Overseas Market Report – U.S. Stocks End Lower as Oil Falls
U.S. stocks finished lower Tuesday as steep declines in oil and global equity markets weighed on sentiment and appeared to offset earnings-driven jumps.
A fresh 4.5% drop in oil prices, which followed a 6% slide Monday, weighed on energy stocks, with the energy sector being the worst performer on the S&P 500.
At the close, the S&P 500 was 1.9% lower, the Dow was down 1.8% and the NASDAQ was 2.2% lower.
Alphabet (GOOG) (GOOGL) posted mixed fourth-quarter results, which beat consensus estimates for revenue and EPS, while falling short versus operating income projections. The quarter was the first time management reported financial results by operating segments (Google and Other Bets). As expected, Google generates almost all revenue for the firm (99.4% of total revenue in 2015) and all of the operating income as Other Bets generated an operating loss of US$3.6 billion for the year. Shares rose on the report, sending Alphabet's market cap higher than Apple's (AAPL), and making the firm the most valuable publically traded company.
Exxon Mobil (XOM) said its earnings fell to 67 cents a share in the fourth quarter from US$1.56 a share in the year-ago quarter. Still, earnings were above the 63 cents per share expected by analysts. The firm is under pressure from sharply lower oil prices. Shares dropped on the announcement.
Shares of BP (BP) plunged after the firm reported results that were below expectations. The firm said it lost US$5.2 billion in 2015 and said it is planning on cutting 3,000 more jobs and finding other ways to cut costs.
UPS (UPS) had better-than-anticipated fourth-quarter results. The firm earned US$1.48 per share in the quarter, a big rebound from the 49 cents a share in made in the year-ago quarter. Excluding one-time charges, the company made US$1.57 per share versus expectations that it would earn US$1.42 per share. Revenues rose year over year due to strength in domestic package deliveries.
Shares of Pfizer (PFE) were little changed after the firm reported solid quarterly results but provided a disappointing forecast. The firm reported core revenue growth as new drugs helped boost sales lost in the face of declining revenues from several former blockbuster drugs that have come off patent in recent years. However, for the full year, Pfizer management said both earnings and revenue would be below the level expected by analysts.
For Australian ADRs listed on the NYSE, BHP Billiton slipped $1.40 (6.44%) to $20.33, ResMed lost 18 cents (0.31%) to $57.05, Telstra Corporation lost 51 cents (2.53%) to $19.62, Spark New Zealand slipped 11 cents (1.00%) to $10.87 and Westpac declined 87 cents (3.96%) to $21.10.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 1.86% and the 5-year yield was 1.28%.
European markets were lower on the day.
The FTSE 100, French CAC 40 and Germany's DAX were off 2.3%, 2.5% and 1.8%, respectively.
Asian shares were mixed.
The Shanghai Composite was up 2.3%, while the Nikkei 225 fell 0.6% and the Hang Seng was down 0.8%. India's Sensex was down 1.1%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 69 points lower at 4,873.
Tuesday 2 February – close. The local market opened higher today on the back of gains on Wall Street. However, local shares fell below the flat-line soon after opening and closed lower, weighed down by the RBA decision to leave rates on hold. Most sectors ended lower, with only information technology closing with a gain. The Australian dollar fell against most major currencies.
The All Ordinaries fell 50.30 points (-0.99%) to 5,044.00 while the S&P/ASX 200 lost 50.30 points (-1.00%) to 4,993.30.
In This Issue
Navitas (NVT)
Navitas announced an on-market buy back of its ordinary shares for up to 7.5% of the shares currently on issue. The buyback is expected to commence from 16 February 2016. The Company Board believes the Company is in a strong financial position which facilitates a further return of capital to shareholders. Net debt was $46.8m at 31 December 2015 and there is significant headroom under existing long term debt facilities. The buyback will be funded utilising undrawn debt facilities. Morgan Stanley Australia has been appointed to act as brokers for the on-market buy back. NVT added 18 cents to $4.78.
Computershare (CPU)
Computershare confirmed that it has been appointed preferred supplier in the tender process to undertake the mortgage servicing activities of UK Asset Resolution (UKAR), which was established in 2010 to administer the closed mortgage books of both Bradford & Bingley and Northern Rock Asset Management. The appointment follows a rigorous tender process. The Company can work with UKAR on an exclusive basis to finalise details over the coming months, with a view to agreeing binding contract terms. The contract is for a 7 year term to undertake mortgage servicing activities on behalf of UKAR, with GBP30bn of assets under management. In addition, there are separate contracts for the servicing of the GBP13bn of assets purchased by Cerberus from UKAR in November 2015. CPU added 30 cents to $10.85.
Recent Contacts & Presentations
Troy Resources (TRY), Northern Star Resources (NST), Regis Resources (RRL), Medusa Mining (MML), Doray Minerals (DRM), Beadell Resources (BDR), Red 5 (RED), Kingsgate Consolidated (KCN), OBJ (OBJ), Sino Gas & Energy Holdings (SEH), TFS Corporation (TFC), Paragon Care (PGC), Austal (ASB), Orbital Corporation (OEC),Energia Minerals (EMX), Berkeley Energia (BKY) & Finders Resources (FND)
