Overseas Market Report – U.S. Stocks Shrug Off Paris Attacks to End Higher
U.S. stocks closed higher on Monday as investors shook off pessimism following the Paris terror attacks while assets perceived as havens got a boost with gold and the U.S. dollar climbing.
The main indexes opened lower but soon moved into positive territory, with reaction to the attacks concentrated to individual sectors.
The Empire State Index, which measures the strength of business activity in New York, rose slightly to -10.7 this month from -11.4 in October. Any reading below zero indicates a contraction. Economists had been expecting the index to come in at -6.5.At the close, the Dow was up 1.4%, the S&P 500 was up 1.5%, while the NASDAQ was 1.2% higher.
For Australian ADRs listed on the NYSE, BHP Billiton added 26 cents (0.90%) to $28.67, ResMed gained 11 cents (0.19%) to $57.43, Telstra Corporation lifted 22 cents (1.18%) to $18.40, Spark New Zealand rose 7 cents (0.67%) to $10.52 and Westpac increased 35 cents (1.62%) to $21.93.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.27% and the 5-year yield was 1.65%.
Marriott (MAR) announced it is purchasing Starwood Hotels (HOT) for $12.2 billion in cash and stock. The merger will create the largest hotel company in the world with over 5,500 properties and 1.1 million rooms. Starwood has been seeking strategic alternatives since earlier this year.
European stocks finished mixed.
The FTSE 100 was up 0.5%, the French CAC 40 was 0.1% lower and the German DAX was flat.
Asian markets were also mixed.
The Shanghai Composite ended 0.7% higher, while the Nikkei 225 was off 1% and the Hang Seng fell 1.7%. India's Sensex was 0.6% higher.
Australian Market Report – Local Market Expected To Open Higher
Ahead of the local open, SPI futures were 60 points higher at 5,054.
Monday 16 November – close. The Australian share market dipped below 5,000 at open, as local investors were concerned about the potential economic impact of the Paris attacks. Local stocks pared some of early losses after hitting the intraday lows, but still closed far below the red line. The big banks and retailers weighed heavily on the market, whilst gold miners benefited from a rise in the gold price. All the sectors experienced negative results, with the exception of energy and telecommunication services. The Australian dollar appreciated against most major currencies with the exception of the Euro.
The All Ordinaries lost 47.30 points to 5,064.50 while the S&P/ASX 200 dropped 47.50 points to 5,003.80.
In This Issue
Fonterra Shareholders' Fund (FSF)
Fonterra Shareholders' Fund announced that Fonterra Co-operative Group is increasing its forecast EPS range for the current financial year to 45-55c. With a forecast Farmgate Milk Price of $4.60 this lifts the total available for payout to $5.05-5.15 per kgMS and would currently equate to a total forecast cash payout of $4.95-5.00 per kgMS after retentions. The Company is also increasing the rate at which farmers are paid the Co-operative Support of 50c per kgMS, with the total amount paid up to December 2015 going from 18c to 25c. FSF added 9 cents to $5.04.
Tatts Group (TTS)
Tatts Group announced that in response to media commentary regarding a potential corporate transaction between the Company and Tabcorp Holdings, the Company confirms that confidential discussions have taken place between the parties regarding a potential nil-premium merger of equals. The Company confirms the parties have been unable to reach agreement on key transaction terms, in particular as it relates to a nil-premium exchange ratio. As a result, these discussions have concluded and there are no further discussions taking place between the parties relating to a nil-premium merger of equals or any other form of corporate transaction with Tabcorp. TTS lifted 13 cents to $4.05.
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
