The market is down 8 — Resources up, the rest down. Our Futures were down 5 this morning. Dow Jones finished up 52 — hitting a new all-time high.

Volumes were below average in the lead up to the FOMC meeting, which is scheduled for tomorrow morning in the US. The Dow was up 99 at best and down 10 at worst with no major economic data released.

St. Louis Fed President James Bullard spoke in Frankfurt and talked down the expectations of winding down stimulus measures. He said that the US recovery had been disappointing and he could not see a good case for tapering stimulus unless inflation lifted.

European markets mixed — UK FTSE up 0.71%, Germany up 0.19%, France up 0.33%, Spain down 0.60%, Italy down 0.45%.

Metals down — copper down 0.39%, nickel down 0.26%, zinc down 0.18%, aluminium down 0.14%. Spot iron ore was up 60c to $123.60.

US 10-year bond yield was down 3pts to 1.93%. The VIX (Volatility Index) up 2.69%. Best sectors — healthcare, financials. Worst sectors — technology.

  • The WBC-Melbourne Institute consumer sentiment index was disappointing — falling 7% to 97.6 in May from 104.9 in April. Clearly the savings measures outlined in the 2014 financial year budget have offset any consumer joy flowing from the May RBA rate cut. Some 44% of survey respondents said they would be worse off due to the budget while only 5% said it would improve their lot. This adds to the case that the RBA may cut rates again before 2013 is out. Not terribly good news for consumer discretionary stocks.
  • Myer (MYR) — Third-quarter sales update – Has reported sales of $652.5 million, up 0.5% but slightly below a forecast of $660.2 million. The retailer says trading conditions remain challenging. MYR has now reported four consecutive quarters of positive sales growth. The company says it “remain cautious about the outlook for retail trading”. It did not provide sales or profit guidance for 2013 financial year and did not make any specific comments on either promotional activity or inventory levels in its release. Interim dividend of 10c fully franked. MYR is down 2.35% to 270c.
  • Stockland (SGP) — Announces a $400 million institutional share raising at 388c. SGP is down 2.89% to 386.5c.
  • §  RHG Limited (RHG) — Sub-prime lender Resimac and Australia Mortgage Acquisition Company (AMAC) have joined forces to make a $128m takeover for RHG at 38c plus a dividend of 3.5c. RHG is up 10.81% to 41c.
  • Seven West Media (SWM) — There is nervousness in the media sector after KKR & Co sold a $265 million stake in SWM last night. 119.9 million shares sold for 221c each. The sale came after a 39% rally in the share price this year. Today UBS have placed a Neutral rating on the stock with a target price of 180c. Despite positive TV momentum the stock trades on a PE of 10.6x 2013 financial year and above its  fundamental valuation. SWM has a gross yield of 7% and ROE 9%. SWM is down 8.77% to 208c.