Overseas Market Report – U.S. Stocks End Slightly Lower
U.S. stocks closed slightly lower on Tuesday after a choppy session, after a selloff in biotechnology and health-care stocks overshadowed gains in the energy and materials sectors.
The U.S. trade gap widened 15.6% in August to $48.33 billion. Economists had expected a larger $48.5-billion deficit. Imports were up 1.2% while exports were off 2% in the month as a strong dollar weighed on demand for U.S. goods.
At the close the Dow was up 0.1%, while the S&P 500 and NASDAQ were off 0.4% and 0.7%, respectively.
For Australian ADRs listed on the NYSE, BHP Billiton added 55 cents (1.63%) to $34.26, ResMed gained 26 cents (0.49%) to $52.92, Telstra Corporation rose 1 cent (0.05%) to $20.41, Spark New Zealand lifted 9 cents (0.92%) to $9.87 and Westpac increased 16 cents (0.74%) to $21.90.
At 7:45 AM (AEST), the 10-year Treasury note yield was 2.04% and the 5-year yield was 1.33%.
Shares of PepsiCo (PEP) were up after the firm reported third-quarter results. The firm continued to enjoy solid pricing power, with reported net effective pricing up 6% year over year, including 2% gains in Frito-Lay and North America beverages. Beverage volume growth also ticked up to a 1% clip versus flat in the prior quarter. Again, North America was a standout here, with 3% volume growth, driven by 10% growth in noncarbonated drinks. Core operating margins climbed 60 basis points to 17.7% in the quarter and are 50 basis points higher year to date.
SABMiller (SBMRY) shares sank after reports that it has rejected an informal offer from Anheuser-Busch Inbev (BUD). The news comes after SABMiller reported a fairly strong half-year update.
European markets were higher on the day after erasing early losses.
The FTSE 100, the French CAC 40 and Germany's DAX were up 0.4%, 1.0% and 0.9%, respectively.
Asian shares were mixed.
The Nikkei 225 was up 1%, while the Hang Seng was down 0.1%. The Shanghai Stock Exchange remained closed for public holidays. India's Sensex was up 0.6%.
Australian Market Report – Local Market Expected To Open Higher
Ahead of the local open, SPI futures were 6 points higher at 5,175.
Tuesday 6 October – close. The Australian market experienced a strong morning rally on the back of positive leads from offshore markets overnight. Local stocks retreated after hitting the day's highs, with the downward trend continuing in afternoon trade to close moderately higher. There were mixed results from the sectors; energy and materials gained most significantly while health care lagged behind the rest. The Australian dollar appreciated against most major currencies.
The All Ordinaries rose 14.90 points to 5,199.00 while the S&P/ASX 200 added 16.90 points to 5,167.40.
Trade Me Group (TME)
Trade Me Group announced that the number of new jobs being created in NZ is slowing after a strong run, according to an analysis of more than 60,000 vacancies listed on the Company in the 3 months to September 2015. The number of new roles listed rose 1.2% when compared to the 2014, while the average advertised salary fell 2.6%. Roles in Information technology declined 28% this quarter when compared to the 2014, following an extended period of explosive growth. Job hunters in Auckland sent 17% more job applications in the 12 months to September 2015 when compared to the 2014. Nationally, those looking for roles in Construction & architecture, Trades & services, and HR & recruitment found more choice over the quarter with the advertised roles up 12%, 15%, and 16% respectively. TME lifted 5 cents to $3.41.
Veda Group (VED)
Veda Group announced that it has received a revised proposal from Equifax Inc to acquire all of the shares of the Company at a price of $2.825 cash per share, by way of a scheme of arrangement (Revised Proposal). The Board has agreed to allow Equifax to conduct due diligence during an exclusivity period and to unanimously recommend the Revised Proposal assuming it proceeds to a binding offer. The Revised Proposal represents an implied market capitalisation of $2,501m and an implied enterprise value of $2,616m, on a fully diluted basis, for the Company and equates to a 18.1x multiple of its EBITDA for the year ended 30 June 2015 and a price earnings multiple of 32.1x. Under the Revised Proposal, and assuming its implementation, the Company would not declare an interim dividend for the half year ending 31 December 2015. VED gained 4 cents to $2.69.
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