Posts Tagged ‘FTSE’

    • Stock Market Analysis: Markets Rise as Chinese Trade Still Robust

    Tuesday, February 15th, 2011

    *  U.S. markets traded in a tight range overnight, with gains led by energy and materials companies.
    *  European stock markets closed mixed overnight. The EU’s Eurostat agency reported industrial production fell 0.1 percent from November.
    *  Asian stock markets rose yesterday. China reported a larger-than-expected surge of imports and exports last month.
    *  Base metals prices closed mostly higher, after strong Chinese trade data.

    The SPI Futures is trading above the key level of 4800, and closed up 0.1% (or 7 pts) at 4,925.  The key levels for our index today are 4950 and 4860. M&A activity continues to drive specific stocks. 

    The ASX is set to trade higher today.  We will continue to focus on local earnings reporting this week, as we had generally positive leads from overseas markets.   Expect Energy and Materials stocks to be in focus. See below for stocks in the news today.

    Economics News Today

    * RBA Monetary Policy Meeting Minutes for February
    * Lending Finance for December

    U.S. Markets

    U.S. markets traded generally higher overnight, with gains led by energy and materials companies.  The aftermath of the regime change in Egypt did not really impact stocks, with the exception of the energy sector.  Investors remain concerned that there may be a spread of unrest in the Middle East as a result of what happened in Egypt.  Brent oil futures reached a 2-year high. 

    President Barack Obama’s proposal of a $US3.73 trillion budget for the 2012 fiscal year did not move the market significantly.  The budget plan is due to be implemented on 1 Oct 2011 and proposes a 5-year freeze on many domestic spending programs and flags that the government will cut deficits by about $US1.1 trillion over the coming decade. 

    In corporate news:
    * Wal-Mart Stores Inc. dropped 1.4% after downgraded from JPMorgan citing that same-store sales deterioration could last for years
    * MGM Resorts International Inc fell 3.5% after reporting a loss of $US139 million last quarter
    * Netflix rose 6% after it was the only paid video service to be a top-10 video service on the Internet
    * Nokia dropped 5.7%, extending its recent declines
    * GE rose 1.1% after agreeing to buy a division of the U.K. company John Wood Group for $US2.8 billion in cash.

    The Dow closed flat (or -5 points) at 12,268, while in the broader market the S&P 500 index was up marginally 0.2% (or 3 points) at 1,332 and the tech-heavy Nasdaq ended up 0.3% (or 8 points) at 2,817. 

    Sectors that make up the S&P index delivered mixed performances, with outperformers including Energy up 2.2% and Materials up 1.1%, while the Consumer Discretionary sector fell -0.4% and the Industrials sector was down -0.1%.

    European Markets

    European stock markets closed mixed overnight. The Stoxx 600 Europe closed up 0.4%, while the euro dropped to a 3-week low against the US dollar.  The recent sustained gains in the markets suggest that stocks are due for some consolidation. 

    Investors remain concerned over inflation and continuing issues relating to sovereign debt near-term.  Overnight Euro-zone leaders failed to commit to any specifics about increasing the size or scope of Europe’s bailout fund for debt-laiden PIIGS economies. 

    The EU’s Eurostat agency reported industrial production fell 0.1 percent from November (in-line with forecasts), but was 8.0 percent stronger than in December 2009.  This was the first fall in three months, as severe winter weather hit production in Germany and elsewhere in the region.

    In London the FTSE 100 index closed down marginally -0.1% (or -3 points) at 6,060, the German DAX closed up 0.3% (or 25 points) at 7,397, while in France the CAC was down marginally -0.1% (or -5 points) at 4,116.

    Asian Markets

    Asian stock markets rose yesterday.  The news that Egyptian President Hosni Mubarak stepped down eased the nervousness over Egypt’s political crisis, but there are still issues in the Middle East. There is still caution that oil prices remain high, and ahead of upcoming Chinese inflation data. 

    The Japanese Nikkei and the Chinese Shanghai Composite both reached new 2011 closing highs, boosted by the Chinese trade data.  This was despite data showing Japan’s economy contracted 1.1 percent in the last quarter of 2010, confirming Japan had now lost its 42-year old spot as the world’s number two economy to China. 

    In China a larger-than-expected surge of imports and exports last month fueled hopes that demand could rise for materials stocks.  The data showed exports and imports surged in January, while the trade surplus fell 53.5 percent to $US6.45 billion, providing a boost to the country’s growth prospects.  Exports increased 37.7 percent from a year earlier, while imports jumped 51 percent.  Miners rose on this news.  Chinese January inflation data is due for release today.

    The Chinese SSE Composite closed up 2.5% (or 72 points) at 2,899, while in Hong Kong the Hang Seng Index was up 1.3% (or 292 points) at 23,121 and in Japan the Nikkei 225 Index was up 1.2% (or 119 points) at 10,726.

    Commodities

    The Dollar Index was higher at 78.59 on a lower Euro, while the Australian Dollar last traded just above parity at 100.25. Commodities were generally higher.

    For the session the Benchmark crude NYMEX for December delivery was down -0.8% (or $US-0.69) to settle at $US84.89.  Copper prices are back at 2-year highs. Copper for December delivery was up 2.0% (or 9.2 cents) at $US4.6250.  December gold was up marginally 0.1% at $US1,361.60.

    ASX Market News
     
    AGO – Atlas Iron has declared its off-market takeover offer for Giralia Resources unconditional.

    ALD – Allied Gold says net profit more than doubled in 1H11.

    ASL – Ausdrill Ltd has secured new contracts in Africa and Australia, including contradcts with BHP Billiton Ltd in Zambia.

    BEN – Bendigo and Adelaide Bank lifted 1H11 profit by 67 percent and reported solid margins and credit quality will protect it against volatile trading in the second half.

    BHP – BHP Billiton is on track to record pre-tax profits of $30 billion for the financial year, according to reports from London.

    EHL – Emeco Holdings the earthmoving equipment provider said it will book a $7.85 million pre-tax impairment charge on its Indonesian business.

    GPG – Guinness Peat Group will undertake an orderly sell down of its assets and is planning an initial capital return to shareholders of at least $119.4 million in the 2011 calendar year.

    IAG – Insurance Australia Group said 1H11 insurance profit will decline 3.7 percent because of a greater than expected loss in the UK.

    LEI – Leighton Holdings expects FY11 net profit to fall by more than 20 percent, after reporting a 25 percent drop in 1H11 profit.

    MCC – Macarthur Coal expects FY11 net profit of $138 to $143 million, and the completion of its transaction with Gloucester Coal Ltd involving Middlemount Coal Pty Ltd had not changed its half year operating profit guidance.

    NCR – NuCoal Resources has completed a $30 million new share sale to fund studies on the Doyles Creek coal project in the Hunter Valley and potential takeovers.

    SPH – Specialty Fashion Group says 1H11 profit fell 37 percent due to a very difficult trading environment and heavy discounting, and says apparel retailers face “a new headwind” in rising input costs from China.

    SLM -  Salmat the direct marketer posted lower 1H11 profit, but says it can meet full year earnings guidance provided trading conditions remain stable.


    Local Corporate Reporting     
     
    ALZ – Australand Property UN REIT Full year 2010 Results
    AXA – AXA Asia Pacific Holdings   Full year 2010 Results & Q4 2010 New business & funds flow
    BXB – Brambles Industries Ltd          Interim 2011 Results
    CPA – Commonwealth Property Office Fund  Interim 2011 Results
    CFX – CFS Retail Property Trust      Interim 2011 Webcast
    FGL – Foster’s Group Ltd                  Interim 2011 Results
    GWT – GWA International Limited   Interim 2011 Results
    PRY – Primary Health Care Ltd        Interim 2011 Results Presentation
    SAI – SAI Global Ltd                        Interim 2011 Results
    WRT – Westfield Retail Trust           Interim 2011 Results
    WBC – Westpac Banking Corp         Q1 2011 Trading statement
    AWC – Alumina Ltd (AWC.AU)          Full year 2010 Ex-dividend date
    CPU – Computershare (CPU.AU)         Interim 2011 Ex-dividend date
    DUE – Duet Group (DUETF)               Interim 2011 Dividend payment date
    TCL – Transurban Group Ltd               Interim 2011 Dividend payment date

     

    Market Summary    

    ASX – to open higher
    US & UK/Europe – higher
     
    US ADRs –  Higher
     
    BHP up 2.1% & RIO up ; AWC up 1.4%
    ANZ up 2.2% & NAB up 1.5%
    NEM  up 0.6%, JHX up 0.2%, NWS down 1.4%
     
    Commodities Stock Index up 1.6%
    Gold Stocks Index up 1.4%
    Oil Stocks Index up 1.7%

     

    By Michael Hevern
    Head of Research

     

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    Stock Market Analysis: Markets Consolidate

    Friday, January 14th, 2011

    * US markets paused overnight with some short-term profit taking, after weekly jobs data showed an increase in initial jobs claims and the November US trade gap unexpectedly shrank to a 10-month low.
    * European stock markets closed mixed, backing off 28-month highs after more successful bond auctions (for Spain and Italy).
    * Asian stock markets jumped higher, with Financials leading in Japan and Hong Kong, while Chinese oil majors led in Shanghai.
    * Commodities prices fell on concerns over Chinese demand.

    The SPI Futures is above its key weekly pivot level of 4700, closing down -0.3% (or -13 pts) at 4,772.  The key levels for our index today are 4800 and 4720. M&A activity continues to drive specific stocks.

    The ASX is set to consolidate, as we had mixed leads from overseas markets.  Expect to see some short-term profit-taking today, as investors digest the ramifications of the Queensland floods stocks.  Miners and energy stocks are likely to weigh as commodities prices fell.  The Unemployment report yesterday showed the unemployment rate dropped to 5.0% (from 5.2%) its lowest level since January 2009.

    US Markets

    US markets paused overnight, after some short-term profit taking.  The weekly employment report found that more people applied for unemployment benefits last week.  The Labor Department said first-time applications for unemployment benefits rose 35,000 from the previous week, which is the biggest jump in 6-months.  The Labor Department also reported that December wholesale prices rose by the largest amount in nearly a year, as a result of higher energy and food costs, though most other prices rose only slighly. 

    The November US trade gap unexpectedly shrank to a 10-month low, as growing global demand and the weaker US dollar helped boost overseas sales.  The US dollar index lost 1.2 per cent against a basket of six currencies after successful bond auctions by Spain and Italy pushed the euro higher.  Commodities traded lower on concerns over Chinese demand.  Profit-taking was spread across the market, with noteable sector performances including falls in Materials, down -0.9%, Healthcare down -0.6%, and Financials and Energy both down 0.4%.  The consumer price index (CPI) and Intel Corp will report tonight.

    The Dow closed down marginally -0.2% (or -24 points) at 11,732, while in the broader market the S&P 500 index was down marginally -0.2% (or -2 points) at 1,284 and the tech-heavy Nasdaq ended down marginally -0.1% (or -2 points) at 2,735.

    European Markets

    European stock markets closed mixed overnight, backing off 28-month highs.  The Stoxx Europe 600 Index fell 0.6% off its highest level since September 2008.  European markets rose early after the successful Spanish (EUR3.0 billion) and Italian (EUR6.0 billion) bond sales overnight, which followed Portugal’s bond auction success.  The success of the first bond auctions for 2011 eased some of the concerns over the future of the eurozone, and supported the view that there is no need for an emergency bailout at least in the near term.  However investors then became cautious as they looked overseas to the report highlighting continued weakness in the US labour market and the slowing growth in China. 

    The central banks have left rates on hold as expected but did highlight concerns about impending inflation into 2011, with the European Central Bank (ECB) keeping its main lending rate at a record low 1.0%, like the Bank of England (BoE) at 0.5%.

    In London the FTSE 100 index closed down -0.4% (or -27 points) at 6,024, the German DAX closed up 0.1% (or 6 points) at 7,075, while in France the CAC was up 0.7% (or 29 points) at 3,995.

    Asian Markets

    Asian stock markets jumped higher yesterday.  In Japan the market hit an 8-month high, as investors were buoyed by the successful Portuguese bond auctions, which offered some relief over the European debt crisis.  The Hong Kong market also rose to 2-month highs. In both Japan and Hong Kong gains were led by banking stocks after strong performances by US and European banking stocks.  In China the Shanghai Composite was led higher by Chinese oil majors, which were boosted by rising oil prices.

    In China the SSE Composite closed up marginally 0.2% (or 6 points) at 2,828, while in Hong Kong the Hang Seng Index was up 0.5% (or 113 points) at 24,239 and in Japan the Nikkei 225 Index was up 0.7% at 10,589.7.

    Commodities

    Gold remained below $US1,400 an ounce, while crude oil and copper fell. The Dollar Index was down -0.9% at 79.18 on the higher Euro, while the Australian Dollar last traded higher at 99.67. Commodities were generally lower.

    Benchmark crude NYMEX for December delivery was down -0.8% (or $US-0.75) to settle at $US91.11. Copper prices backed off around 2-year highs, and copper for December delivery was down -1.2% (or -5.5 cents) at $US4.3475. Gold prices were off all-time highs again, with December gold down -0.9% at $US1,372.80. 

     
    Market Summary    

    ASX – to open lower
    US & UK/Europe – Consolidated

    US ADRs –  Broadly Lower
     
    BHP down -0.4% & RIO up; AWC up 0.9%
    ANZ up 0.2% & NAB up 1.1%
    NEM  down -1.7%, JHX up 1.0%, NWS down -1.2%
     
    Commodities Stock Index down -0.7%
    Gold Stocks Index down -2.8%
    Oil Stocks Index down -0.3%

     

    By Michael Hevern
    Head of Research

      

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    Stock Market Analysis: Euro-Zone Sovereign Debt Contagion Fears Ease

    Wednesday, January 12th, 2011

    US markets closed flat after early weakness, with investors buoyed as concerns eased over euro-zone sovereign debt contagion issues and by initial US corporate earnings showing improvement.  European markets recovered overnight, as investors were encouraged by the European Central Bank (ECB) stepping in to buy euro-area government bonds for the second consecutive day, and by Japan joining with China in committing to buy euro-debt.  Asian equity markets were mixed yesterday, with Chinese economic data causing investor concern about inflation and impending interest rate hikes.

    The SPI Futures is above its key weekly pivot level of 4700, and closed up marginally 0.2% (or 10 pts) at 4,713.  The key levels for our index today are 4740 and 4680. M&A activity continues to drive specific stocks.  The ASX is set trade higher, as we had generally mixed leads from overseas markets.  Look for recovery in the energy and mining stocks.  In economic news today there is November Housing Finance Approvals Report and the DEEWR Monthly Leading Indicator of Employment for January.

    US Markets

    US markets closed flat after early weakness.  US corporate earnings showed improvement, and easing concerns over euro-zone sovereign debt contagion helped investor sentiment.  The earnings season began this week with Alcoa reporting its 4Q earnings beating forecasts and its highest profit in 9 quarters.  The aluminium maker said it expects demand for its products to jump 12 percent in 2011, citing improving auto sales.  Elsewhere two major retailers raised their earnings forecasts, with Sears Holdings Corp saying they expect earnings to be twice as much as analysts forecast and Tiffany’s said better-than-expected holiday sales would push its earnings higher this year.  Bellwethers such as JP Morgan and Intel are also due to report this week.  Gains were spread across the market, with the Telecom sector (down -1.6%) the only member of the 10 industry groups that make up the S&P 500 index to fall.  Other sector performances included rises in Energy up 1.7%, Materials up 0.8%, Healthcare up 0.5% and Financials up 0.4%.

    The Dow closed up 0.3% (or 34 points) at 11,672, while in the broader market the S&P 500 index was up 0.4% (or 5 points) at 1,274 and the tech-heavy Nasdaq ended up 0.3% (or 9 points) at 2,717.

    European Markets

    European markets rose strongly overnight.  Investors were encouraged as the European Central Bank (ECB) stepped in to buy euro-area government bonds for the second consecutive day. Traders were also comforted after Japan said it would buy bonds from a euro-zone rescue fund to help finance an Irish bailout, following similar commitments from China amid fears of a spreading crisis, however concerns lingered over debt-laden Portugal.  China had already expressed its readiness to assist the European PIIGS economies seen as most exposed to a European debt contagion crisis, pledging to buy bonds directly from Spain, Greece and Portugal.  Stocks across Europe rose, however investors remain cautious over the possibility of the need for a bailout of Portugal, for which borrowing rates remain close to record levels, though Portugal is adamant that it does not expect to seek external help.  In London the market rose for the first session in four as the banks recovered from their recent sell-off.  In Germany the market rose for the first session in three.

    The FTSE 100 index closed up 1.0% (or 58 points) at 6,014, the German DAX closed up 1.2% (or 85 points) at 6,942, while in France the CAC was up 1.6% (or 60 points) at 3,882.

    Asian Markets

    Asian markets were mixed yesterday.  Traders were cautious amid growing fears of the euro-zone debt contagon crisis resurfacing, but markets managed to recover from their early sell-offs. The Chinese market rose as the central bank reported M2, the broadest measure of money supply, rose to 19.7 percent in December, the fastest pace since May.  Chinese foreign exchange reserves also climbed to a record last quarter, and lending exceeded the government’s annual target, which will increase pressure on the central bank to tighten policies to rein in liquidity and inflation.

    In China the SSE Composite closed up 0.4% (or 12 points) at 2,804, while in Hong Kong the Hang Seng Index was up 1.0% (or 233 points) at 23,760 and in Japan the Nikkei 225 Index was down marginally -0.1% at 10,511.

    Commodities

    Gold remained below $US1,400 an ounce, while crude oil rose and copper fell. The Dollar Index was down marginally -0.1% at 80.83 on the higher Euro, while the Australian Dollar last traded lower at 98.67. Commodities were generally higher.

    Benchmark crude NYMEX for December delivery was up 2.2% (or $US1.97) to settle at $US91.22. Copper prices backed off around 2-year highs, and copper for December delivery was up 2.1% (or 9.1 cents) at $US4.3450. Gold prices were off all-time highs again, with December gold up 0.8% at $US1,380.70. 

     
    Market Summary    

    ASX – to open higher
    US & UK/Europe – Mixed

    US ADRs –  Generally Lower
     
    BHP up 0.5% & RIO up; AWC down 0.4%
    ANZ down 0.4% & NAB down 0.2%
    NEM  up 0.8%, JHX up 0.4%, NWS down 1.2%
     
    Commodities Stock Index up 1.4%
    Gold Stocks Index up 1.4%
    Oil Stocks Index up 1.5%

     

    By Michael Hevern
    Head of Research

     

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    Stock Market Analysis: Markets Rise on M&A Activity

    Wednesday, December 22nd, 2010

    U.S. markets rose overnight, as financial companies led stocks higher on M&A activity.  European stock markets posted solid gains but trading volumes were thin.  Asian stocks rose, as investors welcomed an easing of tensions on the Korean peninsula, with Chinese and Hong Kong markets rising, led by the miners and energy.  Commodities prices were higher.

    The SPI Futures is above its key weekly pivot level of 4700 closing up 0.3% (or 14 pts) at 4,780.  The key levels for our index this today are 4820 and 4730. M&A activity continues to drive specific stocks.  The ASX is set to open higher, as we had positive leads from overseas markets.  Miners and banks should again see support today.

    Continue looking at small and mid cap stocks to outperform this week, as we see some “window-dressing” by fund managers trading into the year’s close. Also expect trading volumes to reduce this week.

    US Markets

    US markets rose overnight, as financial companies led stocks higher on M&A activity, after another big banking deal raised hopes that more acquisitions could be on the way.  Corporate mergers have picked up strongly this year as the US Research firm Dealogic has reported that the volume of corporate deals has jumped 18 percent to $US2.7 trillion so far this year, compared to 2009.  This M&A activity has combined with signs of an improving economy and the tax cut package passed last week, to help drive stock prices higher. The S&P 500 index has jumped 6.2 percent this month and is up over 12 percent this year.  The sectors performing well were financials up 1.7%, and materials and energy which both rose 1.0%, while healthcare and the consumer discretionary sectors were down 0.3%.

    The Dow closed up 0.5% (or 55 points) at 11,533 while in the broader market the S&P 500 index was up 0.6% (or 7 points) at 1,255 and the tech-heavy Nasdaq ended up 0.7% (or 18 points) at 2,667.

    European Markets

    European stock markets posted solid gains overnight but trading volumes were thin.  Investors are choosing to overlook eurozone debt concerns, after Portugal was hit by a downgrade threat, with ratings agency Moody’s warning it may lower by one or two notches Portugal’s A1 rating owing to uncertainty about growth and borrowing prospects.  The Fitch ratings agency said it could downgrade its rating on Greece, putting it below investment grade, after a review their finances. 

    Gains were led by the oil and financial sectors, after by positive corporate news.  In London investors ignored a report that British public borrowing surged in November to the highest monthly level since records began, and pushed the market to two and a half year high again, led by miners and banks, as copper prices remain at record levels.  Sentiment in the eurozone was helped by Chinese expressions of support for European Union measures to tackle a eurozone finance crisis plaguing the PIIGS – Portugal, Spain, Ireland and Greece.  Gains in the German market saw it reach levels not seen since May 2008, attributed to portfolio “window dressing” as fund managers acquire the best performing stocks while selling off weaker performers before closing their books for the year.

    In London the FTSE 100 index closed up 1.0% (or 74 points) at 5,951, the German DAX up 0.9% (or 59 points) at 7,077, while in France the CAC was up 1.1% (or 42 points) at 3,927.

    Asian Markets

    Asian stocks rose, as investors welcomed an easing of tensions on the Korean peninsula.  A senior Chinese official expressed support for measures taken by the European Union and International Monetary Fund to ensure financial stability in the eurozone, which boosted European stocks. Chinese and Hong Kong markets rose, led by the miners and regional markets were boosted by energy companies, which have been rising on the back of higher oil prices caused by freezing weather across the northern hemisphere and an expected jump in demand for petrol over Christmas. Crude oil closed above $US90 per barrel.  The Japanese market traded higher as the Bank of Japan kept interest rates at zero to 0.1 per cent as expected.

    In China the SSE Composite closed up 1.8% (or 51 points) at 2,904, while in Hong Kong the Hang Seng Index was up 1.6% (or 355 points) at 22,994 and in Japan the Nikkei 225 Index was up 1.5% (or 154 points) at 10,370.

    Commodities

    Copper remained around record levels again, on continuing concerns that demand will outpace supply into 2011 driving prices higher.  Gold is higher still below $US1,400 an ounce, while crude oil rose to record levels. The Dollar Index was up 0.1% at 80.65 on the lower Euro, while the Australian Dollar last traded at 99.63.  Commodities were generally higher.

    The benchmark crude NYMEX for December delivery was up 0.8% (or $US0.68) to settle at $US90.05. Copper prices backed around 2-year highs, seeing copper for December delivery up 1.7% (or 7.0 cents) at $US4.1990. Gold prices were off all-time highs again, with December gold up 0.2% (or $2.70) at $US1,385.10.

    Key International News Drivers Today

    US -   U.S. markets positive on M&A activity.
    EU –   European markets recovered.  German market back at May 2008 levels.
    CHINA – geopolitical tensions on the Korean peninsula ease. China prospect of implementing further tigthening measures.
    JAPAN – Market holding above 10,000 at 7-month highs.


    Markets Overview 
     

    Market

    Movement

    The Dow Jones Industrial Average

     Up 0.5% (or 55 pts)  at 11,533     

    The S&P 500                             

     Up 0.6% (or 7 pts)  at 1,255 

    The Nasdaq                              

     Up 0.7% (or 18 pts)  at 2,667



    The FTSE 100                           

     Up 1.0% (or 74 pts)  at 5,951

    The German DAX               

     Up 0.9% (or 59 pts)  at 7,077

    The French CAC             

     Up 1.1% (or  42 pts)  at 3,927



    The Dollar Index 

     Up Marginally 0.1% at 80.65

    The Australian Dollar 

     Last traded at 99.63

    The Commodities Index

     Up 0.8% at 326.80



    Crude Oil Futures      

     Up 0.8% at $90.05

    Gold Futures             

     Up 0.2% at $1,385.10 

    Copper Futures             

     Up 1.7% at $4.2745

    SPI Futures              

     Up  0.3% (or 14 pts) at 4,780 





    Market

    Movement

    SSE Composite (China) 

     Up 1.8%  at 2,904

    Hang Seng Index (Hong Kong) 

     Up 1.6%  at 22,994

    Nikkei 225 Index (Japan) 

     Up 1.5%  at 10,370

     


    ASX News Today
      
    AGK- 370,000 AGL NSW electricity customers face a 3.8 percent price hike from January 2011.

    AUN- Austar United Communications, the regional pay-tv provider, plans to return $200 million to shareholders, following the extension of the bulk of a senior debt facility for five years.

    BLD- Boral, the building materials supplier, will acquire a North American stone veneer supplier, Owens Corning Masonry Products LLC (Cultured Stone), for a minimum $US90 million. 

    BSL- BlueScope Steel has extended its debt facilities until 2013-2015, with a new $1.35 billion facility with 13 domestic and international banks.

    ERA- Energy Resources of Australia the uranium producer, 68.4 percent owned by RIO, has flagged a 2010 profit of $45-55 million, well down on its 2009 result of $272million, due to lower production.

    GIR- Giralia Resources Ltd saya Atlas Iron Ltd has launched its third friendly takeover bid in the past 14 months with an $828 million offer for the explorer to expand its Pilbara landholdings by about 50 per cent. Share surged 40% on the news.

    IPL- Incitec Pivot Ltd the fertiliser and chemicals maker says floods in eastern Australia are expected to have short-term effect on the company.

    LLC- Lend Lease the property developer has purchased engineering and construction business Valemus Australia, the local arm of German constructor Bilfinger Berger, for $960 million.

    NCM- Newcrest Mining has reduced to a minimum activity at one of its mines in Ivory Coast, in West Africa, following violence after a disputed election.

    OGC- Oceana Gold has been rated as a Buy by Goldman Sachs in its initiates coverage with a A$5.00 price target. They expect FY11 earnings of US$68 million, and views OGC’s NZ and Philippines exploration tenements favorably, with upgrades to existing resources possible.

    RIO- Rio Tinto Ltd’s coal division has been granted a mining lease at its Mount Pleasant project in NSW, bringing it a step closer towards developing a new thermal coal mine.

    RIV- Riversdale Mining has gone into a trading halt, pending a statement about “a possible control transaction”, according to the company.

    TLS- Telstra shareholders are expected to approve a deal that allows the giant telco to participate in the national broadband network (NBN), according to the federal government.

    VBA- The NZ government has approved a Trans-Tasman aliance between Virgin and Air NZ.

     

    Economic Reports
    Westpac-Melbourne Institute Indexes of Economic Activity for October

      

    Companies:

    None
     
    Ex-Dividends
    iShares MSCI BRIC (IBK)
    iShares MSCI Em Mkts (IEM)
    iShares MSCI Hk (IHK)
    iShares MSCI Japan (IJP)
    iShares MSCI S Korea (IKO)
    iShares MSCI Sing (ISG)
    iShares MSCI Taiwan (ITW)
    iShares MSCI EAFE (IVE)
     
    Market Summary    


    ASX – to open higher
    US & UK/Europe – EU  and  US Positive

     
    US ADRs –  Broadly Higher
     
    BHP up 2.1% & RIO up; AWC up 2.0%
    ANZ up 2.2% & NAB up 1.4%
    NEM  down 0.2%, JHX up 4.6%, NWS up 0.5%
     
    Commodities Stock Index up 1.0%
    Gold Stocks Index down 0.4%
    Oil Stocks Index up 1.1%

     

    By Michael Hevern
    Head of Research
     

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    Stock Market Analysis: US Economy Improving as China Targets Inflation

    Thursday, December 16th, 2010

    US markets again sold off late in the session to end flat.  Stock prices initially rose as improving US economic data points to the recovery still being on track.  European markets ended lower overnight, due to concerns over the euro-zone sovereign debt contagion weighing on investor sentiment.  Asian markets fell yesterday, as Japan reported its first quarterly drop in business confidence for two years, while investors were spooked by the Chinese government wanting to target 4 percent inflation next year.  Commodities prices were mixed.

    Key themes for investors today include: 

    * response to regulatory banking reforms talks
    * response to the completion of the sale of NSW state electricity assets and
    * the Aussie dollar backing off US dollar parity

    The SPI Futures is above its key weekly pivot level of 4700 and closed down -0.3% (or -13 pts) at 4,757.  The key levels for our index today are 4760 and 4680. M&A activity continues to drive specific stocks.  

    The ASX is set to open lower this morning, as we had negative leads from overseas markets.  Look to resource and banking stocks to weigh.

    US Markets

    US markets again sold off late in the session to end flat.  Stock prices initially rose as improving US economic data points to the recovery still being on track.  New York manufacturing activity surged in November better than expected.  The Fed reported US industrial production staged a modest rebound in November (up 0.4 percent), while consumer prices slowed (up 0.1 percent) and capacity utilisation bounced back.  This indicates the recovery is gaining momentum without pushing inflation higher, however high unemployment persists at 9.8 percent. 

    Share prices tracked lower as the session progressed and as euro-zone debt contagion concerns resurfaced.  Goldman Sachs and Morgan Stanley fell more than 1.2% after analysts cut 4Q earnings estimates on the investment banks, citing lower than expected trading volumes in fixed income, currencies, and commodities.

    The US dollar rose around 1 percent against the Euro, which has put pressure on commodities prices overnight.  The sell-off was broadbased with the major laggards being financials (down -0.8%), energy (down 0.6%) and the materials sector (down -0.5%). 

    The Dow closed down -0.2% (or -19 points) at 11,457, while in the broader market the S&P 500 index was down -0.5% (or -6 points) at 1,235 and the tech-heavy Nasdaq ended down -0.3% (or -9 points) at 2,619.

    European Markets

    European markets edged lower overnight.  Concerns over the euro-zone sovereign debt contagion weighed on investor sentiment, as Moody’s said it may downgrade its ratings on Spanish government debt (from AA1), citing Spain’s challenging refinancing needs next year and its complicated outlook for its banks and regional governments.  Elsewhere Standard and Poor’s Ratings Services lowered its ratings outlook on Belgium from stable to negative. Irish lawmakers voted overnight to accept EUR67.5 billion in loans from the European Union and International Monetary Fund as part of the EUR85 billion package to bail out Irish banks and public finances. In the UK the market fell for the first session in five, with declines led by the miners and banks.  In the euro-zone, German Chancellor Angela Merkel said European leaders will approve a permanent facility to rescue financially stressed governments tonight, but again opposed a plan for collective government debt issuance. 

    In London the FTSE 100 index closed marginally down -0.2% (or -9 points) at 5,882, the German DAX was down -0.2% (or -11 points) at 7,016, while in France the CAC was down -0.6% (or -22 points) at 3,901.

    Asian Markets

    Asian markets fell yesterday as well.  The Japanese market traded slightly lower, as the Tankan quarterly survey reported a drop in business confidence, the first in two years.  The report reflects that exporters are being hurt by the yen’s strength, poor domestic demand and the general global uncertainty. 

    Chinese and Hong Kong markets traded lower as investors were spooked by an announcement that the government is targeting 4 percent inflation for next year, up a percentage point from this year’s target but still well below the actual inflation level.  Last week’s CPI data showed the consumer price index rose 5.1 per cent year-on-year in November, raising pressure for an interest rate rise. 

    In China the SSE Composite closed down -0.5% (or -16 points) at 2,911, while in Hong Kong the Hang Seng Index was down -2.0% (or -456 points) at 22,975 and in Japan the Nikkei 225 Index was down marginally -0.1% (or -7 points) at 10,310.

    Commodities

    Copper remained around record levels again, on continuing concerns that demand will outpace supply into 2011 driving prices higher.  Gold was higher, but still below $US1,400 an ounce, and crude oil rose as well. The Dollar Index was up 1.1% at 80.23 on the lower Euro, while the Australian Dollar last traded at 98.54.  Commodities were generally mixed.

    Benchmark crude NYMEX for December delivery was up marginally 0.2% (or $US0.21) to settle at $US88.49. Copper prices backed off 2-year highs, with copper for December delivery down -2.6% (or -10.8 cents) at $US4.0940. Gold prices were off all-time highs again, with December gold down -1.7% at $US1,380.20.

    Key International News Drivers Today

    US -   US markets drifted lower. Manufacturing and production improving.
    EU –   European markets ended lower on EU debt concerns.  ECB pushes consideration of further stimulus.
    CHINA –  China is targeting 4 percent inflation in 2011. China’s prospect of implementing further tigthening measures.
    JAPAN – Market holding above 10,000 at 7-month highs.


    Markets Overview


    Market

    Movement

    The Dow Jones Industrial Average

     Down  Marginally -0.2% (or -19 pts)  at 11,457    

    The S&P 500                             

     Down -0.5% (or -6 pts)  at 1,235 

    The Nasdaq                              

     Down -0.3% (or -9 pts)  at 2,619 



    The FTSE 100                           

     Down  Marginally -0.2% (or -9 pts)  at 5,882 

    The German DAX               

     Down  Marginally -0.2% (or -11 pts)  at 7,016 

    The French CAC             

     Down -0.6% (or -22 pts)  at 3,901 



    The Dollar Index 

     Up 1.09% at 80.23

    The Australian Dollar 

     Last traded at 98.54

    The Commodities Index

     Down  Marginally -0.2% at 318.8



    Crude Oil Futures      

     Up  Marginally 0.2% at $88.49

    Gold Futures             

     Down -1.7% at $1,380.20

    Copper Futures             

     Down -2.6% at $4.0940 

    SPI Futures              

     Down -0.3% (or -13 pts) at 4,757 





    Market

    Movement

    SSE Composite (China) 

     Down -0.5%  at 2,911 

    Hang Seng Index (Hong Kong) 

     Down -2.0%  at 22,975 

    Nikkei 225 Index (Japan) 

     Down  Marginally -0.1%  at 10,310





    ASX News Today
    AGK- AGL Energy shares slumped after an Origin consortium won the bid for NSW electricity assets, but AGL says it plans to poach customers from the successful bidders. 
    ANZ- ANZ Bank CEO Mike Smith says competition within Australia’s retail deposit market has never been so intense.
    ASX- The ACCC competition watchdog will not oppose the $8.4 billion acquisition of the stock exchange operator ASX by Singapore Stock Exchange (SGX).  But the Foreign Investment Review Board (FIRB) is still yet to pass judgement.

    BBG- Surfwear retailer Billabong International has lowered its 1H11 profit guidance by 8 to 13 percent, due to weak sales and a stronger Aussie dollar. Shares slumped 9%.

    BHP- the MRRT tax is back in the news, with issues over the details of the tax, particularly royalties.

    BIG 4- International ratings agency Fitch Ratings says proposed banking reforms in Australia are no threat to its assessment of local banks.

    BPT- Oil and gas producer Beach Energy has secured majority control of Impress Energy, after making a takeover offer earlier this month.

    CRG- Crane Group has urged shareholders to take no action over a hostile $740 million takeover bid from NZ-based Fletcher Building.

    CSR- CSR plans to return $800 million to shareholders after the sale of its sugar and energy business Sucrogen is complete.

    DOW- Moody’s ratings agency has downgraded the debt rating of the funding arm of the Downer EDI-led rail consortium that is delivering rolling stock for NSW.

    FMG- The Fitch ratings agency has assigned a BB+ rating on $US1.5 billion worth of unsecured notes to be issued by Fortescue Metals Group.

    ORG- Origin Energy has been successful its bid for the retail businesses of NSW government power distributors Integral Energy and Country Energy, and the output of generator Eraring Energy for $3.25 billion.

    PPT- Perpetual says its funds under management have declined slightly in November to $27.3 billion.

    RIO- Rio Tinto will undertake $US1.06 billion worth of major works at two of its Canadian aluminium operations.

    RIV- Speculation is mounting that an Indian consortium will launch a takeover bid for the coal miner Riversdale Mining.

    SFX- Bulk minerals explorer Sheffield Resources Ltd has successfully listed on the ASX up 20% raising $7 million.

    TEN- Ten Network Holdings Ltd has appointed Grant Blackley as the company’s new chief executive.

    WBC- Westpac expects some of the legacies of the global financial crisis to linger for a “considerable time”.

     
    Economic Reports:
    Consumer Inflationary Expectations Survey for December
    International Merchandise Imports for November
    RBA Bulletin for December
    FX Transactions and Holdings of Official Reserve Assets for November

      

    Companies:

    Elders Ltd (ELD)                         Full year 2010 AGM
    Orica Limited (ORI)                    Full year 2010 AGM
    National Australia Bank (NAB)  Full year 2010 AGM
    Ex-Dividends
    None
     
    Market Summary    

    ASX – to open lower
    US & UK/Europe – EU Lower, US Flat

    US ADRs –  Broadly Lower

     
    BHP down 1.9% & RIO up; AWC up 4.2%
    ANZ down 2.1% & NAB down 1.2%
    NEM  down 1.9%, JHX down 0.1%, NWS down 0.9%
     
    Commodities Stock Index down 1.0%
    Gold Stocks Index down 1.8%
    Oil Stocks Index down 0.8%

     

    By Michael Hevern
    Head of Research

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    Stock Market Analysis: Markets Surge On Strong Manufacturing And Jobs Data

    Thursday, December 2nd, 2010

    US markets rose sharply overnight, as fund managers reallocated their books, and as jobs and 3Q productivity rose higher-than-expected. European stock markets rallied overnight with strong manufacturing data from China and Europe which helped push stock prices higher. Asian markets ended higher yesterday, as data shows Chinese factories ramped up production in November (for a 21st consecutive month). Asian markets are set up to follow the US strong move today.

    The SPI Futures is above its key pivot level of 4600 and the ASX is set to open higher as the SPI Futures closed up 1.3% (or 62 pts) at 4,657.  The key levels for our index today are 4700 and 4620. M&A activity continues to drive specific stocks.  The ASX is set to open sharply higher today, with strong positive leads from overseas markets.  The Australian  3Q GDP data reported yesterday show the economy grew slower-than-expected at an annual rate of 2.7%.  However investors will focus on the the strong positive manufacturing data from China and Europe, and the sharp rise in U.S. stocks.  Expect traders to go bargain-hunting today, particularly in the Energy and Mining sectors.

    US Markets

    US markets rose sharply overnight, as fund managers reallocated their books. Investors pushed the markets up over 2 percent as they chose to focus on the positive data from the US, Asia and the U.K. Stocks received a boost from the Chinese PMI report which showed continuing expansion and European data with British manufacturing surprise rise and and Germany’s retail sales jumped higher-than-expected.  A Reuters report that the US will commit more money to the International Monetary Fund (IMF) to help with a broader stabilization package for Europe. Though traders later cast doubt on the versatility of the report, investors remain increasingly upbeat on a solution to the European debt issues, thanks to calming remarks from the European Central Bank (ECB) President Jean-Claude Trichet.

    US data surprised to the upside,with a report from the Labor Department showing 3Q productivity is rising higher-than-expected, as companies boosted output while managing to keep costs down. US spending on construction projects also unexpectedly rose by 0.7% in October for a second straight gain while manufacturing numbers largely fell in line with expectations. The weekly jobs data showed that the US added 93,000 private-sector jobs in November, the 10th consecutive month of gains and the largest monthly gain in three years. This bodes well for the monthly Non-Farm Payroll Report due out on Friday. Goldman Sachs has raised its real gross domestic product growth forecast for 2011 to 2.7% versus a prior prediction of 2.0%, and went on to predict a drop in the jobless rate to 8.5% by the end of 2012.  The rally was broad-based, with all 30 of the Dow Jones component stocks, the S&P500 saw all but 15 of its component stocks and all 10 of the S&P 500′s sectors, trading in the green. The sectors that outperformed included Energy up 3.0%, Materials up 2.7% and Industrials up 2.6%.  The Dow closed up 2.3% (or 250 points) at 11,256, while in the broader market the S&P 500 index up 2.2% (or 26 points) at 1,206 and the tech-heavy Nasdaq ended up 2.0% (or 51 points) at 2,549.

    European Markets

    European stock markets rallied overnight, as strong manufacturing data from China and Europe helped push stock prices higher. Initially the markets opened higher on the back of the strong Chinese PMI report. Further positive economic news helped, with a British manufacturing survey registering its highest reading in 16 years and German retail sales jumped higher than expected in October.  Banks and Insurers across the board surged as sovereign bond yields dropped from recent extreme highs. Spanish stocks in particular posted big gains, as the Prime Minister announced new austerity measures aimed at cutting their sovereign debt. The European Central Bank President Jean-Claude Trichet also helped the rally as he suggested that the ECB could step up purchases of troubled peripheral government bonds.   In London the FTSE 100 index closed up 2.1% (or 114 points) at 5,643, the German DAX up 2.7% (or 178 points) at 6,867, while in France the CAC was up 1.6% (or 59 points) at 3,689.

    Asian Markets

    Asian markets ended higher yesterday, and are set up to follow the U.S. strong move today.  Investors focused on the Chinese purchasing managers’ index (PMI) data which showed Chinese factories ramped up production in November (for a 21st consecutive month), through increasing output and growth in export orders, but they still face pressure from rising input costs. The Official Chinese data showed the PMI  index jumped to a 7-month high of 55.2 in November (up from 54.7 the previous month). Inflation continues to be a problem for the Chinese economy and Chinese shares edged higher despite the PMI data reinforcing worries over fresh tightening. Financial companies rebounded after recent losses.   The Japanese market as bargain hunters went shopping, despite the rising yen.In China the SSE Composite closed up marginally 0.1% (or 3 points) at 2,823, while in Hong Kong the Hang Seng Index was up 1.1% (or 242 points) at 23,250 and in Japan the Nikkei 225 Index was up 0.5% (or 51 points) at 9,988.

    Commodities

    The euro held its ground overnight trading 1.2% higher at $1.3134, from $1.298 in the previous session.  The Dollar Index down -0.6% at 80.68 on higher Euro, while the Australian Dollar last traded at 96.86.  Commodities were generally higher.

    Benchmark crude NYMEX for December delivery was up 3.1% (or $US2.61) to settle at $US86.72. Copper prices backed-off 2-year highs, Copper for December delivery  was up 3.0% (or 11.3 cents) at $US3.9360. Gold prices off all-time highs again, with December gold  was up marginally 0.2% at $US1,387.20.

    Key International News Drivers Today

    US – US markets rose sharply overnight, as fund managers reallocated their books.
    EU – Strong manufacturing data from China and Europe helped push stock prices higher.
    CHINA – Chinese factories ramped up production in November (for a 21st consecutive month). China prospect of implementing further tightening measures.
    JAPAN – Market holding above 10,000 at 5-month highs.

    Markets Overview


    Market

    Movement

    The Dow Jones Industrial Average

    Up 2.3% (or 250 pts)  at 11,256

    The S&P 500

    Up 2.2% (or 26 pts)  at 1,206

    The Nasdaq

    Up 2.0% (or 51 pts)  at 2,549



    The FTSE 100

    Up 2.1% (or 114 pts)  at 5,643

    The German DAX

    Up 2.7% (or 178 pts)  at 6,867

    The Fench CAC

    Up 1.6% (or 59 pts)  at 3,689



    The Dollar Index

    Down -0.64% at 80.68

    The Australian Dollar

    Last traded at 96.86

    The Commodities Index

    Up 2.5% at 308.9



    Crude Oil Futures

    Up 3.1% at $86.72

    Gold Futures

    Up  Marginally 0.2% at $1,387.20

    Copper Futures

    Up 3.0% at $3.9360

    SPI Futures

    Up 1.3% (or 62 pts) at 4,657





    Market

    Movement

    SSE Composite (China)

    Up  Marginally 0.1%  at 2,823

    Hang Seng Index (Hong Kong)

    Up 1.1%  at 23,250

    Nikkei 225 Index (Japan)

    Up 0.5%  at 9,988



    ASX News Today

    The SPI Futures is above its key pivot level of 4600 and the ASX is set to open higher as the SPI Futures closed up 1.3% (or 62 pts) at 4,657.  The key levels for our index today are 4700 and 4620. M&A activity continues to drive specific stocks.  The ASX is set to open sharply higher today, with strong positive leads from overseas markets. The Australian  3Q GDP data reported yesterday show the economy grew slower-than-expected at an annual rate of 2.7%. However investors will focus on the the strong positive manufacturing data from China and Europe, and the sharp rise in U.S. stocks.  Expect traders to go bargain-hunting today, particularly in the Energy and Mining sectors.

    ANZ- UBS says stay underweight Aussie banks.

    BHP- Manufacturing activity in China accelerated in November despite the cost of raw materials hitting a 2-year high,

    IPL- Incitec Pivot the fertiliser and explosives maker has priced a $US500 million debt issue in the U.S. bond market.

    PEM- Perilya Ltd has extended its takeover bid for Canada’s GlobeStar Mining Corporation by 10 days to cleanup the remaining shares.

    ORL- Oroton Group Ltd the luxury retailer, has lifted turnover in a tough trading environment with more shoppers buying online.

    QAN- Qantas is carrying more passengers than a year ago but its revenue seat factor is falling.

    RIO- RIO is likely to raise prices of their key products by around 7%, for the 1Q11. While UBS has upgraded RIO to a preferred BUY for 2011.

    RMS- Ramelius Resources the gold producer has made a high grade gold intersection beneath a pit at its Mt Magnet project.

    SPT- Spotless Group the maintenance and cleaning services company has bought a U.K. based catering company.

    NUF- Nufarm has arranged a new $900 million loan that will refinance the ag company’s existing debts due to expire on 15 December 2010.

    SFR- Sandfire Resources has increased its estimated resources fivefold for its DeGrussa copper-gold project in WA.

    TLS- Telstra to split as the parliament has finished the year by giving approval for legislation to structurally separate Telstra into wholesale and retail divisions.

    TPM- TPG Telecom has upgraded its full year earnings guidance to a range of $215-225 million after a good start to the FY11.

    WPL- Woodside has confirmed costs for its Pluto LNG project have blown out by $900 million (total cost is now up 7% to $13.5 billion) and it will take another 6-months to begin production while it rebuilds equipment that falls short of design specifications.

    VMT- Vmoto Ltd the scooter manufacturer, shares are in a trading halt after it was unable to draw down funds from a new $5 million debt facility and was seeking alternative sources of capital.

    Economic Reports :

    International Trade in Goods & Services Balance for October
    Retail Sales Report for October

    Companies:

    Nufarm Limited (NUF) Full year 2010 AGM

    Ex-Dividends

    Templeton Global (TGG)

    Market Summary
    ASX – to open sharply higher
    US & UK/Europe – Sharply Higher
    US ADRs –  Broadly Higher

    BHP up 3.8% &
    RIO up
    AWC up 4.3%
    ANZ up 1.9% &
    NAB up 2.3%
    NEM up 1.4%
    JHX up 3.3%
    NWS up 3.0%

    Commodities Stock Index up 2.9%
    Gold Stocks Index up 1.3%
    Oil Stocks Index up 2.9%

    By Michael Hevern
    Head of Research

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    Stock Market Analysis: Caution Ahead of Key Data Releases

    Wednesday, December 1st, 2010

    Global markets continued to be sold down overnight as investors questioned the financial stability in the euro zone despite approval of a rescue package for Ireland.  US markets recovered from early sell-off (again), but still ended in the red.  The key US indices month-to-date return concluded in negative territory, breaking a 3-month winning streak.  European stocks ended lower again overnight, while Germany again outperforms for the month. Asian stock markets ended lower, with simmering geopolitical tensions between the two Koreas holding back investors. Investors were also cautious ahead of Chinese PMI data out today. Commodities prices ended the session lower but were mainly positive for the month.

    The SPI Futures is below its key support level of 4600 and the ASX is set to open flat as the SPI Futures closed flat (or -2 pts) at 4,591 (down -1.7% for month).  The key levels for our index today are 4650 and 4550. M&A activity continues to drive specific stocks. The ASX is set to open flat today, with negative leads from overseas markets. Investors will need to monitor the 3Q GDP data out today, as economists are forecasting there was a contraction in 3Q10, with net exports providing a bigger drag than expected. Also of interest will be China re further prospective monetary tightening measures and the release of its Chinese PMI data today. Expect traders to be cautious especially ahead of these data releases.

    US Markets

    US markets recovered from early sell-off (again), but still ended in the red.  The key U.S. indices month-to-date return concluded in negative territory, breaking a 3-month winning streak.  The Euro zone fears of sovereign debt contagion continued to weigh on markets globally.  In the U.S. better-than-expected data on U.S. manufacturing and consumer confidence helped the markets to recover.  The Chicago Purchasing Managers Index (PMI), came in at 62.5 in November (vs expectations of a 60.0), while the Conference Board’s November consumer confidence came in at 54.1 (vs the forecast of 52.5).  The technology sector led the declines, as the European Commission opened an antitrust investigation into allegations that Google has abused a dominant position in online search.  The Healthcare sector was down 0.9% while the Financial and Consumer-discretionary sectors fell 0.5%.  The Dow closed down -0.4% (or -46 points) at 11,006 (down -1.1% for month), while in the broader market the S&P 500 index down -0.6% (or -7 points) at 1,181 (down -0.4% for month) and the tech-heavy Nasdaq ended down -1.1% (or -27 points) at 2,498 (down -0.6% for month).

    European Markets

    European stocks ended lower again overnight.  Germany outperforms again for the month.  The markets contined to see selling pressure, as the Ireland bailout package failed to ease concerns  over debt contagion problems flowing to other European nations.  In London stocks continued to decline, as the cost of insuring the debt of the PIIGS economies (including Portugal, Ireland, Italy, Greece and Spain), has soared to record high levels, desipte the EUR85 billion aid package for Ireland.  On a positive an interesting survey from Bloomberg reported that even though European countries slide deeper into debt, the regions companies are paying off creditors and boosting profits at the fastest pace in seven years.  Liabilities as a percentage of earnings in the benchmark Stoxx Europe 600 Index dropped 22 percent last quarter, the most since 2003. Bloomberg analysts also forecast annual profit growth in Europe will average 46 percent in 2010 and 2011, more than at any time in the previous seven years.  If this happens then European stock valuations will be back at levels not seen since September 2008.  The IMF also provided some interesting data forecasting Europe’s economy to expand by 1.7 percent next year and earnings for Stoxx 600 companies to climb 14 percent in 2011.  So in short if the EU can get its soveriegn debt under control the EU companies could be in for a solid year in 2011.  In London the FTSE 100 index closed down -0.4% (or -23 points) at 5,528 (down -2.7% for month), the German DAX down marginally -0.1% (or -9 points) at 6,688 (up 1.5% for month), while in France the CAC was down -0.7% (or -25 points) at 3,630 (down -5.4% for month).

    Asian Markets

    Asian stock markets ended lower. Simmering geopolitical tensions between the two Koreas held back investors.  Investors were aslo cautious ahead of Chinese PMI data out today, and as concerns about further tightening measures in China continued to weigh on shares on both China and in Hong Kong.  The Chinese market slid to a 7-week low, after 3-sessions of selling.  Interest-rate sensitive plays, such as banks and property developers, extended recent losses.  Tokyo stocks saw some profit-taking on the back of disappointing Japanese jobless figures and as caution ruled over fears of contagion of European sovereign debt in the PIIGS economies,  meant that they yen rose against the euro, weighing o exporters.  In China the SSE Composite closed down -1.6% (or -46 points) at 2,820 (down -5.2% for month), while in Hong Kong the Hang Seng Index was down -0.7% (or -158 points) at 23,008 (down -2.7% for month) and in Japan the Nikkei 225 Index was down -1.9% (or -189 points) at 9,937 (up 7.9% for month).

    Commodities

    The U.S. Dollar Index, which tracks the currency against a basket of six others, rose 0.6% as the euro dropped below $1.30 to a 2-month low intra-day. Crude-oil prices slipped below $85 a barrel while gold futures were also lower. The Dollar Index up 0.6% at 81.34 on lower Euro, while the Australian Dollar last traded at 95.86. Commodities were generally higher for the month.

    Benchmark crude NYMEX for December delivery was down -2.4% (or $US-2.04) to settle at $US83.69 (up  3.0% for month). Copper prices backed-off 2-year highs, Copper for December delivery  was up 1.4% (or 5.2 cents) at $US3.8100 (up 2.0% for month). Gold prices off all-time highs again, with December gold  was up 1.3% at $US1,383.60 (up 2.1% for month).

    Key International News Drivers Today

    US -  Markets recover from sharp initial sell-off. Markets break 3-month winning streak.
    EU –  Investors continue to worry over EU debt contagion in the euro zone.
    CHINA -  PMI data out today. China prospect of implementing further tightening measures.
    JAPAN – Market holding above 10,000 but backs off 5-month highs.

    Markets Overview

    Market

    Movement

    The Dow Jones Industrial Average

    Down -0.4% (or -46 pts)  at 11,006 (up down -0.8% for month)

    The S&P 500

    Down -0.6% (or -7 pts)  at 1,181 (up down -0.7% for month)

    The Nasdaq

    Down -1.1% (or -27 pts)  at 2,498 (up down -1.4% for month)



    The FTSE 100

    Down -0.4% (or -23 pts)  at 5,528 (up down -2.5% for month)

    The German DAX

    Down  Marginally -0.1% (or -9 pts)  at 6,688 (up down -2.3% for month)

    The Fench CAC

    Down -0.7% (or -25 pts)  at 3,630 (up down 9587.8% for month)



    The Dollar Index

    Up 0.63% at 81.34

    The Australian Dollar

    Last traded at 95.86

    The Commodities Index

    Down -0.5% at 301.4



    Crude Oil Futures

    Down -2.4% at $83.69 (up down -0.2% for month)

    Gold Futures

    Up 1.3% at $1,383.60 (up down 1.5% for month)

    Copper Futures

    Up 1.4% at $3.8100 (up down 1.8% for month)

    SPI Futures

    Down  Marginally 0.0% (or -2 pts) at 4,591 (up down 0.3% for month)





    Market

    Movement

    SSE Composite (China)

    Down -1.6%  at 2,820 (up down -1.8% for month)

    Hang Seng Index (Hong Kong)

    Down -0.7%  at 23,008 (up down 0.6% for month)

    Nikkei 225 Index (Japan)

    Down -1.9%  at 9,937 (up down -1.0% for month)




    ASX News Today

    The SPI Futures is below its key support level of 4600 and the ASX is set to open flat as the SPI Futures closed flat (or -2 pts) at 4,591 (down -1.7% for month). The key levels for our index today are 4650 and 4550. M&A activity continues to drive specific stocks. The ASX is set to open flat today, with negative leads from overseas markets. Investors will need to monitor the 3Q GDP data out today, as economists are forecasting there was a contraction in 3Q10, with net exports providing a bigger drag than expected. Also of interest will be China re further prospective monetary tightening measures and the release of its Chinese PMI data today. Expect traders to be cautious especially ahead of these data releases.

    BOQ- ASIC plans to begin legal action against several domestic banks (BOQ, CBA, MQG) in seeking compensation for investors following the collapse of Storm Financial Ltd.

    CBA- CommBank say they will fight the legal action resulting from the Storm Financial collapse.

    FRS- FerrAus the iron ore explorer advised shareholders not to accept an unsolicited $230 million takeover bid from Hong Kong listed Wah Nam International Holdings Ltd.

    GDO- Gold One International has confirmed production guidance of 120,000 ounces of gold and earnings of $60 million in FY11.

    IHF- NorthWest Value Partners has increased its takeover offer for ING Real Estate Healthcare Fund and has won the right to undertake exclusive due diligence on the fund.

    LEI- Leighton has agreed a governance framework with ACS, the Spanish group bidding to take over Leighton’s German parent, Hochtief.

    MCC- Macarthur Coal will defer the announcement of its fourth mine project until early 2011, after it finalises commercial terms.

    MQG- Macquarie Group will acquire a 17.5 percent interest in capital and asset management firm Bluestone Group through the subscription of newly issued ordinary shares.

    MTS- Metcash the independent wholesaler, said its guidance for the 2H11 of its fiscal year is at risk if falling prices and rising business costs continue.

    NAB- National Bank has finally resolved the computing problems which effected millions of customers sice last week.

    NUF- Nufarm has arranged a new $900 million loan that will refinance the ag company’s existing debts due to expire on 15 December 2010.

    SFR- Sandfire Resources has increased its estimated resources fivefold for its DeGrussa copper-gold project in WA.

    TLS- Telstra to split as the parliament has finished the year by giving approval for legislation to structurally separate Telstra into wholesale and retail divisions.

    WPL- Woodside has confirmed costs for its Pluto LNG project have blown out by $900 million (total cost is now up 7% to $13.5 billion) and it will take another 6-months to begin production while it rebuilds equipment that falls short of design specifications.

    Economic Reports :

    Australian PMI for November
    Commodity Price Index for November
    GDP for Q3
    International Trade in Goods & Services Balance for October
    Retail Sales Report for October

    Companies:

    Centennial Coal Ltd (CEY) Full year 2010 AGM
    Consolidated Media (CMJ) Full year 2010 AGM
    Crown Ltd (CWN) Full year 2010 AGM
    Metcash Ltd (MTS) Interim 2011 Results
    Goodman Group (GMG) Full year 2010 AGM
    SEEK Ltd (SEK) Full year 2010 AGM
    White Energy Company (WEC)  Full year 2010 AGM

    Ex-Dividends

    GrainCorp (GNC)

    Market Summary

    ASX – to open lower
    US & UK/Europe – Lower
    US ADRs –  Broadly Lower

    BHP down 1.4% &
    RIO down ;
    AWC down 1.8%
    ANZ down 0.7% &
    NAB down 0.9%
    NEM up 1.3%,
    JHX up 2.9%,
    NWS down 1.9%

    Commodities Stock Index flat
    Gold Stocks Index up 0.4%
    Oil Stocks Index down 0.7%

    By Michael Hevern
    Head of Research

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    Stock Market Analysis: Weekly Market Wrap

    Friday, September 17th, 2010

    Weekly Market Wrap – Golden Week

    The market “melt-up” continues as the September rally extends into a third week. Australian stocks have had a great week, the US dollar sell-off has pushed commodity prices higher and even Japanese investors have joined in the party. Chinese investors however have been worried about interest rate hikes in the economy.

    US Markets

    US markets are at the top of their trading ranges which have held for the past six months. Stocks have been melting up for most of September, but on unusually weak volume which indicates that investors are yet to be convinced about the sustainability of the economic recovery. September is typically a seasonally weak month, however for the month-to-date the Dow Jones is up 5.8%, while the S&P 500 is up 7.2%, and the tech-heavy Nasdaq is outperforming, up 8.9%. Investors will be looking to the tech and mining sectors to provide an impetus to push through current levels. The Fed is reportedly going to implement further fiscal stimulus near term and this has pushed gold prices to new highs.

    Overnight the Dow closed up 0.2% at 10,595, while in the broader market the S&P 500 index was flat at 1,125 and the Nasdaq ended up 0.1% at 2,303.

    European Markets

    European stock markets have been mixed this week as investors balance the European governments’ struggle to contain their budget deficits against the resolutions of Basel III financial regulations. This agreement to implement new rules to strengthen the global banking sector against any new financial crisis was seen as a positive and investor sentiment picked up, especially as the banks will be given plenty of time to shore up their balance sheets.

    Trading volumes remain light. Overnight in London the FTSE 100 index closed down -0.3% at 5,540, the German DAX was down marginally -0.2% at 6,250, while in France the CAC was down -0.5% at 3736.

    Asian Markets

    Asian markets have been mixed this week. The Bank of Japan (BoJ) surprised the market by intervening in the FX market for the first time since 2004, to stem the strong yen. This news was initially received well by investors, but as yet there is still skepticism over how long intervention will be effective.

    The main driver in the Chinese market is the concern that interest rates will have to be increased in order to dampen the asset inflation in their economy. Overnight, Chinese shares dropped the most in 3 weeks and the Chinese SSE Composite closed down -1.9% at 2,602. In Hong Kong the Hang Seng Index was down marginally -0.2% at 21,691 and in Japan the Nikkei 225 Index was down marginally -0.1% at 9,510.

    Commodities

    Cotton prices are trading around 15-year highs. Gold has been a star performer again reaching record highs, as governments revisit another round of fiscal stimulus. Oil has had a mixed week and is backing off the $US78 high. Overnight the benchmark crude NYMEX for September delivery was down -2.0% to settle at $US74.50. Copper prices were higher, with copper for September delivery up 0.5% at $US3.4750. Gold prices are at record highs around the key $US1,250 level, with December gold up 0.4% at $US1,273.80.

    ASX News

    The ASX market is trading higher for a third week, assisted by the lower US dollar which is pushing commodities higher. M&A activity has been robust in the gold stocks sector as we highlighted last week. The ASX 200 is set to close above 4600 this week.

    Our View

    Markets have surged this month and are trading at key resistance levels. The ASX is testing the top of the trading range that has been in place for the past six months. We would expect to see some further consolidation next week, where the 4600 level will be key. The US market’s performance will impact the ASX and investors over there will be looking to the tech and mining sectors to provide an impetus to push through current levels.

    The S&P ASX200 is currently trading at 4632, at the top of the current trading range. The key level on the ASX is still around 4,600 and the key levels for our index next week are 4700 and 4450, with pivot at 4550. The momentum is still to the upside, though trading volumes are a concern and the 4600 level is key near term. Use the previous week’s close as your stop. Options volatility is subdued at the moment, which gives investors access to “cheap” protection, so investors may consider taking this opportunity to protect their portfolios.

    By Michael Hevern
    Head of Research

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    Stock Market Analysis: Positive Week as September Rally Continues

    Monday, September 13th, 2010

    Stock Market Analysis

    Positive Week as September Rally Continues

    Overseas markets continued to melt-up Friday, as they continued their September rally with most all market higher for the week (see below).  The ASX is set to trade higher today, on the back of good economic news from the U.S. and China which show those economies are not slowing as quickly as first feared.  The Aussie dollar hit $US 0.93 on the weekend as crude oil prices pushed higher, on supply and demand triggers.

    The SPI Futures is just above the key resistance level of 4600 the ASX is set to open higher as the SPI Futures closed  0.3% (or 12 pts) at 4,577 (down -0.2% for week).   The ASX is set to trade higher today.  The key levels for our index today are 4700 and 4500. M&A activity continues to drive specific stocks.   M&A activity is hotting up, particularly in the gold  mining sector, however gold prices have back off record highs and will likely weigh on gold stocks in the short term.  Oil prices are above the key $US75 level.  Options volatilty is subdued at the moment, which gives investors access to “cheap” protection, so investors may consider taking this opportunity to protect their portfolios.

    US Markets

    US stocks drifter higher on Friday. The September rally continued last week, as investors step into the market after a torrid August.  Economic reports are surprising to the upside, with the latest report on wholesale inventories showing  increases in July, which  was interpretted as a sign of confidence that retail sales will rise.  The “fly in the oinment” may be a resurfacing of concerns over EU debt issues, but at the moment investors are content to look to the bright side,  as there is now some hope in the job market and other parts of the economy such as trade figures.  Two stocks rose for every one that fell on the NYSE but trading volumes remain very low at  3.1 billion shares.  The Dow closed p 0.5% (or 48 pts) at 10,463 (up 0.1% for week), while in the broader market the S&P 500 index up 0.5% (or 5 pts) at 1,110 (up 0.5% for week) and the tech-heavy Nasdaq ended up 0.3% (or 6 pts) at 2,242 (up 0.4% for week).

    European Markets

    European markets closed flat on Friday, but were up around 1.3 percent  for the week. Investors have been concerned over debt issues and the state of Europe’s banking sector, as EU financiers met at Basel III over the weekend, to decide on measures and regulations that will attempt to avoid another GFC meltdown.  A report that German banking giant Deutsche Bank is considering raising new cash through a stock sale, also tempered gains. Trading volumes were again light.  In London the FTSE 100 index closed up marginally 0.1% (or 7 pts) at 5,502 (up 1.4% for week), the German DAX down marginally -0.1% (or -7 pts) at 6,215 (up 1.3% for week), while in France the CAC was down marginally 0.1% (or 2 pts) at 3,726 (up 1.5% for week).

    Asian Markets

    Asian markets closed higher for the week. The strong yen which is at 15-year highs, continues to weigh on Japanese exporters, though they did see some relief on Friday. Chinese shares trade higher on Friday, led by a rebound in major banks despite caution ahead of the release of inflation data for August on Saturday,  which  actually showed consumer prices accelerated at the fastest pace in nearly 2-years.  The inflation reading has risen 10 consecutive months, and shows China is not slowing as quickly as first feared.  In China the SSE Composite closed up 0.3% at 2,663 (up 0.3% for week), while in Hong Kong the Hang Seng Index was up 0.4% at 21,257 (up 1.4% for week) and in Japan the Nikkei 225 Index was up 1.6% at 9,239 (up 1.4% for week).

    Commodities

    The Dollar Index was flat at 82.873 on higher Euro, while the Australian Dollar last traded higher at 92.68.  Commodities were generally higher.

    Oil prices rose above $US74 this week, after the forecast for global oil demand for 2010 was raised and following the closure of a key pipeline carrying crude to the U.S.  The benchmark crude NYMEX for September delivery was 3.0% at $76.39 (up 2.8% for week). Copper prices lower, Copper for September delivery was down -1.06% at $3.3950 (down -2.8% for week). Gold prices are around 2-month highs, are around key $US1,250 level, with December gold down -0.35% at $1,249.60 (up 0.2% for week).

    Key News International Drivers Today

    US –   Wholesale inventories building. Companies continue to report earnings this week.
    EU –   Banks may need to raise EUR105 billion of extra capital under planned Basel rules.
    CHINA –  Chinese inflation reading has risen 10 consecutive months. Government stands firm on access to credit.
    JAPAN –  Japan exporters hurt as yen rose to a fresh 15-year high .
    Markets Overview


    Positive Week as September Rally Continues

    Market

    Movement

    The Dow Jones Industrial Average

    Up 0.5% (or 48 pts)  at 10,463 (up 0.1% for week)

    The S&P 500

    Up 0.5% (or 5 pts)  at 1,110 (up 0.5% for week)

    The Nasdaq

    Up 0.3% (or 6 pts)  at 2,242 (up 0.4% for week)

     

     

    The FTSE 100

    Up  0.1% (or 7 pts)  at 5,502 (up 1.4% for week)

    The German DAX

    Down  -0.1% (or -7 pts)  at 6,215 (up 1.3% for week)

    The Fench CAC

    Down  0.1% (or 2 pts)  at 3,726 (up 1.5% for week)

     

     

    The Dollar Index

    Flat at 82.873

    The Australian Dollar

    Last traded higher at 92.68

    The Commodities Index

    Up 0.71% at 275.1

     

     

    Crude Oil Futures

    Up 3.0% at $76.39 (up 2.8% for week)

    Gold Futures

    Down -0.35% at $1,249.60 (up 0.2% for week)

    Copper Futures

    Down -1.06% at $3.3950 (down -2.8% for week)

    SPI Futures

    Up 0.3% (or 12 pts) at 4,577 (down -0.2% for week)

     

     

     

     

    Market

    Movement

    SSE Composite (China)

    Up 0.3%  at 2,663 (up 0.3% for week)

    Hang Seng Index (Hong Kong)

    Up 0.4%  at 21,257 (up 1.4% for week)

    Nikkei 225 Index (Japan)

    Up 1.6%  at 9,239 (up 1.4% for week)


    SPI: Just Below key Level 4600 – SPI up 0.3% at 4,577 (down -0.2% for week)…

    ASX News Today

    The SPI Futures is just above the key resistance level of 4600 the ASX is set to open higher as the SPI Futures closed  0.3% (or 12 pts) at 4,577 (down -0.2% for week). The key levels for our index today are 4700 and 4500. M&A activity continues to drive specific stocks. The ASX is set to trade higher today.  M&A activity is hotting up, particularly in the gold  mining sector, however gold prices have back off record highs and will likely weigh on gold stocks in the short term.  Oil prices are above the key $US75 level.  Options volatilty is subdued at the moment, which gives investors access to “cheap” protection, so investors may consider taking this opportunity to protect their portfolios.

    AVO- Avoca Resources the Perth-Based explorer will merge with Turkish gold producer Anatolia Minerals Development to create an intermediate global gold producer called Alacer Gold Corporation.

    AXA- AXA Asia Pacific Holdings French parent has yet to give up on NAB’s bid for the local wealth manager

    CCL- Coca-Cola Amatil CEO Terry Davis says the company had no interest in joining the bidding for Foster’s Group’s wine business.

    COK- Cockatoo Coal says it may sell some of its Surat Basin assets in Queensland to Japan’s Mitsui & Co Ltd.

    FXJ- Fairfax Media Ltd will begin charging for some of its online news content when it launches its first subscription-based smartphone apps.

    GNS- Gunns CEO says that the timber company might stop logging native forests in Tasmania.

    JML- Jabiru Metals the base metals miner, upgraded its mineral reserves and has increased the life of its Jaguar project in WA by 3 years to 8 years .

    LLC- Lend Lease is partnering with Japan’s largest home builder, Sekisui House,  to develop several master planned community and apartment projects in Australia.

    NCM- Investors in Lihir Gold Ltd who sought the maximum share allocation from Newcrest Mining’s takeover bid will receive half allocation due to scaled back due to over-demand.

    VBA- Virgin Blue’s proposed alliance with Air New Zealand on trans-Tasman routes has been blocked by the competition regulator.

    WOW- Says Urbis report estimates new Geelong big-bax hardware store will add $30 million in sales year 1, and hit Bunnings BWP bottomline by up to 16%.

    Economic Reports :
    ABS – Releases July lending finance data
    Hotels.com to release its Hotel Price Index today

    Companies:
    VBA – Virgin founder Sir Richard Branson will speak to Business today

    Dividends
    AXA – AXA Asia Pacific Holdings Interim 2010 Dividend payment date
    CSL – CSL Limited Full year 2010 Ex-dividend date
    IVC – InvoCare Ltd Interim 2010 Ex-dividend date
    SXL – Southern Cross Media Full year 2010 Ex-dividend date
    DOM – Dominion Mining Ltd Full year 2010 Ex-dividend date
    WHC – Whitehaven Coal Full year 2010 Ex-dividend date
    WTF – Wotif com Holdings Ltd Full year 2010 Ex-dividend date
    WOW – Woolworths Ltd Full year 2010 Ex-dividend date

    Market Summary
    ASX – to open Higher
    US & UK/Europe – Higher<

    US ADRs –  Generally Higher!!!…

    BHP up 0.2% &

    RIO down  0.2%;

    AWC up 1.1%

    ANZ up 0.5% &

    NAB down 0.7%

    NEM up 0.8%,

    JHX down 0.2%,

    NWS up 0.3%

    Commodities Stock Index up 0.7%
    Gold Stocks Index up 0.5%
    Oil Stocks Index up 0.9%

    >By Michael Hevern
    Head of Research

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    Stock Market Analysis: Overseas Markets biggest falls since May; ASX to focus on RSPT

    Monday, June 28th, 2010

    Stock Market Analysis

    Overseas Markets biggest fall since May; ASX to focus on the Resource Super-Profits Tax (RSPT)

    U.S. stocks ended the week with the biggest fall since May. GDP growth was trimmed but Financials recovered somewhat after Congress passed a “diluted” FinReg bill.

    The SPI Futures is below the key level of 4500 the ASX is set to open lower as the SPI closed down 3 points (or 0.1%) at 4,414.  Key levels this week are 4550 and 4250. Expect our market to trade flat today. The proposed RSPT tax will continue to be in focus, with the new PM prepared to negotiate with the interested parties, the G-20 meeting report and FinReg in the US will be key this week.

    US Markets

    U.S. stocks ended the week with the biggest fall since May.  Stocks generally fell 5 to 7 per cent for the week, with energy and high-tech stocks particularly hit hard. The U.S. economy GDP grew at 2.7 per cent annual rate in the first quarter, lower than previously forecast. However the Financials sector saw some bargain hunting on Friday up 2.7% after Congress passed a “diluted” FinReg bill, designed to curtail risk taking and increase capital reserve requirements. The bill limits rather than prohibits the ability of federally insured banks to trade derivatives and invest in hedge funds and/or private equity funds.

    The Dow is down 9 points, or 0.1 per cent, to 10,143 (down 3.0% for week), while in the broader market the S&P 500 index up 3 points, or 0.3 per cent, to 1,076 (down 3.7% for week) and the tech-heavy Nasdaq ended 0.3 per cent higher at 2,223 (down 4.0% for week).

    European Markets

    European shares again slumped Friday night, as German car makers were downgraded causing the Automakers index falling 2.6 per cent. Spanish utilities weighed when the government said it would suspend any increase in electricity prices. Adding to BP’s worries is a forecast of a hurricane to enter the Gulf, further hampering any cleanup efforts. BP fell to 14 year lows down another 6.4%. The Euro managed to rise to $US1.2375. The G20 meeting was in Toronto this weekend, the security bill alone was over $900 million. G20 members are looking to endorse targets to tackle government deficits.

    In the U.K. stocks fells for a fourth day with energy and miners weighing around 3.5%. In the London FTSE 100 index fell 53 points (down 4.0% for the week), or 1.05 per cent, to 5,046 points. The German DAX down 45 points, or 0.7 per cent, to 6,070 points (down 2.7% for the week), while in France, the CAC 40 fell 33 points or 0.9 per cent, to 3,522 points.

    Asian Markets

    Asian markets traded lower Friday. At the G-20 China is expected to push for a bigger role in reshaping the global economy, post the GFC. In Japan the Nikkei index of the Tokyo Stock Exchange down 1.9% to end at 9,737. The benchmark Hang Seng Index was down 0.2% at 20,691  (up 2.1% for week), and China was down 0.5%  at 2,552  (up 1.8% for week).

    Commodities Overview

    Oil prices jumped 3% above US$77 a barrel Friday night on hurricane concerns in the Gulf. The benchmark for crude NYMEX for July delivery up 2.6 per cent to settle at US$79.91 a barrel.  Copper prices finished above the key $US3.00 a pound, Copper for July delivery up 4 cents to settle at $US 3.009 a pound. Gold closed higher, with August gold up 0.2% to settle at $US1,256 an ounce.

    Key International News Drivers Today

    G20 – meeting was in Toronto this weekend. The security bill alone was over $900million. Members are looking to endorse targets to tackle government deficits.

    CHINA – At the G-20 China is expected to push for a bigger riole in reshaping the global economy, post the GFC.

    GDP -  U.S. GDP for their first quarter 2.7% (lower than previously calculated).

    BP – shares fall to 14 year lows as a result of the oil spill in the Gulf of Mexico.

    YUAN – China to end its two-year yuan peg to the US dollar.  China has signaled a “more flexible yuan” currency policy, which will allow its currency appreciate in an orderly manner against the US dollar. The yuan has been pegged at 6.83 against the US dollar since mid-2008.  It will not be a one-off revaluation.

    OIL – Goldman Sach’s cuts its oil price forecast last week to $US87 for the next few months (vs previous $US96).

    Markets Overview

    U.S. Markets were Flat; ASX will Focus on G-20 Reports &; RSPT Progress

    SP500: up 0.3% at 1,076 – Below 200 day Moving Average  (down 3.7% for week)
    DOW  down 0.1% at 10,143 – Above 10,000   (down 3.0% for week)
    NASDAQ: up 0.3% at 2,223 (down 4.0% for week)

    Dollar Index: lower at 85.13 on Higher Euro
    A$ higher at 87.48

    FTSE: down 1.05% at 5,046 – Financials & Miners Weigh (down 4.0% for week)
    DAX down 0.7% at 6,070 – Off Highs but Still in Outperforming  (down 2.7% for week)

    CHINA: down 0.5% at 2,552 – Currency Allowed to Revalue (up 1.8% for week)
    HSI  down 0.2% at 20,691 (up 2.1% for week)

    Oil:  up 2.6% ($79.91) (up 3.5% for week)
    Good Week Ahead of Start of  Hurricane Season

    Gold: down 0.2% at ($1,256) (up 2.7% for week)
    Commodities Higher

    SPI: Below key Level 4500 ASX (down 3.7% for week)
    SPI down 0.1% at 4,414

    ASX News Today

    The SPI Futures is below the key level of 4500 the ASX is set to open lower as the SPI closed down 3 points (or 0.1%) at 4,414.  Key levels this week are 4550 and 4250. Expect our market to trade flat today.  The proposed RSPT tax will continue to be in focus, with the new PM prepared to negotiate with the interested parties, the G-20 meeting report and FinReg in the US will be key this week.

    AUD – higher at 87.48

    AAX – A subsidiary Ausenco the engineering and project management group has won an $8 million contract

    AGK – AGL plans to fast track its Macarthur wind farm project following changes to the Renewable Energy Target scheme approved by the Senate on Wednesday.

    EXT – Extract is moving its base to London as it seeks to develop the world’s second biggest uranium mine, expecting production in 2014.

    FGL – China’s BrightFoods is reported to be interested is selected wine assets, primarily those in NSW.

    GFF – Goodman Fielder says NZ’s removal of building depreciation for tax purposes will result in a non-cash write down in deferred tax assets by $13 million.

    IRN – in a trading halt, Indophil Resources is seeking a buyer for its stake in the Tampakan copper-gold project in the Philippines after China’s Zijin Mining Group abandoned a $545 million takeover bid for the company.

    M&A – activity has been crushed since the proposed RSPT was announced with M&A this quarter at totaling $879million (versus deals worth $9.1billion last year) according to a Bloomberg Survey.

    MCC – Chairman calls on New Prime Minister Julia Gillard to remove revenue from a proposed tax on resources from budget forward estimates.

    MOS – Mosaic Oil has sold its PNG subsidiary for $12.7 million in cash to an unidentified party described as a major international oil and gas company.

    MQG – Macquarie says market conditions are adversely affecting some of its business activity levels for FY11.  This prompted concerns that it may be the next to downgrade earnings. Shares dived 4.7%.

    PPT – Perpetual the Funds manager expects the Australian share market to continue on its uncertain trajectory for the
    next six to 12 months. Suggesting the ASX200 will trade between 4300 to 5000 for the next year.

    RIO – Rio Tinto Ltd has formally opened a high-tech operations center in Perth that remotely controls the mining giant’s vast network of mines, rail systems, infrastructure facilities and port operations in WA’s Pilbara.

    RSPT – any compromise reducing the RSPT tax take will constrict government spending budget.

    SSN – Samson Oil & Gas has entered into a binding deal to sell 24,166 acres of its 40,240 acre holdings in Wyoming, for up to $91.5 million.

    SDL – Sundance shares remain suspended from trading while the company rearranges its corporate governance.

    SVW – Seven Group is investing $287.16 million in the IPO which will see the last of China’s big four banks float its shares.  Qatar’s heavy weight investment fund, have stumped up $6.26 billion for the Agricultural Bank of China IPO even before the share sale officially starts.

    Economic Reports out today:  New PM – watch out for more commentary on RSPT tax

    Market volatility will continue near term, some speculative accumulation may surface in the miners, in anticipation of the resolution of the RSPT. We the suggest trading strategy is to tighten stops. Be prepared to take profits and open/hold short positions.  We are trading into the end of the financial year, so its the last chance to cleanup your portfolios.

    Market Summary

    ASX – to open flat
    US & UK/Europe – Generally Lower…

    US ADRs – Mixed!!!…

    BHP flat  & RIO down 0.4%; AWC up 2.0%
    ANZ down 0.3% & NAB up 0.5%
    NEM up 4.6%, JHX up 3.3%, NWS down 1.2%

    Commodities Stock Index up 1.2%
    Gold Stocks Index up 3.3%
    Oil Stocks Index down 0.6%

    By Michael Hevern
    Head of Research

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