Market Update & Important Indicators
U.S. stock prices rose on Wednesday after upbeat economic reports and signs that Greece and its creditors have a willingness to negotiate. Private payrolls in the U.S. increased by 237,000 jobs in June, according to a national employment report, and U.S. manufacturers are increasing activity, according to a survey released on Wednesday by the Institute for Supply Management. The ISM's manufacturing purchasing managers index rose to 53.5 in June from 52.8 in May, beating expectations of an increase to 53.2. The Dow Jones index finished Wednesday up 138 points, or 0.8%, at 17,758, while the S&P 500 closed 0.7% higher at 2,077.
European stocks surged Wednesday on renewed optimism about a possible deal between Greece and its creditors. Stocks rose sharply after Greek Prime Minister Tsipras sent a new proposal for budget cuts and policy overhauls to Greece's creditors, but cooled after Mr. Tsipras said later he would push ahead with a referendum on terms previously offered by the country's lenders in return for fresh financial aid. The pan-European Stoxx 600 index closed 1.5% higher, having earlier risen more than 2%, after two sessions of heavy losses. Germany's DAX climbed 2.2% and France's CAC 40 added 1.9%.
China's main market fell sharply after a stretch of calm earlier Wednesday, reviving the choppy trade that dominated the past two weeks and erased some gains from a yearlong bull market. The Shanghai Composite Index closed down 5.2% after trading largely flat earlier. While the index is off nearly 22% from its mid-June high, pushing it back into bear territory, values have still doubled over the past year.
Base metals were higher across the board on the LME overnight, with copper up 0.2% and nickel up 0.4%. Gold slipped 0.4% to $1,168/oz, while Brent crude dipped 2.5% to $62.01/bbl.
In This Issue
Global Construction Services (GCS) | BUY
A near term pipeline of work should boost FY16 financial performance despite the faltering local economy, while the tie-up with Brookfield should assist GCS in its strategic diversification onto the east coast. We believe this will help take up some of the slack that we expect in the Perth city construction market in the medium term. We maintain a buy recommendation on an unchanged $0.65 valuation.
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