Overseas Market Report – U.S. Stocks Lower Following Yellen Speech
U.S. stocks finished lower on Wednesday as investors digested economic news and a speech by Fed chair Janet Yellen, while a drop in oil prices weighed on energy stocks.
Yellen has expressed her confidence in improving market conditions, which if sustained would see an interest-rate rise in December.
According to data released Wednesday by payroll processing company ADP, private-sector employment picked up in November as businesses added 217,000 jobs, the most in five months.
The U.S. Labour Department said productivity was revised upward to 2.2% from 1.6% in the third quarter. The cost of labour appears to be accelerating, however, which could be an indication that a tightening labour market is forcing companies to pay more to attract or retain employees.
At the close the Dow was down 0.9%, the S&P 500 was off 1.1% and the NASDAQ was down 0.6%.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 42 cents (1.54%) to $26.89, ResMed fell 4 cents (0.07%) to $59.88, Telstra Corporation lost 1 cent (0.06%) to $19.96, Spark New Zealand dropped 42 cents (3.73%) to $10.84 and Westpac added 1 cent (0.04%) to $23.90.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.18% and the 5-year yield was 1.63%.
Shares of Yahoo! Inc. (YHOO) jumped after reports indicated the company's board is weighing a potential sale of the company's core business during a series of meetings beginning Wednesday and continuing through Friday. The board is expected to discuss whether to proceed with a plan to spin off more than $30 billion in shares of Alibaba Group Holding Ltd (BABA), find a buyer for Yahoo's core business of website properties, or both, according to reports.
European markets were mixed. The FTSE 100 was up 0.4%, the French CAC 40 was down 0.2% and Germany's DAX was down 0.6%.
Asian shares were also mixed. The Shanghai Composite jumped 2.3%, the Nikkei 225 fell 0.4% and the Hang Seng was up 0.4%. India's Sensex was off 0.2%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 53 points lower at 5,225.
Wednesday 2 December – close. The Australian market opened sharply lower despite a positive lead from Wall Street overnight. A better-than-expected Q3 GDP dragged the benchmark index back from its intraday lows, but failed to save the day as industrial stocks weighed heavily on the market, offsetting growths from the big banks. There were mixed results from the sectors; financials posted the biggest gains while health care lagged behind the rest. The Australian dollar depreciated against most major currencies.
The All Ordinaries lost 7.90 points to 5,304.70 while the S&P/ASX 200 fell 7.80 points to 5,258.30.
In This Issue
Argonaut Research | Salt Lake Potash (SO4) | Salt of the Earth | Initiation | SPEC BUY
Salt Lake Potash Energy (ASX & AIM: S04) is a dual listed ASX and AIM mineral exploration company with a focus on Sulphate of Potash (SOP). On 12 June 2015, the Company completed its 100% acquisition of Australia Salt Lake Potash Pty Ltd (ASLP) incorporating a number of salt lake brine SOP projects located in Australia, headlined by the Lake Wells Project in Western Australia. The Company’s assets have the potential to establish a world class SOP production base in Australia, a highly sought after commodity for national and international fertiliser markets.
Recently, the company put out its maiden JORC Mineral Resource Estimate of 29Mt SOP at Lake Wells with an average potassium (K) concentration of 4,009mg/l, calculated from 27 holes with an average depth of 16 metres. This makes Lake Wells one of the largest undeveloped salt lake brine projects in the world.
SO4 has all the ingredients necessary to become a top tier SOP producer, with a large resource, good brine chemistry, record evaporation rates (3 metres /pa), proximity to infrastructure and some demonstrated extractability of resource (Permeability). SO4 is completing a scoping study, due Q1 2016, which includes evaporation trials and pumping tests. We believe this will demonstrate the economic viability of the project.
Spotless Group Holdings (SPO)
Spotless Group Holdings announced that recent acquisitions are contributing positively to FY16 results, however it is taking longer than anticipated to fully integrate some of these businesses and realise synergies. The Company's full year FY16 results will be impacted by a series of one-off and other charges. The combination of these factors will mean that whilst revenue in FY16 will materially exceed FY15, EBITDA will be flat year on year, with NPAT 10% below FY2014. Excluding one-off charges, FY16 EBITDA is expected to exceed FY15 by 5% with NPAT to be flat year on year. Revenue in first half FY16 will materially exceed first half FY15, EBITDA will be flat half on half, with NPAT 15-20% below first half FY15. SPO dropped 88 cents to $1.33
Cromwell Property Group (CMW)
Cromwell Property Group announced that it has agreed terms for the sale of a commercial office tower at 100 Waymouth Street in Adelaide for $73m. The sale price represents a premium of 17.6% over book value of $62.1m, a yield of 6.775% and a capital value of $6,000/sqm, reflecting continued strong investor demand for commercial office stock in major capital cities. 100 Waymouth Street was acquired by the Company in April 2003 and was recently refurbished to PCA A grade standards. The property has 12,305 sqm of net lettable area, is fully tenanted and has a WALE of 8.1 years. The sale is expected to settle on 10 December 2015. CMW added 0.5 cents to $1.04.
Recent Contacts & Presentations
Tox Free Solutions (TOX), AWE Limited (AWE), Ausdrill (ASL), GR Engineering (GNG), Medusa (MML), Resolute (RSG), Kingsgate (KCN), Troy (TRY), Northern Star (NST), Sandfire (SFR), Regis (RRL), Saracen (SAR), Sino Gas & Energy (SEH), Dacian (DCN), Buru Energy (BRU), Carnarvon Petroleum (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), FAR Limited (FAR), Central Petroleum (CTP), Senex Energy (SXY)
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