Overseas Market Report – U.S. Stocks Lower as Investors Await Earnings
U.S. stocks ended modestly lower on Tuesday, after switching between small gains and losses throughout the early part of the trading session.
The seesawing action in stocks comes as skittish investors await a batch of corporate earnings and economic reports to gauge the health of the U.S. economy amid a global economic slowdown.At the close, the Dow, S&P 500 and NASDAQ were down 0.3%, 0.7% and 0.9%, respectively.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 90 cents (2.43%) to $36.16, ResMed fell 1 cent (0.02%) to $54.52, Telstra Corporation lost 44 cents (2.15%) to $20.01, Spark New Zealand slipped 13 cents (1.27%) to $10.07 and Westpac declined 44 cents (1.96%) to $21.97.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.04% and the 5-year yield was 1.35%.
Shares of Anheuser-Busch Inbev SA (BUD) and SABMiller PLC (SBMRY) gained, after AB InBev confirmed it will acquire SABMiller for the equivalent of just under £42 per share. Until the agreement has been ratified by shareholders, Morningstar is maintaining its fair value estimates and wide economic moat ratings for both firms. Under the terms of the tentative proposal, SABMiller shareholders will receive £44 in cash, a 50% premium to the unaffected stock price on Sept. 14, 2015. Under a partial-share alternative arrangement, shareholders could receive 0.48 unlisted shares and £3.78 in cash, which is equivalent to £39.03, a 33% premium. The restricted shares will be convertible to AB InBev shares at the expiry of a five-year lockup period.
Twitter Inc. (TWTR) shares rose after the company announced plans to lay off 8% of its employee base, representing up to 336 employees, according to an 8K filing Tuesday. The restructuring is seen as management willing to exercise discipline with respect to its spending levels.
European markets were lower.
The FTSE 100 slipped 0.5%, while the French CAC 40 lost 1.0% and Germany's DAX was down 0.9%.
Asian shares were mixed.
The Shanghai Composite gained 0.2%, the Nikkei 225 lost 1.1% and the Hang Seng was down 0.6%. India's Sensex fell 0.2%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 30 points lower at 5,161.
Tuesday 13 October – close. The Australian market opened lower this morning as falling oil prices sparked heavy selloffs in the energy sector. Hefty losses from the big miners kept the market in negative territory, with Fortescue suffering the most. There were mixed results from the sectors; consumer staples gained most significantly while energy and materials lagged behind the rest. The Australian dollar depreciated against most major currencies.
The All Ordinaries fell 32.80 points to 5,234.60 while the S&P/ASX 200 dropped 30.00 points to 5,202.90.
APA Group (APA)
APA Group provided presentation related to connecting markets and creating Opportunities. The presentation highlights that the Co. continues to connect resources to markets by working with its customers, due to which earnings of the Co. continued to grow. There was an increase in contribution from GDI, EII2 and SEA Gas Pipeline. The Co. completed Wallumbilla Gladstone Pipeline acquisition of US$4.6bn. The Co. also mentioned about the Corporate costs which remained flat over last 5 years enabling growth of the business. Company established a new $830m syndicated bank facility, replacing the existing $1.1bn syndicated facility. The Co. expects EBITDA for FY2016 within a range of $1,275m to $1,310m and Net interest costs for FY2016 expected within a range of $500m to $510m. APA remained unchanged at $8.92.
Cardno released its Target's Statement in response to Crescent Capital's unsolicited Proportional Takeover Offer to acquire one out of every two Company Shares for $3.15 each. The directors of the Company recommend that shareholders reject the offer in the absence of a superior proposal. CDD lost 2 cents (-0.68%) to $2.93.
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)
Please read Argonaut's Important Disclaimers & disclosures
Log in to the client area below to download the full Morning Note PDF