ULTRA SHORT EDITION TODAY (Other commitments)
The ASX200 is up 22 points in mid-morning trade. US closed overnight. Materials the main drag, Banks and Industrials up. TLS rally continues. CTX and WOW extend deal. 2 downgrades for DMP. FOMC minutes tonght #ausbiz
LAST NIGHT ON THE BUSINESS
Click on the link below (copy into your browser) to see me on The Business last night.
TONIGHT
- European Retail PMI
- BoE Gov Carney Speech
- US data – ADP Employment Change, ISM Services, FOMC Minutes
COMPANY NEWS
Woolworth (WOW) and Caltex (CTX) New 15-year wholesale fuel arrangement. The pre-tax benefit is expected to exceed $80 million per annum and will accrue to the Woolworths Petrol business which will continue to be treated as a discontinued operation for accounting purposes. In addition, Caltex will make a one-off payment of approximately $50 million to the Woolworths Group. Woolworths Group will continue to pursue an IPO or sale of its Petrol business and an expanded management team has been put in place to position it for growth on a standalone basis. James Goth, Director Corporate Development for Woolworths Group, has been appointed Chief Executive Officer, and Angus Armstrong, currently General Manager, Fuel and Metro, has been named Chief Operating Officer.
- 125 Caltex sites to be added to Woolworths’ existing 638 site redemption network
- Woolworths Group and Caltex to co-create a market-leading convenience offering on up to 250 sites under the Metro banner
- Woolworths Rewards extended to the Caltex network
- Caltex fuel supply arrangements extended for 15 years on improved terms for Woolworths Petrol business
- Woolworths Group will continue to pursue an IPO or sale of its Petrol business
ANALYST CHANGES
Dominos Pizza (DMP $53.84) – 2 broker downgrades today
- Citi has downgraded to a Sell (from Neutral) recommendation with a target price of $46.30 (from $44.60). The analysts have downgraded due to sharp rally in the share price (since they upgraded just 3 weeks ago) and the realisation operations in Japan are not meeting expectations. Citi believes market consensus forecasts are due for a downgrade
- Credit Suisse has downgraded to an Underperform (from Neutral) recommendation with a target price of $36.42 (from $42.47). The analysts cite structural risks: the franchise industry inquiry, rising labour costs, aggregator expansion, franchisee attrition, huge growth needs in Europe and uncertainty in Japan. They have lowered network forecasts and believe organic store openings are lagging guidance.
OVERNIGHT
SPI FUTURES +12
US markets closed
EUROPEAN MARKETS – MIxed. STOXX 600 +0.06%, UK FTSE -0.27%, German DAX -0.26%, French CAC +0.07%.
CURRENCIES
- The US dollar was little changed at 94.67
- The Aussie dollar was also little changed at US73.84c.
COMMODITIES
- Brent crude closed up US7c or 0.6% to US$77.83 as US inventories dropped by 4.5mb due to the outage at Syncrude (expected to last during July).
- Gold futures were up 0.3% at US$1,257.50.
- Iron Ore – IRESS reports iron unchanged at US$67.00 a tonne. The CommSec site says China Import (Fines 62% Fe) was down 40c at US$63.35/dry ton. (CFR Tianjin port)
- LME metals – Mostly lower. Cu -1.62%, Ni -2.08% and Al +0.43% the exception
QUOTE OF THE DAY
“We all have different desires and needs, but if we don’t discover what we want from ourselves and what we stand for, we will live passively and unfulfilled.” – Bill Watterson, American cartoonist born this day in 1958.
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