CSL (6857c) — Deutsche Bank has downgraded to a Hold from Buy recommendation with a target price of 7320c. The downgrade came on the back of the threat from new extended half-life haemophilia therapies. They don’t see many catalysts going forward that can provide above-market growth in the next couple of years.
  • Kathmandu (KMD 344c) — Deutsche Bank has a Buy recommendation with a target price of 348c. They say the retailer is ‘well placed to benefit from a broad recovery in retailing conditions.’ They have undertaken a push into UK and Deutsche have upped their forecasts.
  • Glencore Xstrata has sold its interest in the Las Bambas copper mine (Peru) to a Chinese company for $US 6 billion cash deal, making it one of China’s largest deals in recent years.
  • Nickel hit a 13-month high on Friday at $US 17,495 a tonne, its highest since February 20 last year. The rise came on the back of Indonesia’s ban on ore exports which kept market supplies tight. Stocks with Nickel exposure – SIR, MBN.

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