Stocks for Breakfast

29 Oct 09

Market Wrap for Thursday 29th October 2009

The Australian sharemarket has extended its decline to a fourth day, with a global retreat pummelling mining stocks and banks. At the close, the benchmark S&P/ASX200 index was down 110.4 points, or 2.4 per cent, at 4574.7, while the broader All Ordinaries fell 112.1 points, or 2.4 per cent, to 4575.2. On a sector-by-sector basis, materials were down 3.4 per cent, gold stocks sank 4.1 per cent, financials were off 2.8 per cent and energy fell 2.9 per cent.

A revival in bond markets and access to Asian lenders are driving Australia’s biggest companies away from the clutches of the country’s top banks, which could trim margin gains and loan-growth prospects for the Big Four. Companies are keen to diversify funding for the $50 billion they annually need to refinance, after spending the past year battling to slash debt by selling new shares as corporate bond markets froze.

There is more choice now and borrowing is becoming cheaper, with Asian banks eager to expand their loan books in Australia and with debt markets opening up. The main attraction of the bond markets is the longer-dated debt available. Banks typically lend for three years, which puts pressure on companies to constantly refinance. At the peak of the financial crisis, banks made it even tougher by hiking loan fees.

U.S. stocks tumbled in a broad sell-off on Wednesday, sending the benchmark S&P 500 lower for a fourth straight day, after weak data on new home sales heightened concerns about the pace of the economic recovery. Financials, technology, materials and industrial sectors, which underpinned the market’s advance from March, bore the brunt of the slide as investors reassessed their bets. Sales of newly built single-family homes unexpectedly fell 3.6 percent last month, according to a Commerce Department report. Seperately, data from the Mortgage Bankers Association showed demand for mortgages has fallen for the past three weeks.

The Nasdaq also logged its fourth straight daily drop. Wednesday’s sell-off marked the broader market’s worst day of losses in nearly a month. The S&P 500 is now up 54.1 percent from the 12-year closing low of March 9. At Wednesday’s close, it showed a drop of 5.04 percent from its post-March closing peak reached a week ago on Oct. 19.

The Dow Jones industrial average dropped 119.48 points, or 1.21 percent, to 9,762.69 – its third triple-digit drop in four days. The Standard & Poor’s 500 Index fell 20.78 points, or 1.95 percent, to 1,042.63. The Nasdaq Composite Index slid 56.48 points, or 2.67 percent, to 2,059.61. During the session, both the S&P 500 and the Nasdaq broke below key technical levels as the sell-off accelerated. Both indexes closed below their 50-day moving average for the first time since July, a bearish technical signal.

Additionally, the S&P 500 wiped out its gains for October and is now on the verge of snapping a string of seven months of gains. The CBOE Volatility Index, Wall Street’s favorite fear gauge, ended up 12.5 percent, its biggest one-day percentage gain since August.

Source: Reuters, Fairfax

The Australian sharemarket has extended its decline to a fourth day, with a global retreat pummelling mining stocks and banks. At the close, the benchmark S&P/ASX200 index was down 110.4 points, or 2.4 per cent, at 4574.7, while the broader All Ordinaries fell 112.1 points, or 2.4 per cent, to 4575.2. On a sector-by-sector basis, materials were down 3.4 per cent, gold stocks sank 4.1 per cent, financials were off 2.8 per cent and energy fell 2.9 per cent.

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28 Oct 09

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Market Wrap for Wednesday 28th October 2009

Australian stocks sank to a three-week low, as investors dumped financial stocks in the wake of National Australia Bank’s annual results. The benchmark S&P/ASX200 index ended down for a fifth day in the past six, losing 68.4 points, or 1.4 per cent, at 4685.1, while the broader All Ordinaries fell 67.6 points, or 1.4 per cent, to 4687.3. Among the sectors, financial stocks lost 2.3 per cent, materials dropped 1.3 per cent and energy was down 1 per cent. Telcos bucked the trend for a second day and gained 1.6 per cent.

Inflation numbers coming in slightly above expectations solidified views that a rise in interest rates is likely when the Reserve Bank meets next week, but markets are not expecting anything more than a 0.25 percentage point rise. Australia’s headline consumer price index rose 1 per cent in the September quarter, for an annual rate of 1.3 per cent, the Australian Bureau of Statistics said today.

The trimmed mean CPI rose 0.8 per cent in the September quarter, for an annual growth rate of 3.2 per cent. The weighted median CPI rose 0.8 per cent in the September quarter, with an annual rise 3.8 per cent. The median market forecast was for the headline CPI to have risen by 0.9 per cent in the September quarter, for an annual pace of 1.2 per cent. Economists had expected the average of the two underlying measures of inflation to rise by 0.7 per cent in the September quarter, for an annual pace of 3.45 per cent.

The S&P 500 and the Nasdaq fell on Tuesday as investors booked profits following the stock market’s recent run-up, while a weaker-than-expected reading on a measure of consumer confidence raised doubts about spending. On the economic front, the Conference Board’s index of consumer confidence fell to 47.7 in October, weaker than economists had forecast. The data showed consumers were increasingly concerned about job market conditions.

The Dow Jones industrial average gained 14.21 points, or 0.14 percent, to 9,882.17. The Standard & Poor’s 500 Index fell 3.54 points, or 0.33 percent, to 1,063.41. The Nasdaq Composite Index declined 25.76 points, or 1.20 percent, to 2,116.09.

Source: Reuters, AAP, Fairfax

Australian stocks sank to a three-week low, as investors dumped financial stocks in the wake of National Australia Bank’s annual results. The benchmark S&P/ASX200 index ended down for a fifth day in the past six, losing 68.4 points, or 1.4 per cent, at 4685.1, while the broader All Ordinaries fell 67.6 points, or 1.4 per cent, to 4687.3. Among the sectors, financial stocks lost 2.3 per cent, materials dropped 1.3 per cent and energy was down 1 per cent. Telcos bucked the trend for a second day and gained 1.6 per cent.

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27 Oct 09

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Market Wrap for Tuesday 27th October 2009

The Australian stock market has ended the day sharply lower as profit takers sold down, with mining and energy stocks hurt by weaker commodities prices. At the close, the benchmark S&P/ASX200 index was down 76.8 points, or 1.6 per cent, at 4753.5, while the broader All Ordinaries fell 77.7 points, or 1.6 per cent, to 4754.9. Most sectors were down, with materials stocks falling 2.4 per cent, financials down 1.4 per cent and the industrials sub-index losing 1.6 per cent. Telcos bucked the trend, rising 1.3 per cent.

Business confidence jumped to a seven year high in the September quarter, as the “remarkable turnaround” seen since sentiment bottomed in early 2009 continued. Business conditions also continued to improve, although at a more subdued pace. The National Australia Bank monthly survey of business confidence grew by 20 points to plus-16 points in the three months to September, to levels last seen in early 2002.

“Business confidence in the third quarter jumped sharply,” NAB group chief economist Alan Oster said in statement. “New data in this survey point to a significant jump in both near and long term business expectations – with longer term expectations, in particular, returning to around long run average levels.

U.S. stocks fell for a second straight session on Monday as investors ditched home builders and financials on fears lawmakers may let a federal home buyer tax credit expire, while commodity shares succumbed to pressure from the higher U.S. dollar.

Trading was choppy. Stocks initially started on firmer footing, with indexes up more than 1 percent shortly after the open, but the bounce quickly faded as the U.S. dollar rebounded and investors fretted about the financial sector’s prospects. The tax credit has become a hot button issue and Wall Street sold off after an incorrect media headline said research firm, ISI Group, had written the tax credit probably would not be extended when it expires Nov. 30.

The Dow Jones industrial average dropped 104.22 points, or 1.05 percent, to 9,867.96. The Standard & Poor’s 500 Index shed 12.65 points, or 1.17 percent, to 1,066.95. The Nasdaq Composite Index fell 12.62 points, or 0.59 percent, to 2,141.85.

The S&P 500 is now up 57.7 percent from the 12-year closing low of March 9, having slipped from its recovery peak when it was up 62.3 percent from that low.

Source: Reuters, AAP, Fairfax

The Australian stock market has ended the day sharply lower as profit takers sold down, with mining and energy stocks hurt by weaker commodities prices. At the close, the benchmark S&P/ASX200 index was down 76.8 points, or 1.6 per cent, at 4753.5, while the broader All Ordinaries fell 77.7 points, or 1.6 per cent, to 4754.9. Most sectors were down, with materials stocks falling 2.4 per cent, financials down 1.4 per cent and the industrials sub-index losing 1.6 per cent. Telcos bucked the trend, rising 1.3 per cent.

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27 Oct 09

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Market Wrap for Monday 26th October 2009

The Australian share market has closed lower following a weaker materials sector and caution among local investors after a poor lead from offshore. At the close, the benchmark S&P/ASX200 index was down 29.1 points, or 0.6 per cent, at 4830.3, while the broader All Ordinaries dropped 27.1 points, or 0.6 per cent, to 4832.6.

Among the sectors, materials stocks fell 1 per cent, energy shares fell 0.9 per cent, while financial stocks were down 0.4 per cent. IG Markets dealer Chris Weston said investors were not getting involved in risky stocks.

‘‘Banks have come back from the lows today and seem to be a little bit mixed and we’ve seen the materials stocks taking a few points out,’’ he said. ‘‘Just looking at the way the sectors are performing, it does say that people are looking to position themselves at least for now in a slightly defensive pose.’’

In economic news, producer price inflation came in less than expected for the September quarter, suggesting Wednesday’s consumer price inflation numbers may also be benign. ANZ Banking Group declined 5 cents to $23.80 ahead of its full-year earnings report on Thursday.

The bank also promised not to slug its 800,000 home borrowers with variable interest rate rises above official moves by the Reserve Bank. National Australia Bank, which reports full-year earnings on Wednesday, slipped 15 cents to $30.76 and Commonwealth Bank dropped 26 cents to $55.98. Westpac bucked the trend and gained 23 cents to $27.53.

CSR calls for cash

In news today, CSR has begun positioning itself for its planned demerger next year by raising $375 million in fresh equity capital. Its shares were suspended, last trading at $1.985. Bendigo and Adelaide Bank shares fell 13 cents to $9.77 after it called on ratings agencies to upgrade its credit ranking, saying its funding risks are substantially lower than at the outset of the global financial crisis. A compensation fund established by James Hardie Industries could run out of funds by mid-2010, figures show. James Hardie stock closed down 25 cents at $7.31.

Wesfarmers hardware arm, Bunnings, has refuted suggestions from rival Woolworths that there are areas of the hardware sector not being serviced. Wesfarmers added 34 cents to $28.60, Woolworths fell 23 cents to $29.08, JB Hi-Fi rose $1.16, or 5.6 per cent, to $21.71 and Harvey Norman added 9 cents to $4.20. Woodside fell 95 cents, or 1.8 per cent, at $50.85, Santos fell 11 cents to $15.44, while Oil Search was down 1 cent at $6.10.

Newmont was 8 cents weaker at $4.89, Lihir Gold fell 1 cent to $3.22 and Newcrest lost 41 cents to $35.06. The most-traded stock by volume was drug-administering technology company OBJ, with 214.4 million shares worth $4.4 million changing hands. Its shares were up 1.2 cents, or 85.7 per cent, at 2.6 cents. Market turnover was 2.71 billion shares worth $4.15 billion, with 448 stocks up, 652 down and 361 unchanged.

Source: Reuters, Bloomberg, Fairfax

The Australian share market has closed lower following a weaker materials sector and caution among local investors after a poor lead from offshore. At the close, the benchmark S&P/ASX200 index was down 29.1 points, or 0.6 per cent, at 4830.3, while the broader All Ordinaries dropped 27.1 points, or 0.6 per cent, to 4832.6.

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26 Oct 09

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Market Wrap for Friday 23rd October 2009

The Australian sharemarket ended the week on a high note, boosted by news Wesfarmers-owned Coles gained an upper-hand over rival Woolworths. At the close, the benchmark S&P/ASX200 index was up 46.6 points, or 1 per cent, at 4859.4, while the broader All Ordinaries rose 40.9 points, or 0.8 per cent, to 4859.7. Financial stocks rose 1.4 per cent, materials stocks ganied 1 per cent, while energy shares lost 0.9 per cent.

The Australian and New Zealand headed for their third week of gains on speculation the nations’ central banks will increase interest rates faster than other developed countries. Australia’s currency approached the highest since August 2008 as Asian stocks rose and a report showed the nation’s export prices fell at a slower pace in the three months through September. New Zealand’s dollar was near the strongest since July 2008 after central bank Governor Alan Bollard said this week that a strong currency won’t impede raising borrowing costs.

“Commodity-producing nations such as Australia are considered the most promising in terms of economic growth,” said Toshiya Yamauchi, a Tokyo-based manager at the foreign- exchange margin trading department at Ueda Harlow Ltd. “People are expecting additional rate hikes in Australia.”

U.S. stocks rose on Thursday after quarterly results from insurer Travelers and regional bank PNC Financial gave a boost to financial stocks. Financials were among the top gainers after insurer Travelers Cos Inc posted gains after it raised its full-year outlook and regional bank PNC Financial Services Group Inc shares jumped 12.7 percent to $50.65 on far better-than-expected quarterly earnings.

Adding to the positive tone, New York Fed President William Dudley said the Federal Reserve may not lose money on the emergency programs it put in place to fight the financial crisis. The Dow Jones industrial average gained 131.95 points, or 1.33 percent, to 10,081.31. The Standard & Poor’s 500 Index rose 11.51 points, or 1.06 percent, to 1,092.91. The Nasdaq Composite Index added 14.56 points, or 0.68 percent, to 2,165.29.

Source: Reuters, Bloomberg, Fairfax

The Australian sharemarket ended the week on a high note, boosted by news Wesfarmers-owned Coles gained an upper-hand over rival Woolworths. At the close, the benchmark S&P/ASX200 index was up 46.6 points, or 1 per cent, at 4859.4, while the broader All Ordinaries rose 40.9 points, or 0.8 per cent, to 4859.7. Financial stocks rose 1.4 per cent, materials stocks ganied 1 per cent, while energy shares lost 0.9 per cent.

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21 Oct 09

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Market Wrap for Wednesday 21st October 2009

The Australian share market ended the day marginally lower as stronger energy stocks failed to counter a negative lead from the US. At the close, the benchmark S&P/ASX200 index was down 7.6 points, or 0.2 per cent, at 4838.6, while the broader All Ordinaries fell 6.6 points, or 0.1 per cent, to 4846.2. Among the major sub-indexes, financials fell 0.5 per cent while materials were down 0.4 per cent. Energy stocks however gained 0.5 per cent.

Moss Capital, formed by ex-Macquarie Group Ltd. and Lehman Brothers Holdings Inc. bankers, is close to completing a A$160 million ($148 million) fund that will invest in Australian property. The Sydney-based funds management and advisory firm, which started in August, may finish raising capital in two months for another three real-estate funds, Chief Executive Officer Glenn Willis said. He declined to specify the funds’ targeted sizes.

“Across Australia, the demographics are favorable, the supply and demand fundamentals are favorable,” said Willis, the former head of Lehman in Australia. “Put all that together and there’s a real opportunity. We’re seeing a lot of high-quality development opportunities come across our desk.” Willis and Moss Capital Chairman Bill Moss, the ex-head of banking and property at Macquarie, are seeking to raise money locally and overseas as the domestic economy rebounds, stocks surge, and the Australian dollar rallies to a 14-month high.

U.S. stocks retreated from 12-month highs on Tuesday as disappointing housing and inflation data prompted investors to book recent gains despite strong results from bellwethers including Apple and Caterpillar. New construction of U.S. homes rose less than expected in September and U.S. producer prices posted an unexpected decline, both pointing to an anemic economic recovery.

The blue-chip Dow Jones industrial average dropped 50.71 points, or 0.50 percent, to end at 10,041.48. The Standard & Poor’s 500 Index fell 6.85 points, or 0.62 percent, to 1,091.06. The Nasdaq Composite Index shed 12.85 points, or 0.59 percent, to close at 2,163.47.

In spite of Tuesday’s decline, the stock market’s trend in the third quarter has been mostly positive. U.S. stocks have risen steadily as S&P 500 companies have largely exceeded earnings expectations. Through noon Tuesday, with 95 of the benchmark S&P 500 companies having reported earnings, 79 percent have beaten expectations and only 11 percent have fallen behind, according to Thomson Reuters data.

Source: Reuters, Bloomberg, Fairfax

The Australian share market ended the day marginally lower as stronger energy stocks failed to counter a negative lead from the US. At the close, the benchmark S&P/ASX200 index was down 7.6 points, or 0.2 per cent, at 4838.6, while the broader All Ordinaries fell 6.6 points, or 0.1 per cent, to 4846.2. Among the major sub-indexes, financials fell 0.5 per cent while materials were down 0.4 per cent. Energy stocks however gained 0.5 per cent.

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20 Oct 09

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Market Wrap for Tuesday 20th October 2009

The Australian share market has ended the day more than 1 per cent higher, led by rises in miners and the banks and buoyed by a rally on Wall Street. At the close, the benchmark S&P/ASX200 index was up 53.4 points, or 1.1 per cent, at 4846.2 points, while the broader All Ordinaries index rose 51 points, or 1.1 per cent, to 4842.8 points.

Among the major sectors, materials led the charge, rising 2.1 per cent. Financial stocks gained 1.1 per cent and energy lifted 0.3 per cent.

The Reserve Bank of Australia has not given any direct hints about the future path of interest rates in the minutes of its board’s monthly monetary policy meeting. The minutes listed the pros and cons of making the decision, which had been mooted by the minutes of earlier meetings. There were some cons, notably the uncertainty surrounding the outlook for most of the developed world “and the possibility that another downturn in such countries could not be ruled out”.

The board also noted that the unexpected strength of the domestic economy may have been largely because the fiscal stimulus measures had been more effective than forecast, “which left open the attendant risk that activity might slow as that stimulus faded”. The RBA said the board members believed the risks in waiting to raise rates had increased, notably because underlying inflation was not only still above the two to three per cent target but the expected trough over the coming year was now higher than previously thought.

Moreover, the economy was expected to grow “close to trend” (presumably the long run average of just over three per cent per annum) though 2010, barring any setbacks, despite a fall in gross domestic income caused by the falling terms of trade.

Gold rebounded as the dollar declined, bolstering the appeal of the precious metal as an alternative investment. Silver prices also gained. The dollar dropped as much as 0.4 per cent against a basket of six major currencies. Gold has climbed 20 per cent this year as investors sought to protect their wealth from the greenback’s slump. The metal, heading for a ninth straight annual gain, reached a record $US1072 an ounce on October 14. Gold futures for December delivery rose $US6.60, or 0.6 per cent, to $US1058.10 on the Comex division of the New York Mercantile Exchange. The metal has gained 4.8 per cent this month.

U.S. stocks rose to fresh 12-month highs on Monday as optimistic investors rode a wave of solid quarterly earnings, which continued after the session’s close when Apple Inc’s shares jumped on its results. The Dow Jones industrial average added 96.28 points, or 0.96 percent, to end at 10,092.19. The Standard & Poor’s 500 Index gained 10.23 points, or 0.94 percent, to 1,097.91. The Nasdaq Composite Index rose 19.52 points, or 0.91 percent, to 2,176.32.

The Dow industrials and the S&P 500 closed at levels not seen since October 2008, while Nasdaq is at an almost 13-month closing high.

Source: AAP, Reuters, Bloomberg, Fairfax

The Australian share market has ended the day more than 1 per cent higher, led by rises in miners and the banks and buoyed by a rally on Wall Street. At the close, the benchmark S&P/ASX200 index was up 53.4 points, or 1.1 per cent, at 4846.2 points, while the broader All Ordinaries index rose 51 points, or 1.1 per cent, to 4842.8 points.

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19 Oct 09

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Market Wrap for Monday 19th October 2009

The Australian sharemarket has ended the day nearly 1 per cent lower, weighed down by the banks and following a weak lead from Wall Street. At the close, the benchmark S&P/ASX200 index was down 43.6 points, or 0.9 per cent, at 4792.8, while the broader All Ordinaries fell 40.8 points, or 0.8 per cent, to 4801.8 points.

By sector, financials dropped 1.8 per cent, materials lost 0.5 per cent and energy share were 0.9 per cent lower. Gold stocks bucked the trend, rising 1.1 per cent.

Earlier, Austock Securities senior client adviser and strategist Michael Heffernan said the negative start to the local trading day was ‘‘not surprising’’ given that there was ‘‘no real positive lead’’ from either Wall Street or commodities markets over the weekend. ‘‘They are always the double-barrel trigger for our market,’’ Mr Heffernan said.‘‘I guess a bit of market fatigue coupled with no external lead has led to an easing in the market today.’’ ‘‘Six of the top 20 stocks in the downward direction are all banks and financial stocks,’’ he said.

Banks, miner sag

Local banks pulled the market down, with ANZ Banking Group falling 75 cents, or 3.05 per cent to $23.81, National Australia Bank easing 65 cents, or 2.06 per cent to $30.93, Westpac was down 44 cents, or 1.63 per cent to $26.52, and Commonwealth Bank lost 84 cents or 1.52 per cent to $54.44.

AMP Ltd was down 16 cents at $6.49 while Macquarie Group had fallen $1.11 to $53.98.

At 1207 AEDT, mining stocks were lower, too, with BHP Billiton losing 28 cents to $38.92, while rival Rio Tinto backtracked 95 cents, or 1.46 per cent to $63.97.

In the US on Friday, stocks ended a strong week with a flash of selling after Bank of America Corp and General Electric Co signalled that businesses and consumers still were struggling to pay off debt.

The price of light sweet crude for November delivery closed in New York at $US78.53 a barrel, up 95 cents on the day on a jump in industrial production in the US. Oil now is trading at its highest level since October 2008.

By 1211 AEDT, major oil stocks were lower, however. Santos lost 24 cents, or 1.54 per cent, to $15.38, and Woodside Petroleum fell 52 cents, or 0.99 per cent to $52.20.

Oil Search entered a trading halt for a share placement to institutional investors – said to be around $1 billion – after a deal to sell a 3.5 per cent interest in the PNG liquefied natural gas project to International Petroleum Investment Corporation fell over.

Polaris Metals jumped 9.7 per cent to 73.5 cents after Lion-Asia Resources stepped up a bidding war against Mineral Resources, raising its offer to 70 cents a share cash, against the 65.7 cents value of Mineral Resources’ sweetened cash and share offer as of last Friday.

Energy Developments rose nearly 5 per cent to $2.52 a share after it said it had received a takeover proposal from private equity firm Pacific Equity Partners at $2.65 a share. The renewable energy company said the offer was too cheap.

Gold stocks shine

By 1214 AEDT, the spot price of gold in Sydney was $US1048.70 per fine ounce, up 27 US cents per fine ounce from Friday’s closing price of $US1048.43.

Also in the news today, gaming group Tabcorp gained six cents to $7.20 after it announced it increased revenue in the September quarter by 4.4 per cent. Tabcorp was recently up 13 cents at $7.27.

Stock broker and financial advisory firm Bell Financial Group reported that profits for the nine months to September surged 52 per cent over the previous corresponding period on increases in transaction volumes. Bell Financial rose 9.5 cents, or 8.96 per cent, to $1.155.

Renewable energy provider Energy Developments has received a $415 million takeover offer from private equity firm Pacific Equity Partners. Shares in Energy Developments were up eight cents, or 3.32 per cent, at $2.49.

Retailers mixed

Major retail stocks were mixed, with big grocer Woolworths up 11 cents at $29.86, Wesfarmers, owners of Coles supermarkets, down 24 cents at $25.81, and JB Hi-Fi losing 16 cents, or 0.77 per cent to $20.53.

Major media stocks were lower, with Fairfax Media easing 4.5 cents to $1.68, News Corporation falling 23 cents to $15.88 and its non-voting scrip down 25 cents to $13.65.

Qantas fell one cent to $3.01 and Virgin Blue was up 0.5 cent to 49.5 cents.

The top traded stock by turnover was Lakes Oil, with 63.4 million shares changing hands for a value of $824,818. Lakes Oil’s shares gained 0.2 cent, or 16.67 per cent, to 1.4 cents.

Overall turnover was 1.2 billion, worth $1.8 billion, with 425 stocks up, 551 down and 344 steady.

On the Sydney Futures Exchange, the December share price index contract was 65 points lower at 4,785, on a volume of 13,977 contracts.

Source: AAP, Reuters

The Australian sharemarket has ended the day nearly 1 per cent lower, weighed down by the banks and following a weak lead from Wall Street. At the close, the benchmark S&P/ASX200 index was down 43.6 points, or 0.9 per cent, at 4792.8, while the broader All Ordinaries fell 40.8 points, or 0.8 per cent, to 4801.8 points.

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19 Oct 09

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Market Wrap for Friday 16th October 2009

The Australian sharemarket ended in negative territory today as major lenders ran out of steam, but was still up for the week. At the close, the benchmark S&P/ASX200 index was down 23.5 points, or 0.5 per cent, at 4836.4, while the broader All Ordinaries lost 19.9 points, or 0.4 per cent, at 4842.6 points.

Billionaire investor and philanthropist George Soros said on Thursday that the world’s current “currency arrangements” are fraught with danger and that the world needs global regulation. Soros, who runs hedge fund firm Soros Fund Management and has made his reputation with bold currency bets, said the U.S. dollar ought to be falling in value against the Chinese currency to allow the United States to contain its current account deficit.

However, Soros said because the renminbi is tied to the greenback, the Chinese currency is constantly undervalued leaving the dollar to sink against the world’s other major currencies. The dollar has lost about 7 percent this year against a basket of the world’s major currencies.

Late-day strength drove U.S. stocks to 2009 highs on Thursday as rising oil prices lifted energy shares, eclipsing the banking sector’s retreat after investors panned earnings from Goldman Sachs and Citigroup. Indexes once again set highs for the year and the Dow held above the 10,000 mark after breaching it for the first time in a year on Wednesday.

U.S. crude oil futures hit a one-year high, rising $2.40, or more than 3 percent, to settle at $77.58 a barrel after data showed gasoline and distillate inventories fell sharply in the latest week. Energy shares rose, with Chevron Corp up 1.6 percent at $76.69. While Goldman Sachs Group and Citigroup Inc’s results exceeded forecasts, they failed to meet the lofty standard set on Wednesday by JPMorgan Chase & Co, the first major bank to report earnings.

The Dow Jones industrial average added 47.08 points, or 0.47 percent, to end at 10,062.94. The Standard & Poor’s 500 Index gained 4.54 points, or 0.42 percent, to 1,096.56. The Nasdaq Composite Index edged up 1.06 points, or 0.05 percent, to close at 2,173.29.

Source: Fairfax, Reuters

The Australian sharemarket ended in negative territory today as major lenders ran out of steam, but was still up for the week. At the close, the benchmark S&P/ASX200 index was down 23.5 points, or 0.5 per cent, at 4836.4, while the broader All Ordinaries lost 19.9 points, or 0.4 per cent, at 4842.6 points.

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16 Oct 09

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Market Wrap for Thursday 15th October 2009

The Australian share market rallied to close at a one-year high, as strong earnings from US investment bank JPMorgan encouraged investors that company profits are likely to improve. But the market fell back from earlier highs as some investors judged it a good price to sell stocks, and as comments from Reserve Bank Governor Glenn Stevens suggested further rate rises would come sooner rather than later. At the close, the benchmark S&P/ASX200 index was up 28.8 points, or 0.6 per cent, at 4859.9, while the broader All Ordinaries had added 28.5 points, or 0.6 per cent, to 4862.5 points.

Gold prices declined in New York after a rally to a record spurred some investors to sell the precious metal. The 14-day relative-strength index for gold futures was above 70 for the third straight day, a signal that prices may retreat in the short term. Gold reached the all-time high of $US1072 an ounce as the dollar slumped to a 14-month low against a basket of six major currencies. The metal has closed above $US1000 every session this month.

The Dow industrials pierced the 10,000 level on Wednesday for the first time in a year on surprisingly robust company results and better-than-expected retail sales. With major indexes up more than 1 percent, the Dow’s milestone shows how far the market has come since last year when investors fled collapsing financial markets as the economic outlook soured. Analysts said the more than 50 percent rise off the 12-year lows hit in March could encourage more investors to buy stocks.

The Dow Jones industrial average rose 144.80 points, or 1.47 percent, to 10,015.86. The Standard & Poor’s 500 Index gained 18.83 points, or 1.75 percent, to 1,092.02. The Nasdaq Composite Index put on 32.34 points, or 1.51 percent, to 2,172.23.

Source: Fairfax, Reuters, Bloomberg

The Australian share market rallied to close at a one-year high, as strong earnings from US investment bank JPMorgan encouraged investors that company profits are likely to improve. But the market fell back from earlier highs as some investors judged it a good price to sell stocks, and as comments from Reserve Bank Governor Glenn Stevens suggested further rate rises would come sooner rather than later. At the close, the benchmark S&P/ASX200 index was up 28.8 points, or 0.6 per cent, at 4859.9, while the broader All Ordinaries had added 28.5 points, or 0.6 per cent, to 4862.5 points.

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14 Oct 09

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Market Wrap for Wednesday 14th October 2009

The Australian share market has ended nearly 1 per cent higher, buoyed by the banks and energy stocks. At the close, the benchmark S&P/ASX200 index was up 45.4 points, or 0.9 per cent, at 4831.1, while the broader All Ordinaries added 44.2 points, or 0.9 per cent, to 4834. In economic news, the Westpac-Melbourne Institute survey of consumer sentiment showed confidence has hit the highest in more than two years despite the rise in official interest rates last week.

The U.S. dollar struck a 14-month low against the euro on Wednesday, sending gold to record prices and pushing oil past the 2009 high of $75 a barrel and on track for a fifth day of gains. The Australian dollar shot to a new high today, after a reading of consumer confidence came in strong and as the sell-off in the US dollar continues. The dollar jumped to 91.34 US cents in afternoon trade, rising 0.8 per cent to its highest since early August 2008.

U.S. stocks weakened on Tuesday as disappointing sales from Johnson & Johnson (JNJ.N) stirred jitters about the strength of earnings, snapping the S&P 500’s six-day winning streak. With the last two earnings periods characterized by cost cutting, investors have been hopeful that companies may start to show revenue growth in third-quarter results or improved outlooks.

The Dow Jones industrial average .DJI declined 14.74 points, or 0.15 percent, to end at 9,871.06. The Standard & Poor’s 500 Index .SPX slipped 3.00 points, or 0.28 percent, to 1,073.19. But the Nasdaq Composite Index .IXIC inched up just 0.75 of a point, or 0.04 percent, to 2,139.89.

Source: Fairfax, Reuters

The Australian share market has ended nearly 1 per cent higher, buoyed by the banks and energy stocks. At the close, the benchmark S&P/ASX200 index was up 45.4 points, or 0.9 per cent, at 4831.1, while the broader All Ordinaries added 44.2 points, or 0.9 per cent, to 4834. In economic news, the Westpac-Melbourne Institute survey of consumer sentiment showed confidence has hit the highest in more than two years despite the rise in official interest rates last week.

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13 Oct 09

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Market Wrap for Tuesday 13th October 2009

The Australian share market has ended 1 per cent higher, boosted by banking and commodity stocks, and following a positive lead from world markets overnight. At the close, the benchmark S&P/ASX200 index was up 45.9 points, or 1 per cent, at 4785.7, while the broader All Ordinaries had gained 44.3 points, or 0.9 per cent, at 4789.8. Among the sectors, financial stocks were up 1.4 per cent, materials rose 1.3 per cent and energy shares gained 0.5 per cent.

Australian business confidence declined in September for the first time in five months as sentiment among manufactures and retailers cooled. The confidence index fell 4 points to 14 from August, when it reached the highest level since October 2003, according to a National Australia Bank Ltd. survey of more than 400 companies questioned between Sept. 21 and Sept. 25 and released in Sydney today. A figure above zero shows optimists outnumber pessimists.

Rising business confidence during the first eight months of this year was one of the reasons central bank Governor Glenn Stevens increased the benchmark interest rate from a half- century low of 3 percent last week. Sentiment eased the most among manufacturing companies because of this year’s 29 percent surge in the Australian dollar, today’s report said.

The Dow inched closer to the 10,000 level Monday, carving out a fresh one-year high despite a choppy day on Wall Street as strength in banks and commodities vied with weakness in technology. The Dow Jones industrial average (INDU) gained 20 points, or 0.2%, after rising as high as 9931.82 in the morning. The S&P 500 (SPX) index gained nearly 5 points, or 0.4%, and the Nasdaq composite (COMP) was barely changed.

The Dow is moving closer to 10,000, a key psychological level that could trigger a more aggressive wave of buying — or a big selloff. The Dow last crossed 10,000 on Oct. 7, 2008, when it briefly touched 10,124.03. The Dow last closed above 10,000 on Oct. 3, 2008, when it ended at 10,325.38.

Analysts say it could hit that point later this week, depending on how the third-quarter reporting period goes. In particular, investors are looking for another roundd of better-than-expected earnings and even some stabilization in revenue.

Source: Fairfax, Bloomberg, CNN

The Australian share market has ended 1 per cent higher, boosted by banking and commodity stocks, and following a positive lead from world markets overnight. At the close, the benchmark S&P/ASX200 index was up 45.9 points, or 1 per cent, at 4785.7, while the broader All Ordinaries had gained 44.3 points, or 0.9 per cent, at 4789.8. Among the sectors, financial stocks were up 1.4 per cent, materials rose 1.3 per cent and energy shares gained 0.5 per cent.

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12 Oct 09

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Market Wrap for Monday 12th October 2009

The Australian share market lost ground for a second day in a row, dragged lower by sinking bank stocks. The benchmark S&P/ASX200 index ended down 13.1 points, or 0.3 per cent, at 4739.8, while the broader All Ordinaries fell 9 points, or 0.2 per cent to 4745.5.

Australia’s importers and exporters are more optimistic about the future, with trade confidence surging in the September quarter amid a rapidly improving Chinese economy. Australia registered 107 in the HSBC Trade Confidence Index for the September quarter, up from 97 in the three months to June. It was the biggest jump in confidence of 12 countries surveyed. The index ranges from zero to 200, and any number above 100 indicates increasing confidence.

The US stock market is set to continue its winning ways in the coming week as momentum builds during earnings season. The latest quarterly reporting period is off to a strong start, but this week will be crucial to hopes that revenue growth has returned triumphant, as opposed to earnings surprises resulting mostly from cost-cutting. Six Dow components and some of the biggest banks are in line for scorecard reporting.

Despite the revisions in various sectors, earnings are expected to fall more than 25 percent compared to a year ago, according to data compiled by Thomson Reuters. Arguably, the bar is still set low, even if people have already factored this into projections.

Goldman is one of the financial titans reporting earnings this week. The banking giant has continued to increase its profits even in tough times, so the others, particularly Bank of America, are better bellwethers for the market. Financials are projected for a 57 percent increase in earnings from the year-ago period, when Lehman Brothers imploded.

Source: Fairfax, Reuters, AAP

The Australian share market lost ground for a second day in a row, dragged lower by sinking bank stocks. The benchmark S&P/ASX200 index ended down 13.1 points, or 0.3 per cent, at 4739.8, while the broader All Ordinaries fell 9 points, or 0.2 per cent to 4745.5.

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12 Oct 09

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Tasty Tips – Local and Global News

1. Dow gains 78 pts or 0.8% to 9864, S & P up 6 pts or 0.56% to 1071. After a weaker start equities picked up helped by an improved profit outlook for Chevron and signs of increased activity in the corporate sector. The $US firmed on expectations interest rates will rise in the short term fuelled by better company results and a slowdown in the number of jobless claims

2. Gold fell $7.70 to $1048.60 and silver lost 12.5 cents to $17.69 mainly on the stronger $US

3. Base metals followed the lead in the precious metals market with all losing ground. Biggest losses were in Nickel, down 3.8%, Zinc down 2.25%, while Copper and lead were down 1.5%

4. Oil was virtually unchanged at $71.77, a small rise of 8 cents. After a sluggish start the contract traded lower before improving along with the equity market. The International Energy Agency also said demand should start to grow by the end of this year and more so in 2010

5. Major European markets traded in a narrow range with little noticeable movement the FTSE gained 7 pts to 5161 while the DAX fell 4 pts to 5711 and the CAC lost 7 pts to 3799

6. $AUS currently trading at 90.44 US cents

7. China’s Yanzhou Coal Mining will re submit its application for the $3.54b bid for Felix Resources

8. Rupert Murdoch urges China’s government to allow foreign media companies access to the domestic market

9. Fortescue plans to spend $360m to fast track development of the Christmas Creek iron ore mine

10. Deutsche Bank expands its merger and acquisition business in South Africa and expects a 10% to 15% revenue growth from the division

11. Lihir Gold CEO says gold could climb to $1500 an ounce on the back of a gently declining mine supply, increasing physical demand and the well documented buying by central banks

12. Transurban says toll revenue rose 6.8% in the September quarter

13. A Standard and Poor’s analyst says a support fund created to help Dubai pay its due debt has insufficient resources to meet its obligations

14. British PM, Gordon Brown, plans asset sale to raise STG3b his office said on Sunday

15. The Sri Lankan stock exchange becomes the world’s top performing bourse this year rising 110% now the civil war has ended

16. Citigroup have a “HOLD” on TLS and a “SELL” on BLD

17. Goldman Sachs have a “BUY” on BBG with “HOLDS” on BOQ, BRG and GUD and a “SELL” on MRE

18. Deutsche Bank have “BUYS” on TLS, ORI and AVO

19. RBS have “BUYS” on TLS and CRO with “HOLDS” on GUD and RHL

20. Lend Lease plans to become a stapled entity by distributing units in a newly created trust, Lend Lease Trust, to shareholders on a 1 for 1 basis. Company claims the move will provide a more efficient capital structure for the ownership of investment assets

21. Mirvac Group offers $256m equating to 54 cents each for the units in Mirvac Real Estate Investment Trust it doesn’t already own

22. Fortescue Metals says September quarter production exceeded its guidance target by 9% and reiterates forecasts for the current quarter

23. Australian market up 32 pts or 0.68% to 4786 in early trade, New Zealand up 20 pts or 0.63% to 3183 in morning trade

pasta

Dow gains 78 pts or 0.8% to 9864, S & P up 6 pts or 0.56% to 1071. After a weaker start equities picked up helped by an improved profit outlook for Chevron and signs of increased activity in the corporate sector. The $US firmed on expectations interest rates will rise in the short term fuelled by better company results and a slowdown in the number of jobless claims

Gold fell $7.70 to $1048.60 and silver lost 12.5 cents to $17.69 mainly on the stronger $US

Base metals followed the lead in the precious metals market with all losing ground. Biggest losses were in Nickel, down 3.8%, Zinc down 2.25%, while Copper and lead were down 1.5%

Oil was virtually unchanged at $71.77, a small rise of 8 cents. After a sluggish start the contract traded lower before improving along with the equity market. The International Energy Agency also said demand should start to grow by the end of this year and more so in 2010

Major European markets traded in a narrow range with little noticeable movement the FTSE gained 7 pts to 5161 while the DAX fell 4 pts to 5711 and the CAC lost 7 pts to 3799

$AUS currently trading at 90.44 US cents

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12 Oct 09

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Market Wrap for Friday 9th October 2009

Shares lost ground but managed to extend gains to a fourth week in the past five as confidence in the economy grows. Gold earlier rose to new record levels. The benchmark S&P/ASX 200 index ended the day 15.7 points lower, or 0.3 per cent, to 4752.9 and the All Ordinaries, while the All Ordinaries index slipped 8.8 points, or 0.2 per cent, to 4754.5. Earlier in the day, the ASX 200 index reached its highest level since October 2.

Gold fell to below $1,050 per ounce on Friday as the dollar edged up, snapping a rally that took prices to all-time highs for three consecutive days. Spot gold hit a record high of $1,061.20 on Thursday as the dollar’s weakness increased bullion’s traditional appeal as a hedge against the U.S. currency. The dollar rose on Friday, with comments from Reserve Chairman Ben Bernanke that indicated monetary policy might have to be tightened as a recovery takes hold, helping to pull the greenback off 14-month lows against a basket of currencies.

Australian central bank Governor Glenn Stevens will raise interest rates for a second straight month in November, analysts say, after a report yesterday showed the nation’s unemployment rate may have peaked below 6 percent.

The jobless rate fell to 5.7 percent, the first drop in five months, as employment unexpectedly surged by 40,600, the bureau of statistics reported yesterday in Sydney. The nation’s currency jumped to a 14-month high and is headed for its biggest weekly gain in more than four months as traders bet the central bank will raise interest rates on Nov. 3.

Wall Street has added about two-thirds of a per cent after Alcoa’s surprise profit result got the third-quarter earnings season off to a good start. It is the aluminium producer’s first profit after three successive quarterly losses, and has been attributed to cost saving measures and higher aluminium prices.

Elsewhere, official figures from the US Labour Department showed the number of workers filing new claims for unemployment benefits fell to a nine-month low last week. US retailers also posted their first monthly sales increase in more than a year, suggesting consumers are feeling more confident about spending. The Dow Jones Industrial Average has closed up 61 points to 9,787. The S&P 500 Index was eight points higher to 1,066 and the Nasdaq added 13 points to 2,124.

Source: Fairfax, Reuters, Bloomberg, ABC

Shares lost ground but managed to extend gains to a fourth week in the past five as confidence in the economy grows. Gold earlier rose to new record levels. The benchmark S&P/ASX 200 index ended the day 15.7 points lower, or 0.3 per cent, to 4752.9 and the All Ordinaries, while the All Ordinaries index slipped 8.8 points, or 0.2 per cent, to 4754.5. Earlier in the day, the ASX 200 index reached its highest level since October 2.

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