Morning Market Report

The market is down 8 points. The ASX 200 Futures were up 20 this morning.

The Dow Jones finished up 78 –– it was up 119 at best and down 5 at worst. The intra-day all-time high of 15542 was hit in May. Now 15549. No surprises from the Ben Bernanke-Humphrey Hawkins testimony before the Senate Banking Committee overnight — a repeat performance. Weekly jobless claims better than expected — fell to 334,000 from 358,000 against consensus of 345,000. Leading index: Actual 0.0%, consensus 0.3%, prior 0.1% (revised 0.2%). Philadelphia Fed index hit the highest level in 2 years +19.8 against prior +12.5 and consensus +7.8. Detroit has filed for bankruptcy with debts of $17 billion.

Resources up — BHP and RIO down 0.46% up 0.04% in the US overnight. BHP closing up 18c on the close here last night. Both stocks have had short term rallies helped by reassuring comments from the Chinese premier about retaining a 7.5% growth target and after both companies reported somewhat better than expected production numbers this week … that is to say they weren’t as bad as feared.

Best sectors — financials (+1.3%), utilities (+1.0%) and energy (+0.9%). Worst sectors — telecoms (-0.9%) and technology (-0.2%).

US Results overnight

  • Baxter up 0.05%
  • BlackRock up 2.43%
  • Morgan Stanley up 4.37%
  • Nokia down 0.25%
  • Philip Morris down 0.51%
  • Safeway up 6.77%
  • SAP down 2.76%
  • Verizon down 1.52%
  • Advanced Micro up 5.94%
  • Google down 4.06% after hours
  • Microsoft down 6.60% after hours
  • IBM up 1.77%

ANNOUNCEMENTS & STORIES

  • Santos (STO) — Has cut its production forecasts due to problems caused by supply, weather and infrastructure. It has reduced production guidance to 52-55mboe from 53-57mboe. It was done due in part to deferred oil and gas production from the Chim Sao oil field in Vietnam due to problems with its offshore production and shipping facility. 2Q Revenue was $797m up 8% on year.
  • CFS Retail Property Trust Group (CFX) — Will spin off four Australian shopping malls into a separately listed company and use sale proceeds of $446.5 million to pay off debt. The malls, all located in mid-sized towns in Victoria, will be housed in a fund called Pacific Retail REIT, scheduled to list on the Australian Securities Exchange by September.
  • Mount Gibson Iron (MGX) — Quarterly activities report — expects to sell 9-9.5 million tonnes of iron ore in the 2014 financial year. The 2013 financial year iron ore sales of 8.8 million tonnes versus 5.2 million tonnes a year earlier.
  • Whitehaven Coal (WHC) — Has announced that a group has commenced proceedings in the Federal Court against the company and the Federal Minister for the Environment. The proceeds challenge the validity of approval granted by the minister for the Maules Creek Coal Project. The application contends that the minister committed errors of law in granting approval on Feb 11th 2013.
  • Resmed (RMD) — Succeeds in patent fight against APEX. A US government investigation against Taiwanese manufacturer APEX Medical Corp has resulted in an judgement determining that the International Trade Commission should enter a consent decree against APEX stopping the importing and sale of infringing APEX products.
  • Wesfarmers (WES – 3912c) — Released its quarterly production report this week. Numbers were slightly lower than expected as contract prices for their premium coking coal had fallen as steelmakers continue to switch to cheaper, lower quality coal. The company gave a rather negative outlook for coal for the September quarter  with a shift to lower-grade coking coal. Deutsche Bank has a hold recommendation with a target price of 3900c. JP Morgan has underweight on the stock with a target price of 3702c. They think the company’s investment thesis remains strong but the risk/reward at current levels is not attractive.