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Rising bond yields put further heat on high-yield stocks, keeping the ASX in the red.
- Macquarie to cut 500 jobs
- Sell Blackmores: CLSA
- BBHO withdraws Kidman bid
- Equities ‘resilient’ to sell-off: ANZ
- Stocks in for a boost
- Aussie equities undervalued: UBS
- Woolies closes gap on Coles
- Macquarie H1 earnings dip
- $360m to hit ANZ FY result
Welcome to the BusinessNow blog for Friday, October 28. Woolworths is closing the gap on Coles, AMP is taking a $668m writedown and the BBHO syndicate has withdrawn its bid for S. Kidman & Co.
8.17pm:Risk-averse clients hurt UBS
UBS Group AG said on Friday that net profit declined in the third quarter, as the Swiss bank continued to cope with wary clients.
Zurich-based UBS also disclosed a potential wrinkle for its investment banking business in Asia, where a Hong Kong regulator is scrutinising its work bringing companies to the public markets.
UBS, the world’s biggest wealth manager, has struggled recently to increase revenue amid turbulent markets and global political uncertainty, as clients have refrained from putting their assets to work through trades and investments that can generate fees for the bank.
The bank said Friday that it doesn’t see business conditions improving any time soon, though it has so far managed to compensate by keeping a lid on expenses.
Net profit in the third quarter fell to 827 million Swiss francs ($US832.5 million) from 2.1 billion francs in the same quarter last year. Analysts had expected net profit of 945 million francs. The profit figure for the year-earlier quarter had been padded by a large tax benefit.
On a pretax basis, operating profit rose to 877 million francs in the quarter from 788 million francs a year earlier, UBS said. Operating income fell 2 per cent to 7.03 billion francs, while operating expenses were down 4 per cent, the bank said.
Shares in UBS rose 0.4 per cent.
On Friday, UBS said it continued to experience “client risk aversion” in the quarter. That, combined with low and negative interest rates that also curb revenue for the bank, are likely to continue presenting challenges for the foreseeable future, UBS said. Dow Jones
8.12pm:Pound hits British Airways
British Airways’ owner lowered on Friday its annual earnings forecast for a second time since Britain voted for Brexit, blaming the latest downgrade mainly on a plunging pound.
International Airlines Group said it expected full-year operating profit of €2.5bn, or 7.0 per cent higher compared with 2015.
It had already cut an initial estimate at the end of July, saying it expected an increase above 10 percent.
Britain voted June 23 in favour of exiting the European Union, triggering a plunge in the pound to 31-year lows against the dollar and 7.5-year troughs versus the euro. AFP
7.46pm:ECB official eyes sustained stimulus
The European Central Bank will keep its stimulus measures in place until inflation picks up sustainably, a senior ECB official said on Friday, underlining recent signals that the central bank could continue its €80 billion ($US87.18bn) a month bond-purchase program beyond March. Dow Jones
7.27pm:RBS earnings surge amid restructure
Royal Bank of Scotland says third-quarter earnings rose 61 per cent as efforts to restructure the taxpayer-owned bank reduced costs. The bank, bailed out by the British government during the 2008 financial crisis, said on Friday operating profit before one-time items rose to £1.33 billion ($US1.6bn) from £826m in the same period a year earlier.
After one-time items, the bank reported a net loss of £469m in the quarter, compared with a profit of £940m in the same quarter of 2015 when it posted a £1.15bn gain on the sale of Citizens Bank in the US Chief Executive Ross McEwan said: “We’ve said that 2015 and 2016 would be noisy as we work through legacy issues and transform this bank for customers. These results reflect that noise.” AP
6.35pm:European stocks drop
Europe’s main stock markets slid at the start of trading on Friday, with London’s benchmark FTSE 100 index down 0.4 per cent at 6,956.40 points.
In the eurozone, Frankfurt’s DAX 30 shed 0.8 per cent to 10,634.99 points and the Paris CAC 40 index declined 0.4 per cent to 4,515.25 compared with Thursday’s close. AFP
6.17pm:Tokyo stocks end stronger
Tokyo stocks closed higher on Friday, with exporters boosted by a drop in the yen to three-month lows, while traders shrugged off another slack inflation reading.
With bets increasing that the US Federal Reserve will hike interest rates by the end of the year, the dollar broke through the ¥105 mark in New York on Thursday and extended its gains in Tokyo.
“The weaker yen is a boost for Japanese stocks,” Yutaka Miura, a senior technical analyst at Mizuho Securities Co, told Bloomberg News.
The benchmark Nikkei 225 index rose 0.63 per cent, or 109.99 points, to 17,446.41. Over the week, it gained 1.52 per cent.
The Topix index of all first-section issues was up 0.75 per cent, or 10.40 points, to 1,392.41. It jumped 1.99 per cent from a week earlier.
A weak yen lifts exporters’ business outlook as it bumps up their repatriated income and boosts sales by making their products more competitive overseas.
The greenback was trading at ¥105.39 on Friday afternoon against ¥105.20 in New York late Thursday and well up from the 104.60 yen level seen in Asia earlier Ton hursday.
Official data released on Friday showed Japanese consumer prices fell for a seventh straight month in September, in a fresh blow to the government and Bank of Japan as they try to kickstart inflation.
Also, household spending shrank 2.1 per cent on-year last month, although that was marginally better than expectations. AFP
5.55pm:Dreamworld extends closure
Glenda Korporaal
Queensland theme park Dreamworld will remain closed until the funerals of all four victims who died on Tuesday have been held.
Dreamworld chief executive Craig Davidson made the announcement in a statement to the media this afternoon.
“No attraction in this park will reopen until internal and external safety audits are completed and peer reviewed,” he said. Read more.
5.07pm:Market sees 5pc chance of rate cut
Australia’s central bank will likely leave interest rates unchanged at a meeting on Tuesday as policy makers balance concerns around low inflation with fears linked to an overheating property market.
A survey of 10 economists by The Wall Street Journal showed seven expect the Reserve Bank of Australia to leave the official cash rate steady at a record low of 1.50 per cent. Financial markets have priced in just a 5 per cent chance of an interest rate cut.
The low probability of action comes after data showing stronger-than-expected inflation in the third quarter and recent comments by the new RBA governor indicating that higher inflation was not to be achieved at all costs.
Consumer prices rose by 0.7 per cent in the quarter, outstripping market expectations for an increase of just 0.5 per cent. Inflation quickened to 1.3 per cent from a year earlier, but still below the RBA’s target range of 2 per cent to 3 per cent.
Economists point to weak core inflation readings, saying the RBA will look at these measures more closely than headline inflation numbers.
Paul Brennan, chief economist at Citigroup, Australia, said if the RBA keeps the interest rate on hold next week, they are likely to trim it in the first half of next year.
The RBA should have “no confidence” that inflation is heading back to its desired target range, Mr Brennan said. Dow Jones
4.23pm:ASX in red as yield stocks under pressure
The Australian sharemarket has ended the week with a third straight red session, as a stunning writedown at AMP and impairments at ANZ dampened sentiment and overshadowed a better-than-expected result from Macquarie Group, writes Daniel Palmer.
At the close, the benchmark S&P/ASX 200 index slipped 11.7 points, or 0.22 per cent, to 5,283.8, while the broader All Ordinaries index weakened 7.5 points, or 0.14 per cent, to 5,370.9.
The benchmark index ended down 2.7 per cent for the week and settled at its lowest mark since mid-September.
Rising bond yields put further heat on high-yield stocks that had been recent favourites of traders given the low interest rate environment.
“High growth stocks remain under pressure, as investors trim positions in former market darlings,” CMC Markets chief market strategist Michael McCarthy
“Volumes were elevated in both cash and futures markets ahead of important market risk events.” Read more.
3.47pm:Oil uncertainty ahead of OPEC meeting
Oil prices got a boost in late September when the Organization of the Petroleum Exporting Countries agreed that group production needed to be scaled back in order to improve prices. However, rising uncertainty over the execution of the plan has dragged oil prices over 2 per cent lower this week so far.
Analysts say the longstanding feud between Saudi Arabia and Iran, various members’ requests to be exempted from the plan, and the past record of some countries not sticking to their production quotas, all point to a wobbly foundation for a production cut pact.
Moreover, without a pledge from non-OPEC producers such as Russia to also limit production, OPEC producers would have less reason to curb their output.
This weekend, oil officials from OPEC countries are scheduled to meet in Vienna to discuss details.
3.17pm:CBA faces revolt on exec pay
CBA chair David Turner faces a big protest vote at his last annual meeting, with Ownership Matters joining ISS in recommending against the bank’s remuneration report and equity grant to chief executive Ian Narev.
Yesterday’s ASIC report into fees for no advice was the decisive factor because the bank had confided it was aware of the issue and made provisions for the snafu but wealth management chief Annabel Spring was the only executive to receive less than 100 per cent of her short-term incentive.
John Durie
3.06pm:Star looks at reducing risk in China
The Star Entertainment Group’s chief executive Matt Bekier says the casino company and its Chinese customers are being “cautious” since the arrest of rival Crown Resort’s staff in the economic powerhouse, writes Sarah-Jane Tasker.
Mr Bekier, in his first comments on his rival’s China drama, which has wiped around $700 million from The Star’s market value since the arrests were made two weeks ago, added that The Star was also examining if there was more it could do to reduce its risk in China.
“Because there is a lot of misinformation and very little reliable information, everybody is extremely cautious and that goes for us and some of our customers,” he told The Australian after the company’s annual general meeting today.
2.36pm:BHP’s steely resolve over Samarco
From Robert Gottliebsen’s column today:
The position of BHP in the aftermath of the Samarco disaster could so easily have been much worse. In 2012-13, BHP had three good candidates for the position of chief executive to replace Marius Kloppers.
One of those candidates was Marcus Randolph who sat on the Samarco board as part of his BHP executive duties. Andrew Mackenzie was chosen as CEO and, as is normal in such situations, Marcus Randolph left the company and stepped down from his position at Samarco.
Now he is charged with murder (it is referred to as ‘qualified homicide’) although he was absent from the Samarco board for well over two years before the tailings dam burst.
2.13pm:Japan deflationary pressure grows
Japan’s consumer prices fell in September for the seventh straight month, data showed Friday, heaping more pressure on the central bank to push back its inflation target deadline.
The disappointing data came as the world’s third largest economy struggles to kickstart growth and conquer a long battle against deflation.
Core consumer prices, excluding volatile fresh food costs, declined 0.5 per cent on-year — in line with the market forecast — putting the Bank of Japan’s 2.0 per cent inflation target further out of reach.
The BoJ has repeated pledges to continue monetary easing as needed until inflation reaches and stabilises at the target, which was first unveiled over three years ago as a cornerstone of Prime Minister Shinzo Abe’s economic revival policy.
With prices still nowhere near that level, BoJ Governor Haruhiko Kuroda is reportedly considering rolling back the deadline for the goal, currently set in March 2018.
The Mainichi Shimbun said last week that the bank started considering the postponement and was likely to make a final decision following discussions at a policy meeting next week.
“Falling energy prices as well as the impact of the yen’s appreciation continued pressuring CPI figures,” said Michinori Naruse, an analyst at Japan Research Institute.
“Under this situation, the Bank of Japan has no choice but to delay the deadline of the target,” Naruse said.
Separately, government figures also showed that household spending in September shrank 2.1 per cent from a year ago, slightly better than expectations for a drop of 2.7 per cent.
Unemployment, meanwhile, remained at a multi-decade low of 3.0 per cent. Many economists are increasingly writing off Abe’s eponymous spend-for-growth policy to fire up the economy, dubbed Abenomics, the centrepiece of which is the central bank’s massive bond-purchase program.
The government in July announced a whopping 28-trillion-yen ($US266-billion) package aimed at stimulating growth, after Britain’s June vote to quit the European Union sent financial markets into a tailspin and sparked a yen rally.
Japan’s economy contracted in the last three months of 2015, before bouncing back in January-March with a 0.5 per cent rise on-quarter and then a 0.2 per cent expansion in April-June. AFP
1.44pm:Bad news for AMP
John Durie
A combination of concern over planned government changes to superannuation and a massive increase in wealth protection claims has resulted in a profit warning from AMP which sent its stock price spiralling down to a 30-month low of $4.85 a share.
The bad news came on a day in which AMP also unveiled a new reinsurance deal with Munich Re which will free up some $500 million in capital and allow capital to be returned to shareholders.
The market ignored this good news and instead focused its attention on the structural problems in the insurance industry which have led to an increase in claims.
AMP’s woes are compounded by the fact that its biggest competitors, Dai-ichi and AIG, are able to provide lower priced cover because of their lower cost of capital. Read more.
1.20pm:IOOF class action quashed
A proposed class action against financial services company IOOF has been prohibited by the Victorian Supreme Court.
Maurice Blackburn Lawyers had planned to pursue a class action on behalf of tens of thousands of IOOF shareholders over the company’s handling of allegations of corporate misconduct.
IOOF shares dropped 13 per cent in June 2015 when allegations were raised by the media of problems with the compliance culture of its research team. The company said the issues had been dealt with appropriately at the time, but Maurice Blackburn claimed IOOF breached its continuous disclosure obligations by not previously informing the market of the issues.
12.26pm:ASX is slumping into the weekend
The local market has dropped further at lunch and looks set to end the week deeply in the red as technical support levels come under pressure.
The S&P/ASX 200 is down 0.5 per cent to 5267 points, just 11 points above the 200-day moving average.
The market’s price to earnings ratio has fallen to 14.5x, which is near the valuation support level that held in June and September.
All eyes will be on that key 5256 point level after three days of selling, which have wiped 3.7 per cent, or $56.2 billion, off the index.
12.20pm:MG reviews operations, chairman to exit
Besieged dairy group Murray Goulburn has embarked on a review of operations in the wake of a tumultuous year that has seen it fall well short of guidance and lose a significant portion of its suppliers due to unexpectedly brutal price cuts, writes Daniel Palmer.
At the group’s annual general meeting, chairman Philip Tracy also apologised to farmers and declared his intention to exit following a period a substantial turnover of board members and key management personnel.
In a wide-ranging update, interim managing director David Mallinson said the co-op’s current cost-cutting program was on track, with more initiatives in the works as an operational review kicks off in earnest.
12.01pm:Citi keeps rate cut call
Citi is keeping its non-consensus call for the RBA to cut the cash rate target by 25bps next Tuesday.
“In our view there remains a good case for further near-term easing by the RBA,” say Citi economists led by Paul Brennan.
“That said, we acknowledge the minuscule market pricing for the November Board meeting and the risk that the RBA takes longer to assess whether another cut is warranted.”
“But if the RBA passes on a cut, we believe further policy easing will need to be delivered in the first half of next year.”
Market pricing of an RBA rate cut next week has fallen to 5 per cent from 15 per cent before the jump in headline CPI data this week.
11.36am:ASX hits fresh 5-week low
Australia’s S&P/ASX 200 fell 0.2 per cent to a new five-week low of 5283.8 as bond proxies and banks weakened.
Benchmark 10-year bond yields are up four basis points at 2.37 per cent after hitting new five-month high of 2.39 per cent amid a global sell-off.
The rising “risk free rate” competes with dividend yields available on the share market, but it could be giving a positive economic growth signal.
Among bond proxies, Scentre Group, Transurban, Westfield, Sydney Airport and Vicinity Centres are down between 0.7 per cent and 1.6 per cent.
Major banks including CBA, Westpac and ANZ are down 0.4-0.7 per cent, though NAB is up 1.4 per cent after yesterday’s FY result.
Macquarie is up 2.8 per cent after its results today, though AMP is down 8.4 per cent after a hefty writedown.
The ASX 200 was last down 0.2 per cent at 5285.
READ:‘Bondcano’ has investors rattled
11.20am:Macquarie to cut 500 jobs
Macquarie Group has detailed over 500 job cuts as it booked a 2 per cent fall in earnings for the first half with market volatility weighing on its trading activities, writes Daniel Palmer.
The investment bank reaffirmed its guidance for the full year, with expectations it will broadly match the record $2.06 billion profit recorded in fiscal 2016.
The group’s shares jumped around 2 per cent in morning trade given the result beat analysts’ expectations.
11.03am:Sell Blackmores — CLSA
China’s regulatory headwinds will continue to hit Blackmores, analysts warn, with a “sell” put on its stock on an expected future hit to earnings, writes Sarah-Jane Tasker.
CLSA analyst Shaun Weick has told clients that they should sell the vitamin maker as he also significantly cut his earnings per share guidance for the company.
“A change in (Chinese) exporter procurement strategy through late 2016 has contributed to a significant build up in domestic inventory,” he said.
Blackmores yesterday revealed a 46.6 per cent drop in net profit to $12 million for the first quarter of 2017, and an 8.1 per cent fall in group sales to $149m.
10.46am:BBHO withdraws bid for Kidman: sources
Gina Rinehart will almost certainly take control of S. Kidman & Co after a rival bid, from four wealthy farming families, was withdrawn this morning.
The decision by the Buntine, Brinkworth, Harris and Oldfield families came after the Kidman board yesterday unanimously recommended shareholders accept the $386.5 million offer from Hancock Prospecting and Chinese firm Shanghai CRED.
Kylar Loussikian
10.40am:Woolies, BHP do the heavy lifting
Woolworths and BHP are keeping the ASX in positive territory today, just, as further falls from high-yield stocks put pressure on the market.
At 10:15am AEDT the Australian index was just 0.1 per cent higher at 5300.5 points, compared with the 0.5 per cent suggested by the SPI futures and following 2.7 per cent in losses over the past two days.
All eyes are on the Woolies turnaround story, which now appears to be in full flight as the retailer unveiled its first positive comparable sales growth figures at its supermarkets for more than a year.
Woolworths is up 2.6 per cent to $25.45, making it the seventh-best performing stock on the ASX 200 this morning.
Elsewhere BHP gained 2.2 per cent to $23.01 after the price of Brent crude oil lifted 1 per cent overnight and the price of iron ore remained steady at $US63.04.
10.28am:AMP update ‘catastrophic’: CLSA
CLSA analyst Swati Reddy has labelled AMP’s update today as “catastrophic”.
AMP said it expects to take a $668m charge on its wealth protection business amid “deteriorating” conditions across the industry.
Ms Reddy notes the writedown will wipe away $1.0/share of embedded value, and that the 50 per cent quota share agreement with Munich Re, could release $500m of capital.
“Going forward FY17 onwards, profit margin will be impacted $90m per annum due to these two events, that is profit margin will fall by more than 50 per cent from 9 per cent currently to about 4.0 per cent.”
AMP shares were last down 6.6 per cent at $4.81 after hitting a two-and-a-half-year low of $4.65.
10.15am:AMP shares slump on writedown
AMP shares have dived 9.7 per cent to a two-and-a-half-year low of $4.65 after it reported a $668m charge on its wealth protection business.
The financial services giant has been forced to “reset” its wealth protection business, resulting in the writedown as it admitted a decline in the life insurance sector was not merely a cyclical headwind.
The group also warned the debate about superannuation reforms that ultimately ended with a well-received backflip from the Turnbull government had weighed on confidence in the sector.
AMP shares were last down 7.7 per cent at $4.77.
With Daniel Palmer
9.50am:Equities ‘resilient’ to bond sell-off: ANZ
Global equity markets were “surprisingly resilient” to the rise in developed market bond yields overnight, ANZ economists note.
Benchmark Australian 10-year bond yields are up 4 basis points at 2.37 per cent after hitting a six-month high of 2.39 per cent in early trading.
That followed a surge in German 10-year bond yields from 0.1 per cent to a five-month high of 0.17 per cent, which flowed through to US Treasuries.
US 10-year Treasuries rose six basis points to a five-month high of 1.85 per cent.
9.40am:Stocks in for a much-needed boost
Australian stocks could see some welcome positivity today after two days of heavy selling put the local market in an ugly position.
The SPI 200 is pointing to a 0.5 per cent rise but fair value suggests a more modest 0.2 per cent rise.
Yesterday saw the ASX 200 drop 1.2 per cent to 5295.5 points and took the two-day losses to 2.7 per cent.
IG chief strategist Chris Weston points to rising bond yields as continuing to be a problem for local yield stocks.
“The ASX 200 has gone the opposite way of Japan, with the Aussie index down 2.4 per cent this week,” Mr Weston said.
“Rising bond yields in developed markets are, and will continue to be, a huge headwind for the local market, which is why traders have been far happier to be long material stocks, which are bought for growth as opposed to income.”
Mr Weston explains that high bond yields reduce the attractiveness of the income streams from dividend payments, which is becoming a key theme for the market and has been labelled the ‘bondcano’ by Credit Suisse’s Hasan Tevfik.
“Technically (in the ASX 200) we saw a nice move back and rejection of the August lows on Monday and the selling has really manifested on itself from here,” Chris Weston said.
“We can expect a slightly stronger open today, with our call currently sitting at 5306, but to close the week in positive territory (i.e. above 5430) we subscribe a mere 1 per cent probability.”
BHP Billiton will be one to watch — its ADRs are pointing to a 1.2 per cent gain at the open, while ANZ could come under pressure after the bank warned $360 million in impairments will impact next week’s full-year numbers.
9.24am:Australian equities undervalued — UBS
The real (inflation adjusted) total return of Australia’s All Ordinaries share index is marginally undervalued relative to the long-run trend, according to UBS.
The broker says the model is currently predicting a real total return for Australian equities (given current price) of 7.4 per cent per annum over the next 10 years.
“Interestingly, periods of major ‘overvaluation’ in 1968/69, 1987 and 2007 indeed coincide with subsequent major falls in the All Ordinaries index,” UBS equity strategists David Cassidy and Dean Dusanic say.
“Likewise, periods of “undervaluation” have corresponded to good buying opportunities.”
9.11am:Investors on alert for the erupting ‘bondcano’
The benchmark S&P/ASX 200 index fell 1.2 per cent to a five-week low of 5295.5 points yesterday.
Of course the sell-off this week has been magnified by stock-specific factors, such as share price falls in Wesfarmers, CBA, and the tourism sector. But it’s worth noting that the “bondcano” is still erupting, with negative consequences for so-called “bond proxies” and potentially the entire market in the short term if bond yields rise any further.
READ:‘Bondcano’ has investors rattled
9.00am:Woolworths closes the gap on Coles
Woolworths has secured its first positive comparable sales growth at its core supermarkets unit for more than a year, but continues to trail the growth recorded by key rival Coles, writes Daniel Palmer.
For the 14 weeks to September 30, Woolworths’ total food sales lifted 1.7 per cent to $9.3 billion, while comparable sales were up 0.7 per cent.
8.55am:Macquarie H1 earnings dip
Macquarie Group has booked a 2 per cent fall in earnings for the first half as market volatility weighed on its trading activities, writes Daniel Palmer.
The investment bank (MQG) reaffirmed its guidance for the full year, with expectations it will broadly match the record $2.06 billion profit recorded in fiscal 2016.
For the six months to September 30, Macquarie recorded earnings of $1.05bn, down 1.9 per cent on the corresponding period last year, but outstripping market forecasts for a reading of $994.5 million.
8.53am:Broker rating changes
Crown Resorts raised to Outperform vs Neutral — Credit Suisse
Regis Resources raised to Overweight vs Neutral — JPMorgan
Beach Energy cut to Underweight vs Overweight — JPMorgan
Beach Energy cut to Underperform vs Sectorperform — RBC
Sandfire Resources raised to Add vs Hold — Morgans
8.18am:$360m hit to hurt ANZ’s full-year result
ANZ has announced second half charges of $360 million that will weigh down its full-year accounts when released to the market next week, Daniel Palmer writes.
Included among the charges is a $100m restructuring impairment, which the company said was made “to support the evolution of the group’s strategy, underpin further productivity through reshaping the workforce (and) reduce complexity and duplication.”
More details on the nature of the impairment will be provided when the bank delivers its full year earnings report on Thursday November 3.
7.10am:Australian market set to open higher
The Australian market is tipped to open around half a per cent higher after a more than one per cent slide in yesterday’s session and as US stocks finished lower.
At 6.45am (AEDT), the overnight share price index futures were up 29 points at 5,282.
Locally, in economic news today, the Reserve Bank of Australia releases September’s financial aggregates data, while the Australian Bureau of Statistics releases the Australian system of national accounts for 2015/16 and the producer price indexes for the September quarter.
The HIA new monthly homes sales report is also due out.
In equities news, Regis Healthcare, The Star Entertainment Group, Murray Goulburn and Carsales.com have annual general meetings scheduled.
In Australia, the market yesterday fell sharply, due to falls across the energy, resources, consumer staples and financial sectors.
The benchmark S & P/ASX200 index lost 64.3 points, or 1.2 per cent, to 5,295.5 points.
The broader All Ordinaries index fell 63.7 points, or 1.17 per cent, to 5,378.4 points.
AAP
7.05am:Iron ore ends winning streak
The iron ore price has snapped its winning streak, edging back from a near six-month high as one analyst warns the recent rally could have been exacerbated by speculation, Elizabeth Redman writes.
Iron ore fell 0.6 per cent to $US62.30 a tonne overnight, according to The Steel Index, after reaching a peak of $US62.70 the previous day. Before the fresh fall, iron ore had either gained or held steady for 13 sessions in a row.
7.00am:Twitter to cut jobs, axe Vine
Twitter says it will slash 9 per cent of its workforce and redirect its focus from driving growth to delivering profits, an about-face following the retreat of several potential acquirer including Salesforce.com
The cost-cutting moves, which include shutting down its Vine video app, come as Twitter reported dwindling revenue growth for the third quarter and another loss over $US100 million. Revenue rose just 8.2 per cent, compared with over 50 per cent growth in the year-ago quarter.
Dow Jones
6.55am:Dollar falls below US76 cents
The Australian dollar has fallen sharply against the US dollar, dropping markedly below the US76 cent mark as the greenback continues to advance.
At 6.35am (AEDT), the local unit was trading at US75.88 cents, down from US76.30 cents on yesterday.
The local currency fell yesterday as traders reconsidered the strength of the inflation data that had prompted the Aussie dollar to rally above US77 cents on Wednesday.
AAP
6.45am:Vale hints at rift with BHP
Vale’s chief executive has signalled that a rift is starting to emerge between the Brazilian mining giant and BHP Billiton, its partner in the Samarco joint venture that experienced a disastrous dam failure last year.
The disagreements centre on waste disposal and debt at Samarco, Vale CEO Murilo Ferreira said in a conference call.
Dow Jones
6.40am:Wall St steady as bonds drop
US stocks swung between slight gains and losses overnight as a sell-off in government bonds kept investors on edge.
European stocks were also little changed after Britain’s GDP figures beat forecasts despite the effect of the Brexit vote.
Dow Jones
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