Overseas Market Report – U.S. Stocks End Flat after Data, Retail Earnings
U.S. stocks erased early gains Tuesday, with the S&P 500 turning lower as falling oil prices took a toll on energy companies and the evacuation of a European soccer stadium rekindled terror fears.
Stocks were lifted in earlier activity by upbeat earnings reports from giant retailers Home Depot and Wal-Mart Stores but the results overshadowed U.S. economic data that delivered a muddled picture of the health of the U.S. economy, but isn't seen as likely to deter the Federal Reserve from lifting interest rates for the first time in nearly a decade.
The consumer price index rose 0.2% in October after two months of declines. Excluding volatile food and energy prices, the index was also up 0.2%. Both readings were in line with expectations. Year-over-year- prices were up only 0.2% as low energy prices held down the index. Core prices are now up 1.9% from 2014 levels.
Industrial production slipped 0.2% last month from September levels. Manufacturing and auto output rose in the month but production was dragged down by a fall in the mining and utility sectors, driven by low energy prices. Capacity utilisation fell to 77.5% from 77.7%.
At the close, the Dow and NASDAQ were both little changed, while the S&P 500 was 0.2% lower.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 61 cents (2.13%) to $28.05, ResMed gained 45 cents (0.79%) to $57.58, Telstra Corporation lifted 29 cents (1.58%) to $18.68, Spark New Zealand slipped 33 cents (3.14%) to $10.19 and Westpac fell 4 cents (0.48%) flat at $21.89.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.25% and the 5-year yield was 1.65%.
Shares of Wal-Mart (WMT) rose after the firm reported quarterly results and provided a more optimistic profit forecast. Wal-Mart's U.S. same-store sales once again increased (by 1.5%), with traffic up 1.7% during the third quarter. This increase represents the fourth consecutive quarter of positive traffic at Wal-Mart U.S.; if Wal-Mart generates 1% same-store sales growth in the United States during the fourth quarter, two-year stack comps will improve 50 basis points from the third quarter, indicating a positive trend in growth.
TJX (TJX), operator of Marshalls, T.J. Maxx and HomeGoods reported another upbeat quarter. The firm said its same-store sales grew 5% in the quarter, above the 2% to 3% growth management had bene excepting. Overall, the firm's earnings grew 1.3% year over year.
Home Depot (HD) is seeing the benefit of an improving housing market. The firm saw same-store sales rise 5.1% as it saw growth across regions and different product categories. Management also said its full-year earnings would come in near the high-end of its previous guidance.
European markets rallied.
The FTSE 100, Germany's DAX and the French CAC 40 were up 2.0%, 2.4% and 2.8%, respectively.
Asian markets were mostly higher on the day.
The Shanghai Composite was off a modest 0.1% while the Nikkei 225 and Hang Seng each rose 1.2%. India's Sensex was up 0.4%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 24 points lower at 5,100.
Tuesday 17 November – close. The Australian market opened higher on the back of a positive lead on Wall Street overnight. Local stocks continued that momentum throughout the day, with the big banks and energy suppliers leading the charge. All sectors posted solid gains, with health care being the best performer. The Australian dollar depreciated against the greenback but had mixed results against other major currencies.
The All Ordinaries rose 109.80 points to 5,174.30 while the S&P/ASX 200 added jumped 114.40 points to 5,118.20.
Goodman Group (GMG)
Goodman Group announced an operational update for the first quarter ended 30 September 2015, with sustained momentum across the Group's global development and management activities driving strong operating performance into the first half of FY2016. The Group is executing on its strategy to deliver sustainable growth through the focus on quality assets, partnerships and capital management, underpinned by disciplined risk management. Total assets under management increased by $2bn to $32.3bn, reflecting development completions, currency movements, and strong revaluations resulting from cap rate compression and upward revaluation of urban renewal sites. GMG lifted 24 cents to $5.99.
SMS Management and Technology Limited (SMX)
SMS Management and Technology provided the 2015 AGM Chairman and CEO Addresses. The Chairman reported that 2015 was an eventful and successful year for the Company. Eventful in that it farewelled Tom Stianos, its CEO of 13 years and welcomed a new CEO Jackie Korhonen, and successful in that it produced significantly better results than in 2014. 2015 revenue of $356m was a record result and was up 13% on the prior year reflecting strong demand from the Financial Services, Government and Telecommunications, Media and Technology industry sectors. EBITDA were $28.7M, up 37% on 2014. NPAT is $17m increased by 34% over 2014. Its revenue and earnings growth resulted from improved billable utilisation, stabilisation of project margins, development of its managed services business and a continued focus on cost management. SMX slid $1.05 to $3.41.
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