The market is down 1 — The SFE Futures suggested a 27 point fall in the market this morning. We were down 39 on the open.
The Dow Jones was down 77 overnight — It moved in a 93 point range and closed down on the back of some disappointing earnings results from Procter & Gamble and Qwest International and lower than expected consumer confidence numbers (two year low). The Federal Reserve began its two day meeting and will announce a decision on interest rates tomorrow (tonight). The interest rate futures suggest a 94% chance that rates will cut by 25bp to 4.5%, but The Wall Street Journal suggests that policymakers are deliberating whether to cut rates by 25bp or whether to take no action. The Conference Board’s gauge on consumer confidence fell to 95.6, the lowest level since October 2005, and according to the S&P/Case-Shiller home-price index, home values in 20 US metropolitan areas declined 4.4% in last year, strengthening the case for the Fed to cut rates. It has been a busy year for corporate activity, according to Bloomberg, the value of transactions surpassed last years total of $3.55 trillion last week. October was the busiest month with $262bn worth of deals. The NASDAQ finished unchanged. Apple up close to $200 a share, Microsoft up 3% and Google put on 2.3% to close just under $700 a share.
Resources down today, they were also down overnight (BHP down 3.5% and RIO down 3.3% in the US). BHP down 75c today to 4312c and RIO down 210c or 2% to 10980c. Metals all down overnight, Zinc down 2.1%, Copper down 1.1% and Nickel 0.3%. Aluminium down 0.1%. Zinifex down 80c to 1677c. Oil price down a big $3.12 to $90.33 on expectations that the government will show crude inventories increased last week and on news that Gulf of Mexico oil production was returning to normal after it shut a fifth of its output yesterday. Woodside down 134c or 2.5% to 5216c. Gold down $4.80. Newcrest up 2c to 3121c.
Lots going on today…
- St. George Bank (SGB) results are out — they are as expected and towards the top end of company guidance. After the disappointing results from ANZ last week there is some relief these results weren’t worse. Cash profit of $1.160bn for the year, up from $1.026bn last year. In line with expectations for a 13.6% increase to $1.162bn.
- Harvey Norman up another 5% to 682c (now up over 80% in the last year) on the back of their 1Q sales numbers (in line with expectations) and their earnings guidance (better than expected).
- Tabcorp Holdings (TAH) up 28c to 1556c, they announced the 12 year renewal of their Star City casino license and say it will grow business through additional gaming tables. This means they will remain the only casino operator in NSW, despite speculation yesterday that a second casino would be built. Under the new agreement Tabcorp’s average tax rate will gradually increase to 27.5% in 2013, from 24.1% currently.
- Macarthur Coal (MCC) up 3% to 883c on their quarterly production numbers and presentation. Demand strong but they have cut their production forecast for the year to 4m tones from 4.5m tons because of infrastructure bottlenecks — they use the Dalrymple Bay Coal Terminal in QLD.
- Origin (ORG) up 2% on its AGM — says underlying profit will rise 10-15% (previous guidance of +15%). Some relief that they haven’t followed the AGL profit warning. They say: “Key issues that could impact on this outlook included the timing of reaching full production on the Otway project and material movements in exchange rates.” One broker suggests looking to buy it around 900c. Now 933c.
- Nufarm up 11.5% on bid speculation this morning. The South China Morning Post says a private equity backed bid from China National BlueStar has been rejected by the company two weeks ago. That implies a bid at 1710c a share — now 1544c up 158c today.
- ROC Oil (ROC) down 11% this morning on the back of their quarterly report to the end of September. They tell us two Angolan Wells are not commercial.
- Macquarie Media Group (MMG) told investors at their AGM that each of their businesses have improved in the last quarter and are all performing strongly. MMG agreed to buy Southern Cross Broadcasting this year for around $1.35bn together with Fairfax (FXJ).
- Airports (MAP) have published an investor briefing today. Not doing much for the price. Down 4c to 434c.
- AGMs from Origin, Fosters, Suncorp-Metway, Perilya, Noni B, Fantastic Furniture, Macquarie Media, VPG, BPT and DRT.
- Companies going ex dividend tomorrow include CIW, FFI and SOL.
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