Morning Notes

26/11/2015 Argonaut Morning Note

Overseas Market Report - U.S. Stocks End Flat Ahead of Thanksgiving Holiday

U.S. stocks closed higher amid light trading Wednesday as investors digested this week's economic data, which may be positive enough to keep the Fed's potential December interest-rate hike on the table.

The Labour Department said the number of people who applied for U.S. unemployment benefits fell by 12,000 to 260,000 in week before Thanksgiving, keeping jobless claims near the lowest level in years.

Consumer spending rose slowly, at a seasonally adjusted pace of 0.1%, for the second month in a row, the Commerce Department said. In addition, the Commerce Department also reported that new home sales rebounded in October to a seasonally adjusted annual rate of 495,000.

At the close, the Dow and the S&P 500 were both flat while the NASDAQ was up 0.3%.

For Australian ADRs listed on the NYSE, BHP Billiton slipped $1.25 (4.34%) to $27.53, ResMed gained 42 cents (0.71%) to $59.54, Telstra Corporation lost 25 cents (1.28%) to $19.33, Spark New Zealand closed 3 cents (0.28%) lower at $10.64 and Westpac declined 14 cents (0.61%) to $22.94.

At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.23% and the 5-year yield was 1.67%.

Shares of HP Inc. (HPQ) fell after the company said it expects first-quarter and full-year earnings forecasts to be below analysts' expectations.

Deere & Co (DE) shares were up after the equipment manufacturer reported better-than-expected fourth-quarter earnings, and said it expects earnings for the full year to exceed expectations as well. However, Deere also said it expects sales of its equipment to fall 7% in fiscal 2016, compared with the year before.

European markets were higher.

The FTSE 100 was up 1.0%, the French CAC 40 gained 1.5% and Germany's DAX was up 2.2%.

Asian shares were mixed.

The Shanghai Composite rose 0.9%, and the Nikkei 225 and the Hang Seng were each down 0.4%. India's Sensex lost 0.2%.

Australian Market Report - Local Market Expected To Open Lower

Ahead of the local open, SPI futures were 9 points lower at 5,196.

Wednesday 25 November - close. The local market tumbled shortly after open, as hefty losses from the major lenders and supermarket retailers drove the benchmark index lower. It proved a volatile trading day as the Australian market traded well below the flat-line for the most part of the day, managed to recoup early losses in late afternoon, but finished sharply lower before the closing bell, to close near its intraday lows. Most sectors experienced negative results, with the exception of energy and information technology. The Australian dollar appreciated against most major currencies.

The All Ordinaries fell 31.80 points to 5,245.20 while the S&P/ASX 200 dropped 32.70 points to 5,193.70.

In This Issue

Fortescue Metals Group (FMG)
Fortescue Metals Group announced on 25 November 2015 that the Company has accepted offers to repay US$750m of principal of the 2019 8.25% and 2022 6.875% Senior Unsecured Notes (Notes) via a tender. The purchase of the Notes, which will settle on 30 November 2015, has resulted in the Company recognising a US$124m pre-tax gain and a saving of US$56m in interest annually. The total principal value of debt repurchased during FY16 is US$1,134m which has generated, in aggregate, pre-tax gains of US$192m and annualised interest savings of US$88m. As the aggregate principal of Notes tendered exceeded US$750m as of 24 November 2015, Notes tendered after this date will not be purchased pursuant to this tender offer. FMG lost 3 cents to $2.08.

Transurban Group (TCL)
Transurban Group announced an in principle agreement with the Virginia Department of Transportation to extend the 95 Express Lanes by 3km south of the existing southern end. The reversible extension will serve customers in both the north and southbound directions. The Virginia Department of Transportation will be responsible for delivering improvements and assume all delivery and cost risk. The extension will become part of the Company's operating network under the existing 95 Express Lanes concession agreement. TCL remained unchanged at $10.32.

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