Overseas Market Report – U.S. Stocks End Lower after Choppy Session
U.S. stocks finished lower after a choppy trading session on Thursday as oil prices erased early gains.
Oil futures initially rose on hopes of a production freeze, but mostly gave those gains up after new inventory data.
Initial U.S. unemployment claims fell by a larger-than-expected 7,000 to 262,000 last week. The less volatile four-week moving average was off 8,000 to 273,250.
At the closing bell the Dow, S&P 500 and NASDAQ were down 0.2%, 0.5% and 1.0%, respectively.
Shares of Wal-Mart (WMT) were down 3% at the close after the firm reported fourth-quarter results. Investors were concerned by weak sales growth from Sam's Club, international markets, and e-commerce and in part because of fiscal 2017 sales guidance that was below expectations. Still, U.S. same-store traffic increased 0.7%, representing the fifth consecutive quarter of traffic increases. Similarly, U.S. same-store sales increased 0.6%, representing the sixth consecutive quarter of positive comps and bringing the two-year stacked-comp growth rate to 2.1%.
Discovery Communications (DISCA) shares slipped 4% after the company reported worse-than-expected results. The firm was hit hard by currency headwinds and continued pressure on media firms from customers choosing to cut the cable cord.
IBM (IBM) said it is spending $2.6 billion to buy Truven Health Analytics, which it will fold into its Watson Health unit. The news sent shares up over 5% by the close.
For Australian ADRs listed on the NYSE, BHP Billiton dropped 13 cents (-0.54%) to $23.99, ResMed slipped 5 cents (-0.08%) to $59.20, Telstra Corporation lost 14 cents (-0.69%) to $19.33, Spark New Zealand gained 1 cent (0.09%) to $10.80 and Westpac rose 5 cents (0.24%) to $21.28.
At 8:15 AM (AEDT), the 10-year Treasury note yield was 1.74% and the 5-year yield was 1.20%.
European markets finished mixed on Thursday.
The FTSE 100 was down 1%, the French CAC 40 was up 0.2%, while Germany's DAX was 0.9% higher.
Asian shares finished mostly higher.
The Nikkei 225 and Hang Seng each gained 2.3% on the day, while the Shanghai Composite was down 0.2%. India's Sensex was up 1.1%.
Australian Market Report- Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 24 points lower at 4,932.00.
Thursday 18 February – close. The local market opened higher today on the back of gains on Wall Street overnight as global oil prices rose significantly. The positivity continued as stocks remained above the flat-line until close, buoyed by gains in energy stocks and the banks. Most sectors ended higher with the exception of health care which recorded a loss. The Australian dollar fell against most major currencies.
The All Ordinaries rose 108.70 points to 5,047.10 while the S&P/ASX 200 gained 109.90 points to 4,992.00.
In This Issue
Argonaut Research |Austin Engineering (ANG) | Hold
It has been our view that ANG needs to make decisions based on the assumption that current conditions extend further. A strategic review is therefore welcome in that it acknowledges a very weak environment. Implementing change however will be a challenge for the new leadership team, who face a geographically diverse business, an uncomfortably stretched balance sheet and earnings that are yet to bottom. Our forecasts were already well below prior guidance and highlight weak balance sheet ratios. We remain cautious until we see evidence of an operational turnaround and/or the implementation of measures to strengthen the balance sheet.
Argonaut Research| Threat Protect (TPS)| Spec Buy
TPS has announced two well-priced acquisitions for a combined $0.75m, providing a significant boost to revenue and a footprint on the east coast. A $3.0m placement covers cash acquisition costs, provides additional working capital, and leaves TPS with a $1.5m war-chest to fund potential future acquisitions. The impact of these transactions boosts our blended valuation to $0.038 (prior $0.033), with the potential uplift from further organic and acquisitive growth providing upside. Speculative buy maintained.
Automotive Holdings Group (AHG)
Automotive Holdings Group announced that the Company has agreed to enter into a revised transaction with GPC Asia Pacific where the Company will sell 21 of the 25 Covs stores to GPC Asia Pacific (GPC). The Company and GPC announced in July they had reached agreement on the sale of all 25 stores in the Covs network. Four Covs regional stores (Albany, Esperance, Karratha and Port Hedland) will be excluded from the revised transaction and the Company will retain those stores and operate them through AMCAP. The Company will rebrand the four retained Covs stores (Skipper Transport Parts) to avoid confusion with the Covs stores to be operated by GPC Asia Pacific. The transaction is expected to complete in early March. AHG added 7 cents to $4.52.
Sydney Airport (SYD)
Sydney Airport announced that total passenger growth of 7.5%, with international and domestic markets growing 9.5% and 6.2% respectively. Asian market growth led the international result, with China the standout market growing 38.9%. Early Lunar New Year has underpinned its demand this month, in addition to capacity increases from new and existing carriers. Broad foreign nationality demand growth continues (+9.5%), with USA (+15.1%), Korean (+13.9%), Japanese (+11.9%) and Indian (+11.8%) nationalities also performing well. Australian outbound also grew strongly, increasing 8.3% due to peak school holiday demand and further seat capacity increases. Domestic passenger growth again grew strongly in January 2016 delivering an increase of 6.2%, to reach over 2.2m passengers for the month. SYD added 17 cents to $6.59.
Recent Contacts & Presentations
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