With a weak lead from Wall Street, local investors will be awaiting fresh corporate results before seeking to drive Australian shares still higher.
What you need2know:
• SPI futures slid 10 points to 5599
• AUD at 92.97 US cents, 96.93 Japanese yen, 70.41 Euro cents and 56.15 British pence
• On Wall St, S&P 500 -0.2%, Dow -0.2%, Nasdaq +0.1%
• In Europe, Euro Stoxx 50 -0.8%, FTSE -0.04%, CAC -0.9%, DAX -0.7%
• Iron tumbles 2% to $US90.10 per metric tonne
• Spot gold up 0.3% to $US1280.08 an ounce
• Brent oil down 0.3% at $US102.29 per barrel.
What’s on today
Earnings from BlueScope Steel, Caltex Australia, McMillan Shakespeare, M2, NIB Holdings, Orora, PFL, Recall Holdings, Australia CBA/HIA house affordability; US new home sales.
Stocks to watch
Earnings today from: BlueScope Steel, Caltex Australia, McMillan Shakespeare, M2, NIB Holdings, Orora, PFL, Recall Holdings.
Shaw Stockbroking has a “buy” recommendation on Mermaid Marine, which it rates as “high risk” with a price target of $3.20 a share.
Morningstar has a “hold” recommendation on Trade Me following the release of its full year results for the financial year ended June 30, 2014, and expects the share price to reach a fair value of $3.60.
Macquarie Research has a positive take on Village Roadshow saying the stock will “outperform” in the next 12 months. It says VRL is an attractive investment opportunity and has a 12 month price target of $8.50.
Federal Reserve chair Janet Yellen called for a “pragmatic” approach to US monetary policy on Friday, amid calls by hawkish members of the central bank’s policy committee for a quick rise in interest rates due to tightening labour markets and inflationary risks.
Five months after the US Mint began producing coins made with platinum, sales have all but collapsed as investors continue to favour gold and silver. “It’s not considered a currency,” said Jason Carstensen, a medical-sales representative in Ventura, California, who spends about $US2000 a month on coins, according to Bloomberg.
Nickel fell 0.4 per cent to finish at $US18,750 per tonne after data showed excess supplies on the market. The global nickel market had a 1800 tonne surplus in June in contrast to a 3300 tonne deficit the month earlier.
Baoshan Iron & Steel Co Ltd (Baosteel), China’s biggest listed steelmaker by stock market value, posted a 14.8 per cent fall in first-half net profit, reflecting weak prices and slackening demand growth, the company said on Friday.
Gold prices edged up on Friday as US equities slipped, but gains were limited. “I see no reasons to own gold, which is likely to trend lower with rallies being sold. The Treasury yields at under 3 per cent and crude oil prices showing signs of a recession are significant headwinds for precious metals,” said Jonathan Jossen, COMEX gold options floor trader in New York.
Despite losses on Friday, all three major indexes posted gains for the week, with the Dow up 2 per cent, the S&P up 1.7 per cent and the Nasdaq up 1.6 per cent. It was the strongest week of gains for both the Dow and the S&P since April, and the third straight week of gains for all three indexes.
Goldman Sachs Group will pay $US3.15 billion to settle claims from the US housing finance regulator that it sold bad mortgage-backed securities. Goldman said it would repurchase the securities sold to Fannie Mae and Freddie Mac over the 2005-2007 period.
Optimism about near-term market direction hit a nine-month high in the latest AAII Sentiment Survey, with 46.1 per cent of respondents expecting gains over the next six month. “There’s a good underlying tone in the market and we still have plenty of prospects for more gains,” said Michael Mullaney, chief investment officer at Fiduciary Trust Co in Boston. He added that he would not be concerned about valuation until the S&P’s forward price-to-earnings ratio was 17 and its trailing P/E was 20. Those metrics currently stand at 15.7 and 17.4, respectively.
European shares fell on Friday after a brisk two-week rally, hurt by a ratcheting-up of tensions in Ukraine, although traders said Yellen’s dovish tone limited losses. “European indexes are halted by big resistance levels. At this point, investors should think about hedging their portfolios,” Aurel BGC chartist Gerard Sagnier said.
German venture capital firm Rocket Internet and Zalando, Europe’s biggest specialist online fashion retailer, are both on the brink of announcing plans to list on the Frankfurt stock exchange, several sources with knowledge of the matter said.
Royal Bank of Scotland might split its international private bank into separate European and Asian divisions to attract Asian buyers who have the financial muscle for a deal but are reluctant to take on European client risk.
What happened on Friday
The local sharemarket added 0.1 per cent. Oil and gas producer Santos was a highlight, adding 3.9 per cent to $15.16 on Friday after announcing a bumper dividend. The stock rose 5.3 per cent over the week.
Energy was the best-performing sector over the week, up 3.6 per cent. Origin Energy lifted 5.6 per cent to $14.84 despite showing a weak full-year profit on Thursday as the company shared a more optimistic outlook for this year.
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