Quite a few analyst ratings changes this morning:
- Ansell (ANN): Cut to neutral at JPMorgan
- Beach Energy (BPT): Cut to hold vs buy at APP Securities
- Brambles (BXB) Cut to neutral at Goldman, PT $10.66
- BT Investment Mgmt (BTT): Raised to neutral at Credit Suisse
- Carsales (CAR): Cut to hold vs add at Morgans Financial
- Charter Hall Retail (CQR): Cut to neutral at Goldman, PT $4.45
- GPT Group (GPT): Cut to sell at Goldman, PT $4.85
- Iluka Resources (ILU): Cut to underweight at JPMorgan
- Navitas (NVT): Raised to buy vs neutral at UBS
- Scentre Group (SCG): Cut to sell at Goldman, PT $4.49
- Sydney Airport (SYD): Raised to add vs hold at Morgans Financial
- Wisetech Global (WTC): Raised to buy at Bell Potter
- Woolworths (WOW): Raised to buy vs sell at UBS
Digital real estate advertising company REA Group has sold its European businesses to private equity investor Oakley Capital.
REA Group, which owns the realestate.com.au website, has announced the completion of its sale of businesses atHome Group and REA Italia, which operate in Luxemburg, France, Germany and Italy.
It said the sale, announced to the market in December, was effective from December 31, 2016, with the final profit yielding $161.6 million including completion adjustments.
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What's the market price for Trump, IG's Gary Burton wonders:
It may be a game of brinkmanship being played in US politics, and questions are being raised by the trading community about fallout of immigration policy into the markets. But business is accessing the damage of reduced numbers of overseas students though the US education system. US listed companies are working through the potential disruption to supply chains if tariffs become a serious cost factor in 2017, keeping in mind these are the tariffs that the American public will ultimately pay for.
Gathering momentum in Mexico to have the whole NAFTA agreement torn up, markets dislike uncertainty so the result is a lack of commitment for higher prices. With three trading sessions moving the markets lower. The DOW30 and the S&P now trading back into the lower part of the December January range 1980 for the Dow and 2270 for the S&P so no real technical damage has been done to the market averages at this stage.
If inflation is good, then overnight CPI read, +0.2% from Germany at 1.9% expectation was 2% this has left the Euro bourses mixed, Germany down 1.2% and the FSTE250 65 points higher, while the UK parliament goes into 2 days of debate to give Prime Minister Theresa May the authority to trigger article 50 to exit the UK out of the Euro zone pact. The European Union's chief Brexit negotiator Guy Verhofstadt has also suggested Trump is part of a three-pronged attack on the European Union. The EURUSD pushed over 1.08 as Trump again infers counties are taking advantage of the US by lower the exchange rates.
With the Australian SPI futures contract is up 9 points, as the market comes into the morning close, this really does suggest the bears have not wrested control from the bulls. Traders often refer to this as the shakeout, as the retest of recent lows can be the catalyst for pushing to new highs.
Apple has reported a bigger-than-expected rise in iPhone sales for the holiday quarter, driven by strong demand for the latest version of its flagship smartphone.
Shares of the world's most valuable listed company were up 2.6 per cent at $US124.50 in after-hours trading.
Apple sold 78.29 million iPhones in the first quarter ended December 31, up from 74.78 million last year, marking the first quarterly growth in iPhone sales in a year.
Analysts on average had estimated iPhone sales of 77.42 million, according to research firm FactSet StreetAccount.
The results, which reflected the first full quarter of iPhone 7 sales, come at a time when global demand for smartphones is slowing and cheaper Android alternatives are flooding the market.
Revenue in the Greater China region fell 11.6 per cent to $US16.23 billion, highlighting Apple's struggles in a hotly contested smartphone market.
The company also forecast revenue of between $US51.5 billion and $US53.5 billion for the current quarter. Analysts, on average, had expected revenue of US$53.79 billion.
"We were surprised by the strength of iPhone 7 Plus where we were actually short of supply throughout the quarter. We've been able to come into supply-demand balance in January," chief financial officer Luca Maestri.
He also said that a stronger US dollar hurt the company's revenue forecast.
The company is heavily dependent on the success of iPhones, which account for 69.4 per cent of its total revenue.
Analysts and investors have already set their sights on Apple's 10th-anniversary iPhone, which is expected to feature better touchscreen technology, wireless charging and a shift to OLED display.
Apple's services business - which includes the App Store, Apple Pay and iCloud - recorded a 18.4 per cent growth in revenue to $US7.17 billion, helped by the popularity of games, including Pokemon Go and Super Mario Run, and increased revenue from subscriptions.
The company's net income fell to $US17.89 billion, or $US3.36 per share, in the quarter from $US18.36 billion, or $US3.28 per share a year earlier. Analysts on average had expected $US3.12 per share. Revenue rose 3.3 per cent to $US78.35 billion in the quarter.
Up to Tuesday's close, Apple's shares have gained 14.7 per cent since mid-November, compared with the 5.3 per cent rise in the Dow Jones Industrial Average.
Here's the overnight scoreboard:
- SPI futures up 20 points or 0.4% to 5575
- AUD +0.4% to 75.79 US cents (overnight peak 76.06)
- On Wall St, Dow -0.5%, S&P 500 -0.1%, Nasdaq flat
- In New York, BHP +1.7%; Rio +0.9%
- In Europe, Stoxx 50 -1%, FTSE -0.3%, CAC -0.8%, DAX -1.3%
- Spot gold +1.3% to $US1211.59 an ounce
- Brent crude +1.1% to $US55.81 a barrel
- Iron ore at $US83.34 a tonne (no trade due to Chinese holidays)
- Thermal coal -0.7% to $US83; coking coal +0.2% to $US185.53
- LME aluminium +0.9% to $US1819
- LME copper +2.9% to $US5989 a tonne
- 10-year bond yield: US 2.46%; Germany 0.43%; Australia 2.71%
Wall Street's S&P 500 fell for a fourth consecutive session, weighed by sectors sensitive to economic growth amid disappointing earnings and lingering concern over the priorities of the Trump administration.
Technology and financials were the sectors that weighed the most on the S&P 500, while healthcare helped cut losses and the index closed far from its session low.
US President Donald Trump met with top executives from some of the biggest drugmakers in a move seen as lowering tensions that have kept drug stocks in check since the presidential election.
The NYSE Arca Pharmaceutical index gained 1.3 per cent. The index was unchanged from the November 8 election to Monday's close, having risen more than 6 percent at one point.
But some worried that Trump's focus was not on the issues that triggered a market rally after his election, like tax reform and a fiscal stimulus.
"If you start burning political capital by doing things that are unpopular and you lose some of that majority you have, it calls into question your ability to get the tax plan done," said Art Hogan, chief market strategist at Wunderlich Securities.
Hogan said the market trend continues to be higher.
The Dow Jones Industrial Average fell 107.04 points, or 0.54 per cent, to 19,864.09, the S&P 500 lost 2.03 points, or 0.09 per cent, to 2,278.87 and the Nasdaq Composite added 1.07 points, or 0.02 per cent, to 5,614.79.
The S&P 500 posted its fourth consecutive daily decline, the longest streak since before the election. But the three indexes ended the month higher, with the 4.3 per cent gain in the Nasdaq its largest since July.
The US dollar tumbled overnight, posting its worst January in three decades, as US President Donald Trump added more uncertainty to the market following stringent curbs on travel to the United States from seven Muslim-majority countries.
Comments from Trump's top trade adviser, Peter Navarro, that Germany was using a "grossly undervalued" euro to gain advantage over the United States knocked the dollar in early North American trading.
"Germany ... continues to exploit other countries in the EU as well as the US with an 'implicit Deutsche Mark' that is grossly undervalued," Navarro told the FT.
Trump followed up on those comments in a meeting with the chief executives of several top drugmakers, during which he said drug companies had outsourced production because of currency devaluation by other countries.
"We sit there like a bunch of dummies," while other countries devalue their currencies, Trump said in Washington.
German Chancellor Merkel tried to counteract that by saying that Germany does not interfere with the ECB and cannot influence the euro.
The war of words dragged the dollar index, which tracks the greenback against six rival currencies, to its lowest since December 8. The index is down about 2.6 per cent for the month, its worst January since 1987.
"You don't talk about levels, don't really talk about valuation and you certainly don't talk about other people's currencies," said Greg Anderson, Global head of FX strategy for BMO Capital Markets. "This hasn't been done before. It's maybe a little unsettling for the market."
Investors' hopes for a fiscal boost to the world's largest economy under Trump have been tempered by controversial and protectionist policies that have seen him suspend travel to the United States from seven Muslim-majority countries.
Trump's rattling of the currency markets came as investors assessed the implications of his firing late Monday of the acting attorney general in retaliation for her refusal to defend his executive order on immigration.
"The US administration sees the exchange rate as one of the main anchoring points for the deployment of its trade policies," Vasileios Gkionakis, global head of foreign-exchange strategy at UniCredit, said in a note.
The latest comments add a "layer of confusion and inconsistency in this twisted web of incoherent policies: a shift towards a 'weak dollar policy' is at odds with the imposition of tariffs, which tend to lead to exchange-rate appreciation."
Good morning and welcome to the Markets Live blog for Wednesday.
Your editor today is Jens Meyer - as usual, please send any tips, suggestions, feedback, criticism, praise etc to jmeyer@fairfaxmedia.com.au
This blog is not intended as investment advice.
Fairfax Media with wires.
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