Overseas Market Report – Retail Sector Lifts U.S. Stocks
U.S. stocks closed higher on Friday, led by the retail sector, as the S&P 500 Index logged its best weekly gain in nearly a year after a series of strong earnings results helped boost the stock-market benchmark.
Comments from a number of Federal Reserve officials, along with minutes from the U.S. central bank's October policy-setting confab, suggested the path of interest-rate increases is likely to be gradual, which helped soothe some investors' fears that the first hike in nearly a decade would shake the market.
There were no major economic data releases on Friday.
At market close the Dow was 0.5% higher, the S&P 500 was up 0.4% and the NASDAQ was up 0.6%.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 2 cents (0.07%) to $29.10, ResMed gained 88 cents (1.51%) to $59.12, Telstra Corporation added 5 cents (0.26%) to $19.49, Spark New Zealand lifted 2 cents (0.19%) to $10.61 and Westpac increased 36 cents (1.58%) to $23.08.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.26% and the 5-year yield was 1.69%.
Nike (NKE) said it has approved a new $12-billion share buyback program, that it is raising its dividend by 14% to 32 cents per share and that it would have a 2-for-1 stock split next month.
Shares of Gap (GPS) lifted after the firm reported results. Although third-quarter comparable sales were down 2% and 2015 adjusted earnings per share guidance was lowered to $2.38 to $2.42 (from $2.75 to $2.80), management reiterated its progress in its turnaround plan and some positive data points were seen.
Intuit (INTU) reported a strong start to fiscal 2016. In addition to greater-than-expected share repurchase activity, the firm exceeded its forecast subscriber and financial targets for the first quarter. As a result, management raised the midpoint of both its full year GAAP and non-GAAP earnings per share guidance by 5 cents to $2.58 and $3.48, respectively. For the quarter, revenue rose 17% year over year to $713 million (management had guided for revenue of $660-$680 million).
European markets were mixed.
The FTSE 100 was up 0.1%, Germany's DAX rose 0.3% and the French CAC 40 fell 0.1%.
Asian shares were higher.
The Nikkei 225, Shanghai Composite and Hang Seng were up 0.1%, 0.4% and 1.1%, respectively. India's Sensex was up 0.1%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 5 points lower at 5,259.
The Australian market looks set to open flat despite gains on Wall Street which lifted on Nike's dividend increase and strong earnings. At 0807 AEDT on Monday, the December share price index futures contract as down five points at 5,259. Locally, no major economic news is expected on Monday. In equities news, Lynas, Flexigroup and Yowie Group have their annual general meetings.
Friday 20 November – close. The Australian market closed slightly higher after a day of volatile trading, with gains from the big four banks helping the benchmark stay in positive territory. There were mixed results from the sectors; consumer staples were the best performers for this session while energy lagged behind the rest. The Australian dollar appreciated against most major currencies.
The All Ordinaries rose 12.20 points to 5,305.50 while the S&P/ASX 200 added 13.50 points to 5,256.10.
ABM Resources (ABU) | HOLD
ABM Resources (ABU) updated the market in regards to previously reported grade underperformance. Key causes include inaccurate Resource estimation (actual production falling short of the Mining Inventory Model), greater than anticipated dilution and ore loss, as well as gold lock-up (<10% of the shortfall). As a result of this review, Argonaut is now anticipating a reduced Resource which will likely feature a lower head grade. Given the current development, Argonaut is unconvinced on the longer term viability (e.g. future underground operations) of Old Pirate as a standalone project. Whilst Argonaut remains attracted to ABU’s highly prospective tenements, the stock is likely to face significant headwinds given uncertainties associated with the Old Pirate mine. We downgrade the stock to a HOLD (was SPEC BUY).
Kathmandu Holdings (KMD)
Kathmandu Holdings announced unaudited sales for the period 1 August 2015 to 15 November 2015 of $91.3m, 8.6% above the corresponding period in 2014. Same store sales grew by 4.8% for the 15 weeks to 15 November 2015. By market, same store sales growth was Australia +6.5%, NZ +2.1% and a same store sales decline in the UK of -0.9%. KMD gained 6 cents to $1.53.
Primary Health Care (PRY)
Primary Health Care announced that it expects underlying EBITDA and underlying NPAT for financial year 2016 to be 5% below the 2014's underlying results, with statutory NPAT expected to be broadly in line with underlying, subject to trading conditions in the remainder of the year and the outcome of the various Government reviews. This is due to margin compression caused by a subdued revenue environment. PRY dropped 27 cents to $3.33.
Sydney Airport (SYD)
Sydney Airport announced that passenger traffic continued to perform strongly during October 2015 growing 5.1% compared to the pcp. This result was driven by a 2.6% point improvement in load factors and a 1.5% growth in seat capacity. Foreign nationality demand (+6.8%) contributed to the international passenger growth, with Chinese (+23.6%), HK (+32.4%), Philippine (+43.6%), Indian (+11.9%) and Korean (+9.5%) nationalities performing well. Chinese growth was significantly higher than our four year average growth rate of 16.4% due to strong Golden Week demand which runs annually in the first week in October 2015. SYD lifted 16 cents to $6.54.
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