Overseas Market Report – Stocks Close Lower after Worst Opening Week Ever
U.S. stocks relinquished an early advance Friday and finished deep in the red, posting their worst opening week in history.
A strong U.S. jobs report and stability in Chinese markets helped propel U.S. shares higher in early trade, but the indexes turned lower as oil prices tumbled to new lows, suffering a steep decline in the last thirty minutes of trading.The Labor Department reported that U.S. employers added 292,000 jobs in December, signalling a resilient U.S. economy in the face of troubling economic news globally. The October and November reports were also revised up a combined 50,000. The unemployment rate remained at 5% for a third straight month.
At the close, the Dow and NASDAQ were each down 1%, while the S&P 500 had fallen 1.1%.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 50 cents (2.23%) to $21.96, ResMed gained 26 cents (0.50%) to $52.12, Telstra Corporation lost 26 cents (1.41%) to $18.23, Spark New Zealand slipped 24 cents (2.25%) to $10.44 and Westpac declined 44 cents (2.03%) to $21.21.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.12% and the 5-year yield was 1.56%.
Shares of Gap (GPS) ended lower as the company reported disappointing December comparable sales, while brands Banana Republic and Old Navy showed signs of weakness.
American Eagle (AEO) shares tumbled after the retailer announced that same-store sales came in below expectations.
Dollar Tree (DLTR) shares were down following an announcement that Family Dollar chief executive Howard Levine is stepping down after completing his role in the integration of the two discount retailers.
European shares turned negative after early gains.
The FTSE 100 fell 0.7%, while the French CAC 40 and Germany's DAX dropped 1.6% and 1.3%, respectively.
Asian markets were mixed after a nerve-wracking week of steep losses.
The Shanghai Composite rose 2%, the Nikkei 225 fell 0.4% and the Hang Seng was up 0.6%. India's Sensex added 0.3%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 80 points lower at 4,850.
Friday 8 January – close. The Australian market dipped below the key 5,000 level at open, following negative leads from global sharemarkets overnight. The local market managed to pare some of its early losses with a small rally at midday bringing the index back to positive territory briefly, but failed to maintain the momentum in afternoon trade, finishing lower for a sixth session in a row. There were mixed results from the sectors; energy gained most significantly while financials were the worst performer. The Australian dollar gained against most major currencies.
The All Ordinaries fell 19.40 points to 5,049.40 while the S&P/ASX 200 lost 19.50 points to 4,990.80.
In This Issue
CIMIC Group (CIM)
CIMIC Group announced that its construction company, CPB Contractors, has been selected by NZ's Ministry of Health to construct the Christchurch Hospital Acute Services Building (ASB) project in NZ. The 62,000sqm ASB project will generate revenue of NZ$300m to CPB Contractors over two and a half years. The ASB will adjoin Christchurch Women's Hospital. The facility includes a new emergency department and operating theatres, an expanded intensive care unit, children's facilities, a state-of-the-art radiology department and a rooftop helipad. Construction of the ASB is planned for completion by mid-2018. The project is part of the NZ Ministry of Health's NZ$650m plus redevelopment of Christchurch and Burwood Hospitals. CIM added 30 cents to $22.95.
Alumina (AWC)
Alumina noted and attached Alcoa Inc.'s statement regarding the decision to curtail one million tonnes of Alcoa World Alumina & Chemicals (AWAC) alumina refining capacity by the end of the second quarter 2016. The curtailment includes the remaining 810,000t of production at the Point Comfort refinery in Texas, USA. In November 2015, Alcoa Inc. had announced the curtailment of 1.2mt of production at the refinery. AWAC is expected to record a post-tax US GAAP charge in the fourth quarter of 2015 of US$53m of which 45% will be cash related. In addition, AWAC is expected to record post-tax charges of US$12m in the first half of 2016, all of which will be cash related. AWC dropped 2 cents to $1.01.
Recent Contacts & Presentations
Empire Oil & Gas (EGO), Millennium Minerals (MOY), Geopacific Resources (GPR), Saracen (SAR), Agrimin (AMN), Salt Lake Potash (SO4), Reward Minerals (RWD), Transerv Energy (TSV), Carnarvon Petroleum (CVN), Success Resources (SGU), High Peak Royalties (HPR), Heron Resources (HRR), OBJ (OBJ), Goldfields Money (GMY), Hazer (HZR), MZI Resources (MZI)
Please read Argonaut's Important Disclaimers & disclosures
Log in to the client area below to download the full Morning Note PDF
