Apr 30, 2014

Morning Market Report

Strong figures from markets worldwide off the back of new reporting.

The market is down 14 points. The Dow Jones was up 87 points at 16,535 -- the market rose throughout the morning in a volatile session and range-traded throughout the afternoon. Dominating factors were good earnings results, continued M&A news and a rebound in momentum stocks. Trading volume was average in a 110 point range. The Dow is within 100 points from its all-time high of 16,631.63. US earnings were generally better than expected in a season which has been neither very bad nor particularly good. 55% of S&P 500 companies have now reported first quarter earnings. Thomson Reuters data indicates 68% have beaten estimates while 22% have missed. Merck beat estimates after confirmation yesterday Britain's Reckitt Benckiser could acquire its consumer health business. The energy sector was also supported by above-consensus earnings from BP and Valero. Twitter was down more than 10% in after-hours trade after disappointing growth. The FOMC meeting has started -- a fourth US$10 billion reduction in asset purchases is expected to be announced at its conclusion tomorrow, to US$45 billion a month. US economic data was mixed -- consumer sentiment was below expectations (although the second highest reading since January 2008) but home prices beat forecasts. European markets were stronger -- The UK FTSE was up 1.04%, the French CAC was up 0.83% and the German DAX was 1.46% higher. Shares rose after some strong earnings from Nokia and Deutsche Bank, and BP also announced an increase in dividend. Peugeot Citroen launched the second part of a 3 billion euro ($4.2 billion) capital increase to fund its recovery plan and tie-up with China's Dongfeng. Its shares rose 10%. The Aussie dollar was stronger andis currently trading at US92.68c. Oil rose US$0.44 or 0.44% to US$101.28 a barrel on concerns about supply disruptions following a heightening of tensions in Libya. Iron ore fell US$0.30 to US$108.30 a tonne. Base metals were weaker -- lead fell 1.29%, aluminium fell 0.94% and zinc fell 0.57%. US earnings -- Twitter -- down 10.56% in after-hours trade, Ebay -- down 4.20% in after-hours trade, Ameriprise financial -- up 5.84% Global economic data -- UK first quarter growth was 0.8%, slightly less than forecast; Spanish unemployment fell to 25.9%, down from 26.0% but above market expectations; European economic sentiment index from the EC showed a slip in the euro area but a rise in the European Union as a whole. STORIES
  • Aurizon (AZJ) -- March Quarter rail volumes -- 48.6 million tonnes of coal during the quarter, up from 43.6 million tonnes for the same period a year ago. AZJ says it expects to achieve financial yearhaulage of between 207 and 212 million tonnes for 2013/14, despite the impact of tropical cyclone Ita. The increase in coal volumes offset a 3% decline in freight volumes during the quarter.
  • Brambles (BXB) -- Third quarter trading update. BXB says it is on track to achieve its full year profit guidance after increasing sales 6% during the first three quarters. It expects to make between $US930 million and $US965 million for the year to June 30, thanks to solid revenue growth. It recorded sales revenue of $US3.97 billion for the nine months to March 31, up 6%.
  • Woolworths (WOW) -- Third quarter sales have come in at $15.19 billion up 5.3% on year or 5.9% Easter adjusted. The result was lower than an expected 6.5% and below $15.33 billion. The result was driven largely by Australian food and liquor business, which was up by 5.1% above an expected 3%. Sales from the company's petrol business were also up 5.1% to $1.82 billion. Online sales increased more than 50%. Hotels business lifted sales 0.6% to $357 million. Sales from the NZ supermarkets were up 16% to $1.33bn. Sales from Masters Home improvement division were up 29% to $374 million.
  • Harvey Norman (HVN) -- Sales for the nine months ended 31st March. Sales totalled $4.33 billion up 4%. Like for like sales for the nine months ended 31 March 2014 increased by 5.2%.
  • Stockland (SGP) -- Says it is on track to hit 6% EPS growth, which comes in at the upper end of guidance. It will also look to sell down its stake in Australand (ALZ).
  • Tabcorp Holdings (TAH) -- Has increased third quarter group revenue on the back of growth in its wagering and media businesses. Revenue up by 2.5% to $492.3 million. Wagering revenue up by 2.7% to $377.2 million. Media and international up 4.2% to $54.3 million. Gaming services up 0.4%%.
  • Lynas Corp (LYC) -- Shares have gone into a trading halt pending the release of an announcement about a proposed financing transaction.

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