Overseas Market Report – U.S. Stocks End Higher as Oil Prices Rise
U.S. stocks ended sharply higher Friday, scoring their first weekly gain of the new year as oil futures surged and investors were encouraged by hints of potential central-bank stimulus in Europe and Japan.
Oil futures rose over US$30 a barrel to settle at their highest level in two weeks.
Existing U.S. home sales rose 14.7% in December to a seasonally adjusted annual rate of 5.46 million, well above the 5.3 million rate expected by economists. The median sale price rose 7.6% year over year to US$224,100.
At market close, the Dow, S&P 500 and NASDAQ were up 1.3%, 2% and 2.7%, respectively.
For Australian ADRs listed on the NYSE, BHP Billiton rose 48 cents (2.29%) to $21.48, ResMed gained $3.53 (6.53%) to $57.57, Telstra Corporation lifted 8 cents (0.41%) to $19.50, Spark New Zealand rose 17 cents (1.61%) to $10.72 and Westpac gained 28 cents (1.33%) to $21.30.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.05% and the 5-year yield was 1.48%.
General Electric (GE) said its fourth-quarter earnings grew to 64 cents per share from 51 cents a share in the year-ago quarter. However, the firm's core industrial business fell due to weak power, oil and gas demand. Shares were down 2.5% on the report.
American Express (AXP) took US$419 million in impairment charges in the fourth quarter of 2015 and announced further cost-cutting plans. Management confirmed Morningstar's thesis that changes in "co-brand economics, pressures on merchant fees, the evolving regulatory environment, and intense competition" are all taking a toll on the company's business. Shares tumbled over 12% on the report.
Starbucks (SBUX) shares fell over 1% after the firm's first-quarter fiscal 2016 update. The market appears to be reacting negatively to a combination of softer-than-expected second-quarter EPS guidance and the lack of an increase in the company's full-year outlook, following a better-than-expected first quarter–Morningstar believes both of these are largely attributable to unfavourable foreign currency movements–as well as a modest downtick in China/Asia-Pacific comparable sales growth (5%, versus 6% last quarter).
European shares rallied Friday.
Germany's DAX, the FTSE 100 and French CAC 40 were up 2%, 2.2% and 3.1%, respectively.
In Asia, Japanese shares soared, with the Nikkei 225 rising 5.9% on the day.
The Shanghai Composite was up 1.3%, while the Hang Seng gained 2.9%. India's Sensex rose 2%.
Australian Market Report – Local Market Expected To Open Higher
Ahead of the local open, SPI futures were 55 points higher at 4,934.
Friday 22 January – close. The Australian market opened higher today on the back of gains on Wall Street overnight and with the potential expansion of central bank stimulus firmly on the agenda. Major gains from energy and materials stocks ensured the upward move continued throughout the day. All sectors produced positive results. The Australian dollar depreciated against some major currencies.
The All Ordinaries rose 52.00 points to 4,969.60 while the S&P/ASX 200 lifted 52.00 points to 4,916.00.
In This Issue
Santos announced that Standard and Poor's ratings Services (S&P) has revised the Company's long-term senior unsecured credit rating from BBB to BBB-. The Company's credit rating remains investment grade and there is no material change in the Company's financial position as a result of the announcement from S&P. None of the company's existing drawn or undrawn debt facilities contain any credit rating-related covenant triggers or review events. STO rose 28 cents to $2.84.
SkyCity Entertainment Group announced that it plans for a major expansion of its Adelaide Casino which has been approved by SA's Development Assessment Commission (DAC). SA's development approval authority on 22 January 2016 gave the green light to the proposed design, which includes an 80 room luxury hotel, premium gaming spaces and additional signature restaurants. The Company is planning to spend up to $A300m to transform the Adelaide Casino into a world-class integrated entertainment destination on the Riverbank Precinct, adjacent to the Torrens River. The Company hopes to start construction by mid-2016.kyCity (SKC). SKC remained unchanged at $4.21.
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