MID-MORNING MARKETS 15-12-17

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OVERNIGHT SPI FUTURES +-3 US EQUITIES – S&P500 -11 (-0.41%), Dow Jones -77, Nasdaq -19 Main themes – Stronger than expected retail sales data – up 0.8%. ECB and BofE leave rates unchanged EUROPEAN MARKETS – All lower after ECB left rates unchanged. STOXX -0.46%, UK FTSE -0.65%, German Dax -0.44% and French CAC -0.78%.… Continue reading MID-MORNING MARKETS 15-12-17

MID-MORNING MARKETS 14-12-17

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OVERNIGHT MARKETS SPI FUTURES +21 US EQUITIES – S&P500 -1, Dow Jones +81, Nasdaq +13 Main themes – Fed raises interest rates 25 basis points, as widely expected, to 1.25-1.50% Dot plot chart remains the same for 2018 – with 3 rate rises implied – but a more aggressive rate-hike path in the long run… Continue reading MID-MORNING MARKETS 14-12-17

MORNING MARKETS 13-12-17

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OVERNIGHT

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SPI FUTURES -1

US EQUITIES – S&P500 +4 or 0.15%, Dow Jones +119 but the Nasdaq -13 as technology stocks underperform,

Key themes –

  • Optimism about Trump’s tax deal. Tentative deal today.
  • Financials outperformed ahead of FOMC decision
  • PPI data a little stronger than expected. Core PPI up 0.3%.
  • Boeing (BA) +2.39% after raising its dividend 20% and approving a new $18bn share repurchase program
  • Rand Paul says he cannot vote to add more to “massive” US debt

EUROPEAN MARKETS – Mostly higher – STOXX +0.66%, UK FTSE +0.63%, German Dax +0.46% and French CAC +0.75%.

CURRENCIES

  • The US dollar closed 0.23% higher at 94.09.
  • The Aussie dollar is a stronger at US75.60c.

BONDS – 2-yr: -1 bp to 1.81%, 5-yr: +2 bps to 2.17%, 10-yr: +2 bps to 2.40%, 30-yr: +1 bp to 2.78%

COMMODITES

  • WTI oil fell 1.4% or US85c to US$5714. Brent oil closed down 1.7% at $63.59 after earlier rallying above $65, for the first time since June 2015, on a shutdown to the Forties pipeline system due to a widening crack. The pipeline carries up to 450kbpd and has been operating at reduced capacity over the last few days, prior to the shutdown.
  • Gold futures fell to 5 month lows, down US$5.20 or 0.4% to $1,241.70, ahead of the Fed meeting
  • Iron ore up US60c to US$69.60
  • LME metals mixed – Copper -0.10%, nickel -1.56%, aluminium +0.702%.

NEWS, DATA AND POLITICS

US economic data – November PPI 0.4% (consensus: 0.4%; previous: 0.4%) and core PPI 0.3% (consensus: 0.2%; previous: 0.4%)

TODAY

  • Economic data – The Westpac Consumer Confidence Index rose to 103.3 (from 99.7), the highest since December 2013. Also HIA new home sales
  • RBA – Speech be RBA Governor Philip Lowe, currently discussing crytocurrencies and the future of electronic currencies. He calls bitcoin a “speculative mania”.
  • Japanese machinery orders

TONIGHT

  • FOMC meeting result and CPI. There will be interest in the Fed’s projections of rates, currently for 3 rate hikes next year. However, any incorporation of Trump’s tax cuts into Fed forecasts may see a more hawkish outlook.

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    • European employment change, industrial production
    • UK earnings and unemployment
    • Thursday sees meetings by the BofE and ECB

COMPANY NEWS

Westfield (WFD) – Trading Halt. Yesterday said “Westfield is in discussions in relation to a potentially significant corporate transaction, which is pending announcement to the market.”

Today, news that Unibail-Rodamco has acquired WFD in a $32bn deal, effectively at $10 (last traded at $8.50), representing a premium of 17.8%. Scrip and cash -. 0.01844 Unibail-Rodamco stapled securities (which will trade as one single security) plus US$2.67 in cash for each Westfield security (“Cash Consideration”) (together, the “Offer”). Westfield shareholders will hold around 28% of the group.

The Group intends to establish Chess Depositary Interest (“CDI”) listed on the ASX which will be fully exchangeable with the new Group’s stapled securities18 listed in Amsterdam and Paris. Westfield securityholders will be able to elect whether to receive the Scrip Consideration in Unibail-Rodamco stapled securities or the Group’s CDIs. The Group’s CDIs listed on the ASX are expected to be eligible for S&P index inclusion in Australia.

The Lowy family is committed to the success of the Group and intends to maintain a substantial investment in the Group. The 90% interest in OneMarket (formerly Westfield Retail Solutions), Westfield’s retail technology platform, will be spun-off from Westfield into a newly formed ASX listed entity.

Expected to be completed in 2Q2018.

BHP Billiton (BHP) – Looking at a sale or spin-off of the shale oil and gas unit. It will keep its conventional assets in the US Gulf of Mexico, Australia and Trinidad and Tobago.

AGL – Investor Day presentation and segment reclassification, it would split its Energy Markets operating segment into two new operating segments, Wholesale Markets and Customer Markets, effective 1 July 2017.

Cleanteq (CLQ) – awarded a contract to supply DeSALx® technology for mine water treatment plant.

MARKETS AT 11

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