The market is down 22 points. The Dow Jones was up 15 points at 16,921 — The market fell in the morning session and was down as much as 48 points before a recovery in the afternoon in what was considered cautious trading after the FOMC. Defensive sectors such as Consumer Staples, Health Care and Utilities were the best performers while Consumer Discretionary, Financials and Materials underperformed. The market closed near its highs on improving volume in a 65 point range.
US economic data was encouraging — Initial claims (for unemployment) fell 6,000 to 312,000, the Philadelphia Fed Index rose and the leading indicators were up 0.5%.
US bonds markets were weaker, with the yield on the 10 year bond rising four basis points to 2.618% following a 30 year TIP auction. (see Question of the Day).
Gold was up US$41.40 or 3.25%% at US$1314.10c a tonne following comments from Fed Chair Janet Yellen yesterday suggesting rates would stay low for the foreseeable future.
European shares were stronger — The German DAX was up 0.74%, the French CAC was up 0.72% and the UK FTSE was up 0.44%.
The Aussie dollar was a little stronger and is currently trading at US94.00c.
Oil was up US$0.46 or 0.43% to US$106.43 a barrel.
Base metals were mostly stronger — Aluminium rose 2.11% and nickel rose 0.2% but copper was down 0.16%. (These are three month prices).
Iron ore rose US$0.40 to US$90.70 a tonne.
Australian economic data today — Business sales indicators
Company events today — Westfield vote on Scentre.
No dividends today.
Global economic data tonight — European consumer confidence.
- Insurance Australia Group Limited (IAG 588c) — Has received the required regulatory approvals for acquisition of Wesfarmers insurance underwriting business.
- Resolute Mining (RSM 65c) has added a new 1.28moz gold resource at Buck Reef West, next to the Ravenswood processing facility in north-east Queensland, offering potential extension of the Ravenswood Operation. The Company has commenced a scoping study of the Buck Reef West deposit which it plans to complete within the next twelve months.
- Westfield Retail Trust (WRT 321c) and Westfield Group (WDC 1081c) — The proposed $70 million restructure looks set to go ahead after almost 76% of proxy shareholders supported the deal, above the 75% needed. In the abandoned vote last month only 74.1% of proxy votes supported the restructure. Shares are in a trading halt pending an announcement. WRT shares rose 1.3% yesterday while WDC shares were unchanged.
- Sydney Airports (SYD 438c) — Total passenger traffic for May was up 3.1% on the pcp, with domestic traffic up 2.1% on the pcp and international traffic (excluding domestic oncarriage) up 5.6% on the pcp.
- Energy Resources (ERA 133.5c) — Has downgraded the uranium resource estimate for a proposed new pit near its recently depleted Ranger mine in the Northern Territory by 2% The company, which is 68% owned by Rio Tinto, says the volume has risen but the grade has decreased, lowering the inferred resource to 32,620 tons from an earlier estimate of 33,297 tons. A final resource estimate and a pre-feasibility study are scheduled for the fourth quarter of 2014.
- Mantra Group begins trading at midday, with an IPO price of 180c. Mantra Group is an Australian accommodation operator, with 113 properties and over 11,600 rooms in hotels, resorts and serviced apartments across Australasia and Indonesia, servicing over 2 million guests each year. They operate the Peppers, Mantra and BreakFree brands.
- David Jones (DJS 390c) — DJS postponed its Scheme Meeting to vote on Woolworths’ proposal until July 14 2014. DJS postponed the meeting following lodgement of a substantial shareholder notice by Australian Retail Investments Pty Ltd (ARI) yesterday, confirming that entities associated with Solomon Lew hold 9.89% of David Jones shares.
- JB Hi-fi(JBH 1897c) — Closed up 1.28% yesterday after reaffirming full year profit growth of 8.3-10.8% to $126-129 million, despite sales growth of 5.3% (earlier forecast was 6-8%). Outgoing chief executive Terry Smart has also brought forward his departure date by two months. He will leave at the end of June, handing over to his successor Richard Murray.
- Asciano (AIO 555c) — Shares rose 6.1% yesterday after announcing they will cut 500 jobs to cut costs. AIO estimates they will have 3,600 full time employees by June 30. The cost of reducing their workforce is expected to be between $25-$30 million. AIO also maintained full year guidance of low single digit growth for its underlying net profit in 2013/14.
- Stockland (SGP 402c) — SGP boss Mark Steinert has indicated the company may not increase its $2.5 billion bid for rival property developer Australand to match a higher bid from Singapore. SGP shares closed up 0.75%.