The market is up 28 points. Dow Jones closed up 206 — US stocks finished close to their highs as US Senate leaders reached agreement on the debt ceiling. They will vote later today. Under the arrangement, the government will be funded until January 15 and the debt limit will be suspended until February 7.
The S&P closed up 1.4% to 1722.
The US Fed Beige Book was released, stating that “national economic activity continued to expand at a modest to moderate pace”. The two key words “modest” and “moderate” were unchanged from the last report.
Gold was up $8.90 to US$1282.10 per ounce.
VIX volatility index fell 21.2% (good) to 14.71. While everyone expected a deal to be struck by US policymakers, the removal of risk improved sentiment.
The US partial government shutdown has delayed the release of lots of economic data, including CPI.
European share markets were stronger on expectations a US deal would be reached. European bonds were mixed.
US Treasuries rose — the yield on the 10 year bond fell six basis points to 2.67%.
The US$ was mixed major currencies, up against the Euro and Yen but weaker against Pound.
The Aussie dollar was up, and is trading near its highs of US95.50.
Oil prices rose 1% — WTI fell 1.34% as the US stalemate continues.
Base metal prices were generally stronger — Lead was up 1.11%, nickel 0.87%. Tin and zinc were weaker.
RESULTS & STORIES
- Woodside Petroleum (WPL) — Third quarter production report. Production came in at 21.9mboe which was down 17.4% on the year. Third quarter revenue fell 27% after oil and natural gas projects were shut for repairs and maintenance. Revenue came in at $US1.3 billion. The company did stick to its annual production guidance of 85m-89mboe. WPL plans to take a 30% stake in the Leviathan natural gas field offshore Israel. The project has been slowed down by a legal challenge to the country’s natural gas export policy. The Israeli Supreme Court is due to meet on Oct 20 to consider the challenge.
- Boral (BLD) — Will enter into a agreement with a US firm to create a $US1.6 billion joint venture. Boral has signed a deal with USG, the largest north American plasterboard manufacturer, to establish a joint venture covering Asia, Australasia and the Middle East. USG will pay Boral up to $US500 million to bring the venture to a 50/50 partnership. BLD will also earn up to $75 million if it reaches certain targets. The deal is expected to be completed by January 31, 2014.
- Atlas Iron (AGO) — Third quarter production report — has reiterated financial year 2014 shipping guidance of 9.8-10.3 million tonnes of iron ore. The miner also says Mt Webber is due to start mining in second quarter. First quarter EBITDA is about $91 million and first quarter shipments were 2.4 million tonnes above the 2.2 million tonnes in the previous quarter.
- Challenger (CGF) — Is an investment management firm focusing on providing Australians with financial security in retirement. It provides its customers with annuity type products. The stock is up 5% this morning after reporting Funds Under Management report. Total assets and FUM were $46.1 billion up 31% for the year and up 3% for the quarter.
- Newcrest Mining (NCM) — Quarterly Production report — first quarter gold output was 586,573 which was down 9% on the quarter. First quarter copper output was 19,632 tonnes which was down 14% on quarter. Despite both gold and copper being down on the previous quarter the miner has kept financial year 2014 guidance unchanged. All in costs were $1093/oz compared to the average gold price of $1442/oz. The company said it faces an additional tax charge of around $120 million after amending some previous claims for research and development. It also says it are ready to “take further action” if gold remains weak.
- The Reject Shop (TRS) — AGM yesterday — Expect profit to grow in the next 2 years as it continues to roll out new stores, with 41 opened this year. Another six are penciled in before Christmas. The company made a profit of $19.5 million in 2012/13. It expects solid profit growth in the current year and will be well placed for growth in 2014/15.
- Sealink Travel Group (SLK) — Successfully listed on the ASX yesterday, rising 36% on its first day and adding $28 million to its value. The company is a ferry and tour boat operator that travels to Kangaroo Island in South Australia as well as from Townsville in Queensland and out of Darwin in the Northern Territory. It also owns the Captain Cook Cruises tour company on Sydney Harbour and offers other tourism services. The company raised $16.5 million which will be used to buy new vessels.
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