Overseas Market Report – U.S. Stocks Struggle To Stay in Green
U.S. stocks closed lower on Wednesday after switching between small gains and losses in a thinly traded session light on economic news.
Trading volumes were lower than usual as bond markets and banks were closed in observance of Veterans Day.
At the close, the Dow, the S&P 500 and the NASDAQ were all down around 0.3%.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 95 cents ($3.18) to $28.93, ResMed gained 47 cents (0.81%) to $58.37, Telstra Corporation lifted 21 cents (1.15%) to $18.51, Spark New Zealand added 21 cents (1.96%) to $10.90 and Westpac increased 4 cents (0.18%) to $22.09.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.33% and the 5-year yield was 1.72%.
Shares of Macy's (M) slid after the firm said its third-quarter results were worse than expected and management provided disappointing guidance. The retailer said it earned 36 cents a share, down from 61 cents a share in the year-ago-quarter. Management also cut its forecast for the holiday quarter and said it won't spin off its real estate into a separate company.
The acquisition of SABMiller (SBMRY) by Anheuser-Busch Inbev (BUD) took a significant step forward with the announcement that AB InBev has made a formal takeover offer, with terms very similar to those previously disclosed, and expects to generate $1.4 billion in annual savings. Separately, Molson Coors (TAP) is to acquire the remaining part of the MillerCoors joint venture that it does not already own from SABMiller for $12 billion.
European markets pared gains but were still mostly higher.
The FTSE 100, Germany's DAX and the French CAC 40 were up 0.4%, 0.7% and 0.8%, respectively.
Asian markets were mixed.
The Shanghai Composite was up 0.3%, the Nikkei 225 rose 0.1%, while the Hang Seng fell 0.2%. India's Sensex was up 0.5%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 18 points lower at 5,110.
Locally, in economic news on Thursday, the Australian Bureau of Statistics releases October's labour force figures. In equities news, Graincorp is expected to post full year results. Ramsay Health, Seven West Media, Brambles, Novogen, Inabox Group, REA Group, Treasury Wine Estates, Aurizon, Mirvac, Sims Metal Management and Wesfarmers all have annual general meetings scheduled.
Wednesday 11 November – close. The Australian market closed higher after a volatile trading session. A late rally in the big banks helped the benchmark secure solid gains, offsetting heavy sell-offs from the miners. Most sectors performed positively, with only materials closing in the red. The Australian dollar appreciated against most major currencies.
The All Ordinaries rose 23.40 points to 5,181.10 while the S&P/ASX 200 added 23.40 points to 5,122.60.
Fortescue Metals Group (FMG)
Fortescue Metals Group announced that it is launching a US$750m debt repayment offer for the 2019 8.25% and 2022 6.875% Senior Unsecured Notes via a tender. The Company has offered to purchase up to US$750m in aggregate principal via a modified Dutch auction. Note holders can tender their 2019 Senior Unsecured Notes within a range of US$0.88 and US$0.93 per US$1.00 of principal and their 2022 Senior Unsecured Notes within a range of US$0.75 and US$0.80 per US$1.00 of principal. The tender offer is scheduled to expire on 9 December 2015 unless extended or earlier terminated. Tendered Notes may be withdrawn any time on or prior 24 November 2015, but not thereafter. FMG lifted 7 cents to $2.37.
TPG Telecom (TPM)
TPG Telecom announced the launch of a fully underwritten institutional placement to raise $300m. It successfully completed the acquisition of iiNet in September 2015 for which a number of debt facilities were established to fund the cash consideration paid to iiNet's shareholders and refinance iiNet's existing debt arrangements. The Company's bank debt rose to $1.85bn following completion of the iiNet Acquisition. The net proceeds of the Placement will be used to partly repay the Acquisition Debt in order to support ongoing growth capex initiatives and to minimise the Company's overall cost of funding. The Placement is not expected to have a material impact on its FY16 EPS. In addition to the Placement, a non-underwritten share purchase plan will be offered to eligible shareholders in Australia and NZ. TPM remained unchanged at $10.82.
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