Local shares are set to open lower on the back of a soft lead from overseas markets, while iron ore continued its downward slide, falling for the ninth-straight day.
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What you need2know:
• SPI futures are down 10 points to 5599
• AUD at 93.56 US cents, 97.00 Japanese yen, 70.97 Euro cents and 56.40 British pence
• On Wall St, S&P 500 -0.2%, Dow -0.2%, Nasdaq -0.3%
• In Europe, Euro Stoxx 50 -0.9%, FTSE -0.4%, CAC -0.7%, DAX -1.1%
• Spot gold up 0.6% to $US1289.84 an ounce
• Iron ore falls 1% to $US87.30 a metric tonne
• Brent oil down 0.2% at $US102.47 per barrel
What’s on today
Earnings from Harvey Norman, Peet, Perseus Mining, Transfield Services, Virgin Australia, Woolworths;
Australia private sector credit;
Japan jobless rate, CPI, retail trade and sales; China leading index; German unemployment, CPI; UK GfK consumer confidence; Eurozone unemployment, CPI; US personal income, personal spending, Chicago PMI, UoM consumer sentiment
Stocks to watch
Earnings from Harvey Norman, Peet, Perseus Mining, Transfield Services, Virgin Australia, Woolworths
Hartleys Research has retained a “buy” on MACA Ltd after the mining services company reported solid 2014 results.
Commonwealth Bank retained an “overweight” recommendation on Horizon Oil and revised its price target to 50¢ a share from 55¢ a share after it reported and gave details on Stanley drilling results.
Macquarie Research is maintaining an “outperform” on Horizon Oil and now has a 55¢ a share 12-month price target on confirmation that Maari growth initiatives are delivering production additions in the 3Q14 results, spudding of the 150bcf Nama prospect in PPL 259 in 2H14 and further progress surrounding Stanley development.
RBC Capital Markets has raised Whitehaven Coal to “sector perform” and increased its price target to $2 a share from $1.50 a share.
RBC Capital Markets has downgraded earnings estimates on Drillsearch, but kept an “outperform” and “speculative risk” call on the stock with a $2 a share price target.
The following stocks will trade ex dividend today: Aurizon, Carlton Investments, Challenger Ltd, SAI Global, Wesfarmers.
Currencies
The Australian dollar has spent the week displaying remarkable resilience in the face of generally negative news events, said Niall King sales trader at CMC Markets. “Some glittering macro data points from the US has seen the greenback appreciate against many of the majors, while last week’s manufacturing data miss sparking renewed concerns around Chinese growth prospects has been subsequently compounded by a significant slump in the price of iron ore. However, where our counterparts have come unstuck against the US dollar, the Aussie has held firm with its ongoing relative yield allure helping it to ascend comfortably north of US93
Commodities
Two commodities that have held their ground amid a resurging US dollar have been copper and gold, notes Tim Radford, global investment manager at Rivkin Securities. “Copper has been supported by a strengthening US economy and improving sentiment around China. But most interestingly, is that gold has hung in there despite the US Federal Reserve’s shift away from stimulus. It seems this shift has been priced in for some time.
“While gold is hanging in at crucial support at $US1280 to $US1275 an ounce, prices continue to struggle in finding upside direction. This may soon change though. Longer-term, after big declines in 2013, prices have built out a strong base of support and appear to be setting up for a strong trending move. The question is in which direction?”
United States
A trio of economic reports pointed to improving conditions. The US economy rebounded more strongly than initially thought in the second quarter, with gross domestic product growing by 4.2 percent. Separately, jobless claims fell for a second straight week, the latest sign of improving labour market conditions, and July pending home sales rose far more than had been expected. “This data is so good and so strong that it raises the concern that the Federal Reserve will have to come in earlier when it comes to raising rates,” Voya Investment Management chief market strategist Doug Cote said.
US stocks edged lower on Thursday after the latest spark of tensions between Ukraine and Russian forces, snapping investors' focus back on the volatile region, but the latest batch of US economic data helped curb losses.
The Dow Jones industrial average fell 41.93 points or 0.24 percent, to 17,080.08, the S&P 500 lost 3.32 points or 0.17 percent, to 1,996.8 and the Nasdaq Composite dropped 11.93 points or 0.26 percent, to 4,557.70.
Europe
European stock markets have ended down. London’s benchmark FTSE 100 lost 0.36 per cent, ending on 6805.80 points, while in Paris the CAC 40 slipped 0.66 per cent to 4366.04 points. Frankfurt’s main DAX index fell 1.12 per cent to 9462.56 points.
Euro-area economic confidence fell more than forecast in August, while Spanish consumer prices dropped the most in five years and German unemployment unexpectedly rose in a burst of data backing Mario Draghi’s warning that more stimulus may be needed. An index of executive and consumer sentiment fell to 100.6 this month from 102.1 in July, the European Commission in Brussels said on Thursday. That’s the lowest this year and missed the median estimate in a Bloomberg survey for 101.5.
What happened yesterday
Australian shares fell as the penultimate day of August company reporting season delivered some soft results, the iron ore price kept falling and official statistics showed the economy’s transition from mining to non-mining-led business investment is still struggling. The benchmark S&P / ASX 200 Index and the broader All Ordinaries Index each lost 0.5 per cent on Thursday, to 5624.4 points and 5621.3 points respectively. Surprisingly, Qantas Airways was the standout performer of the day. The stock flew ahead despite revealing a massive blowout in its annual loss.
