The market is up 16 points. Dow Jones was up 111 points to 15,680. The market was up from the start, opening three points higher and finished almost on its highs in a 110 point range.

The S&P was up 10 to 1772.

Earnings and Economics once again dominated the picture. Headline retail sales fell 0.1% but excluding autos they rose 0.4%, ahead of estimates. It was the same story for PPI. Weaker than expected headline number (which indicates no pricing pressure) but the core number was in line. The main positive was the Case-Shiller home price index which rose 12.8%, whereas consumer sentiment disappointed, falling to 71.2. There was probably some impact from the government shutdown on the sentiment index.

Oil fell almost 1% to US$97.70.

Gold fell US$7.70 to US$1344.50 per ounce.

The US$ rose against most major currencies. The Aussie dollar was weaker, ending up down almost a cent to US$0.9484. Comments from RBA Governor Glen Stevens were behind the $A weakness.

VIX volatility index rose 0.75% to 13.41.

US treasuries were stronger — The 10 year yield was 0.5 basis points higher at 2.507%. A bond auction of $35 billion 5 year notes was in line.

European share were stronger. The UK FTSE was up 0.73%, French CAC up 0.62% and the German DAX was up 0.48%.

European bonds were generally stronger. Portugal bucked the trend.

Base metal prices mixed — Copper, nickel and zinc rose but aluminium fell 0.65%.

Iron ore fell — down US$0.50 a tonne on top of yesterday’s US$1.50 a tonne fall.

STORIES

  • RBA Governor Glenn Stevens spoke at a Citi conference yesterday saying that they would prefer a lower Australian dollar to further lower lending interest rates. The $A fell immediately after the statement, trading below US$0.95 for the first time in three weeks.
  • FOMC meeting kicks off — a statement is expected Thursday afternoon US time. A survey by CNBC found respondents expecting the Fed to maintain its $85 billion level of monthly asset purchases until April 2014. Respondents also thought the Fed would end its purchases in December 2014, compared with August in the previous survey. Even though it’s supposedly off the agenda, the pondering continues …
  • Banks — ANZ results set a great tone yesterday although it had already run hard into results. Customer deposits were up, loans advanced, credit quality improved with lower impaired assets and they saw cost improvements. CEO Mike Smith said “there is more gas in the tank.” Not enough to quash demand from income hungry investors who will not be selling ahead of the dividend. No one is saying the banks look cheap — the sector is at the expensive end of its PE and yield trading range, trading 20% above average on a PE basis. But you wouldn’t be selling them as an investor. They are all quality income stocks — you could still buy them as an investor with a long term outlook. NAB is the next off the rank — reporting Thursday (tomorrow).
  • Crown (CWN) — AGM — Has flagged its main floor gaming revenue at the Australian casinos in Melbourne and Perth has been flat so far this financial year amid weak consumer sentiment. Non-gaming revenue at the two casinos was up by 10% on year. Trading has also been hit by refurbishments at the Crown and temporary loss of car parking spaces at the Perth venue.
  • Fortescue Metals Group (FMG) — Is looking to take advantage of favourable credit market conditions by reducing the interest rate applied to its $US5 billion senior credit facility maturing in October 2017. The debt facility currently has a total coupon rate of 5.25%. The company is also looking to extend the maturity term of its loan but says the move will not increase its overall debt position.
  • Transpacific Industries Group (TPI) — AGM — Has put its NZ assets up for sale to help reduce debt that has plagued it since the global financial crisis. The sale is expected to generate earnings of around NZ$110 million. The company had net debt of A$977.5 million.
  • iiNet (IIN) — Investor presentation at Citi Investment Conference.
  • Warnambool Cheese and Butter (WCB) — Bidding war heats up — Another bidder entered the foray yesterday to gain control for the company. Japanese food giant Kirin has taken a 9.99% stake in the company. Last week, Canadian dairy giant Saputo lifted its takeover bid for Warrnambool Cheese to $8.00 a share. WCB has also received offers from Bega Cheese and Murray Goulburn. New Zealand’s Fonterra has stuck to the sidelines but is also apparently considering a tilt. Warrnambool’s market value has soared from $252 million to $492 million in six weeks.