BusinessNow: Live coverage of financial markets and companies, plus analysis and opinion
Wesfarmers shares are deep in the red after Coles sales disappointed.
- Inflation beats expectations
- Crown shares hit 12-month low
- Time to rethink iron ore view?
- Wesfarmers down as Coles disappoints
- Dreamworld tragedy hits tourism stocks
- Investors flee Ardent Leisure
- Watch tourism stocks today
- Ten more held in China’s Crown hit
- Iron ore jumps to 2-month high
Welcome to the BusinessNow blog for Wednesday, October 26. Ardent Leisure shares are deep in the red following the Dreamworld tragedy, Wesfarmers is dragging the ASX down, and the Australian dollar is higher on better-than-expected CPI data.
8.00pm:Nintendo’s Pokemon catch limited
Japanese video game maker Nintendo Co has slashed its operating profit and sales forecasts for this fiscal year, despite the global success of “Pokemon Go.”
The maker of Super Mario games and the Wii U console said on Wednesday that it booked a ¥62.7 billion ($US601.7 million) gain in April-September from its sale of the Seattle Mariners Major League Baseball team.
That helped push its net profit in the half-year to ¥38.3bn ($US368m), up 234 per cent from the same period the year before. But the company booked an operating loss of ¥5.95bn ($US57.1m), compared with an operating profit of about ¥9bn a year earlier.
Nintendo cut its full-year operating profit forecast to ¥30bn ($US288m) from ¥45bn. AP
7.31pm: European stocks slip
European stocks opened lower on Thursday, following Asian equity markets downward after a string of disappointing earnings reports from large US companies.
The Stoxx Europe 600 index pulled back 0.27 per cent shortly after markets opened, led by a 0.38 per cent drops in the UK’s FTSE 100 index and France’s CAC 40.
Consumer confidence data from Germany released early on Wednesday morning showed slightly weaker sentiment than expected at 9.7, its lowest reading since June and below the 10 that analysts had forecast.
Asian stocks were broadly lower, with Hong Kong’s Hang Seng down 0.87 per cent, and China’s Shenzhen A-share index down 0.52 per cent. Japanese equities bucked the trend, and the Nikkei 225 index closed up 0.15 per cent.
After falling by as much as 1.1 per cent intraday on Tuesday, sterling was largely flat against the dollar, at $US1.216. The pound fell by another 0.23 per cent against the euro, to €1.115. Dow Jones
7.04pm:Ardent distances Dreamworld fatalities
Dreamworld will hold a memorial event on Friday for the four people killed on a ride on Monday, but the theme park’s owner, Ardent Leisure, continues to distance itself from the tragedy.
A statement released by Dreamworld tonight said the theme park will reopen on Friday at 11am.
Meanwhile, Dreamworld has established a grief counselling program with Queensland Health and the Red Cross.
However, Ardent Leisure chairman Neil Balnaves and chief executive Deborah Thomas have refused to comment on the tragic event during the day.
Mr Balnaves is reportedly ‘too emotional’ to speak, while Ms Thomas has been holed up at Dreamworld with her mobile phone switched off. Read more.
6.45pm:Dreamworld ride ‘passed certifications’
The Thunder River Rapids ride involved in four deaths on Monday had completed its annual mechanical and structural safety engineering inspection as recently as September 29, Dreamworld says.
In a statement this evening, the theme park said its safety audit was conducted by a specialist external engineering firm. Details of the audit would be provided to the Coroner and workplace safety investigators, it said.
6.18pm:Autosports priced at $2.40 per share
Bridget Carter
The float of the luxury car dealership Autosports has priced at the top of its range.
Shares have been sold at $2.40 each ahead of its listing.Read more.
5.48pm:Earnings lift Tokyo stocks
Tokyo shares closed slightly higher as investors focus on Japan’s latest earnings season, which got into full swing Wednesday with Nintendo and copier maker Canon reporting financial results.
The benchmark Nikkei 225 index gained 0.15 per cent, or 26.59 points, to 17,391.84, hitting a fresh six-month high, while the Topix index of all first-section issues was up 0.39 per cent, or 5.38 points, at 1,382.70. AFP
5.25pm: When no one wants to cook dinner
Eli Greenblat
Call it laziness, or call it a reluctance to leave a warm home for a trip to the local shops in the midst of an extended cold snap across Australia, but consumers are more than ever before dialling up or going online for takeaway and home delivered food — to the cost of supermarkets like Coles and Woolworths.
That growing trend was evident, in part, in the latest sales update from Australia’s second biggest supermarket chain Coles, which revealed that over the three months to September its food and grocery sales slowed by nearly half to just growth of 1.7 per cent.
It was the slowest sales growth for Coles since 2009, with the chain’s boss John Durkan conceding the grocery market had slowed. At the same time competition from a recovering Woolworths and the aggressively expansionist German discounter Aldi had meant the chains dare not pull back on promotions and forcing down prices, he noted. Read more.
4.47pm:Ardent Leisure sheds $253 million
Ardent Leisure has lost nearly a quarter of its market capitalisation in just two days, after four people were killed at its popular Dreamworld theme park on the Gold Coast.
The company’s board has remained silent today, despite the family’s emotional reaction today and the $253 million wiped off the value of the company since Monday’s accident.
Chairman Neil Balnaves is reportedly too emotional to speak, while chief executive Deborah Thomas remains holed up at Dreamworld with her mobile phone switched off.
The Ardent annual meeting will go ahead in Sydney tomorrow, where Mr Balnaves is due to retire. There is speculation he will serve beyond his planned November 6 departure, however, company spokesperson Miche Paterson has not returned calls from The Australian. Read more.
4.21pm:Sharemarket’s worst day in six weeks
The Australian sharemarket has endured its worst day in six weeks as timid growth in Wesfarmers’ retail operations dampened broader market sentiment.
Investors were also shunning the tourism sector following Tuesday’s Dreamworld tragedy, while weakening crude prices through the Asian session exacerbated a weak offshore lead.
At the close, the benchmark S&P/ASX 200 index slumped 83 points, or 1.52 per cent, to 5,359.8, while the broader All Ordinaries index skidded 81.2 points, or 1.47 per cent, to 5,442.1.
The retail sector lagged after a disappointing trading update from Wesfarmers, with Coles’ sales showing the weakest expansion in seven years and growth at Bunnings slowing.
Wesfarmers slumped 5.7 per cent to $41.45, its worst one-day loss since 2009, while rival Woolworths edged down 0.5 per cent to $25.12. Read more.
4.09pm:Bank crusader faces crunch
Richard Gluyas
It is with deep regret that the Culleton Oversight Committee reports that our work is nearing completion.
While it’s no excuse, it’s simply a fact that we’ve had to devote considerable resources to an existential threat posed by NASA, the United Nations, the mainstream media and Hillary Clinton.
As Hillary and these agencies have engaged COC in highly tactical, cross-border version of rope-a-dope, our patron and guiding light, One Nation senator and anti-bank insurgent Rod Culleton, has been under career-threatening fire.
Between us, COC is fully aware that accountability sometimes isn’t Culleton’s strong suit. Read more.
3.45pm:Is Coles’ dream run finally over?
Woolworths’ fightback is gaining some traction, writes John Durie, with Coles posting its weakest first quarter comparable food and liquor sales increase since the first quarter of 2009.
Is Coles’ dream run finally coming to an end? And what does it mean for customers?
3.11pm:Arrests hit Fonterra’s China deal
Fonterra Cooperative Group has suspended a distribution agreement with China’s Jiawai, after Shanghai food safety officials and police announced the arrest of 19 people suspected of repackaging expired milk powder from New Zealand.
2.55pm:ASX 200 slides toward 200-DMA
Australia’s S&P/ASX 200 inex has decisively broken the 100-DMA at 5397.
It has also broken Monday’s low at 5377.4, hitting a five-week low of 5340.1.
On a technical basis, that puts it on course for the 200-DMA at 5251.
But the medium-term outlook is neutral while it stays above the September low at 5192.
2.40pm:ASX eyes biggest fall in 6 weeks
Australia’s S&P/ASX 200 share index is down 1.8 per cent at 5342 and is heading for its biggest fall in six weeks.
Wesfarmers is weighing on the index and is down 5.3 per cent on weak food & liquor sales at Coles. This is flowing through to the banks, with CBA down 1.8 per cent.
Elsewhere, JB Hi-Fi and Harvey Norman are also feeling the heat, down 5 per cent and 3.4 per cent respectively.
Bond proxies are also quite weak with Transurban and Sydney Airport each down 3 per cent.
However, long bond yields have barely moved despite stronger-than-expected headline CPI.
That’s probably because core CPI was actually slightly lower than expected.
Oil Search has slid 3.4 per cent and Woodside is off 2.4 per cent after WTI crude fell 1.3 per cent to $49.30 due to Russia rejecting cutbacks.
Milk formula makers A2 Milk and Blackmores are each more than 5 per cent lower after Bega said its JV with Blackmores is struggling.
And Ardent Leisure is down 12 per cent after the Dreamworld disaster yesterday.
Meanwhile, BHP is down 1.5 per cent, but Rio Tinto is up 1.5 per cent after iron ore surged last night.
2.22pm:RBA faces hack attack every 2 seconds
The Reserve Bank is regularly fending off cyber security threats, with potential hackers testing the resiliency of its systems every two seconds, according to the central bank’s technology chief.
Sarv Girn, chief information officer at the RBA, told delegates at the Gartner Symposium on the Gold Coast the central bank was withstanding a barrage of potential attacks, in a speech outlining the broad technological challenges confronting organisations.
Daniel Palmer
2.10pm:Citi sticks with its rate cut call
Citi economists are sticking to their call for an interest rate cut next week.
They note that headline CPI was boosted by temporary “negative supply side shocks”, and the average of core inflation measures remains below target.
“Furthermore, our analysis of the number of price rises within the trimmed mean was less in Q3 compared to Q2 and there were more price falls within the trimmed mean in Q3 when compared to Q2,” Citi economists say.
“There remains a good case for further easing by the RBA, but other macro developments including higher commodity prices could reduce the urgency for a near-term rate cut.”
2.00pm:What does the CPI data mean for the RBA?
For now, Philip Lowe and his board, who we know are ‘not inflation nutters’ wouldn’t be too worried about inflation, and today’s CPI release would have had to be a lot weaker to warrant a rate cut next week, according to RBC Capital head of Australia and New Zealand rates strategy Su-Lin Ong.
RBC says the Reserve Bank won’t make another move this year and it sees a final cut happening in the second quarter of 2017.
“For the RBA, today’s inflation data were largely in line with their forecasts … It had set the bar pretty low today, and any chance of a near-term cut would have demanded something much weaker,” Ms Ong said.
“Nevertheless, the details, coupled with the leading inflation indicators, suggest continued sub-target inflation for a few more quarters.
“We do not expect these forecasts to change next week when updated in the November Monetary Statement on Monetary Policy and they will, accordingly, continue to imply a mild easing bias.
“We do not, however, expect this bias to be exercised anytime soon given firmer commodity prices/national income, a stronger housing sector, and continued reluctance on the part of global central banks to provide much more support.
“The picture may, however, be a little different further into 2017 as the residential construction cycle peaks, inflation stays low, and global growth remains modest. We stick with our long-held cash rate target of 1.50 per cent by end 2016 and a final cut in Q2 2017.”
1.45pm:Telstra chair slams David Murray
New Telstra chairman John Mullen has launched an extraordinary attack on former Future Fund chairman David Murray, labelling his criticism of the telco’s former chairman Catherine Livingstone as “disgraceful’’.
Answering a recent question about his criticism of Ms Livingstone’s performance while leading the Business Council of Australia, Mr Murray also took aim at her chairmanship of the telco after what he called “six months of absolute nightmare service’’ he received personally as a customer.
Ms Livingstone has just taken over as chair of the Commonwealth Bank and Mr Murray said her reign at Telstra meant she was not in “not in a good position” to start from at CBA.
Damon Kitney
1.15pm:Wesfarmers heads for biggest fall since 2009
Wesfarmers is down 5 per cent at $41.78 and is heading for its biggest one-day fall since 2009.
Shares earlier fell as much as 5.6 per cent to a three-month low of $41.51 after disappointing food & liquor sales at its Coles supermarkets.
“This performance will call into question how aggressively Coles will defend its market share,” Macquarie analysts say.
“While we do not anticipate Coles to have lost share at this stage, any further deterioration over the all-important Christmas trading period could see the share dynamics change.”
“Slowdown in Bunnings was anticipated but Target’s sales performance was much more adversely impacted by the Toy Sale than first thought.”
On a technical basis, a daily close below the September low at $42.00 will leave a lot of pressure on $41.46 - the 61.8 per cent retracement of the June-October rise.
A break of $41.46 could trigger a fall all the way back to the June low at $38.62.
12.35pm:ASX slump much worse than expected
Australian shares have been crunched today and are noticeably underperforming in the region as market majors see much worse-than-expected falls.
At 12.20pm AEST the S&P/ASX 200 was 1.5 per cent in the red for the day at 5362 points, and unfortunately it can’t be claimed the move is exaggerated by low volumes, which are currently 22 per cent above average.
The ASX is the worst performing index in Asia, with the Nikkei giving up just 0.3 per cent, the Hang Seng down 0.2 per cent and the Shanghai Comp lifting 0.1 per cent.
Wesfarmers is making a mess, down 4.9 per cent to $41.89 following news of slowing sales growth at Coles. Wesfarmers is currently the fifth-worst performing stock in the 200.
Woolworths, meanwhile, is just 0.3 per cent weaker for the day.
The big four banks have lost between 1 per cent and 1.4 per cent, while Telstra has lost 0.7 per cent and CSL drops 0.9 per cent.
BHP Billiton fell 1 per cent despite its ADRs pointing to a rise of almost that amount following a strong 4.5 per cent rise in the iron ore price. Rio Tinto is one of the only bright spots among the blue chips – up 0.8 per cent to $52.91.
Ardent Leisure shares have added to yesterday’s loss with another 11.5 per cent wiped off the shares following the loss of four lives at its Dreamworld theme park in the Gold Coast.
On the positive side of things, smaller mining stocks are outperforming – Fortescue is up 1.1 per cent, while most gold miners are pushing around 1 per cent higher today.
12.34pm:Is the Aussie about to take off?
Overall stronger-than-expected CPI data have given the Australian dollar a boost, as has the strongest iron ore price in 10 weeks.
But there’s still a small risk of the RBA cutting rates next week and a bigger risk of the Fed hiking US rates in December.
Certainly the charts look increasingly positive as AUD/USD is trading well above a long-term downtrend line, although it’s yet to see a sustained break.
AUD/USD is currently trading around US76.89c, after jumping from US76.45c to US77.09c on the CPI data.
The weekly downtrend line from March 2013 comes in near US75.90c, but there have been several false breaks in recent weeks.
Given the length of the downtrend, the line needs to break on a weekly closing basis to be sure it has indeed broken.
Even, then, AUD/USD would need to accelerate to the upside by breaking the August peak at US77.56c to prove it’s not just drifting sideways.
The major trend in peaks and troughs will be neutral for AUD/USD while it remains below the April peak at US78.35c.
12.20pm:What economists are saying about CPI
Here are some tweets on the CPI data and dollar reaction:
AUDUSD pushing 77c... Gbpaud the biggest % move on day -0.7%. 3.8% cheaper to go to Libya thanks to Q3 CPI
— Chris Weston (@ChrisWeston_IG) October 26, 2016
CPI data pumps the Aussie Dollar up, but is a curb on further cuts enough to drive $AUDUSD through wedge resistance? pic.twitter.com/MuLlrWdwpH
— John Kicklighter (@JohnKicklighter) October 26, 2016
..Q3 CPI probably not low enuf to bring on another cut next week given stronger growth & comm prices. But close call tho
— Shane Oliver (@ShaneOliverAMP) October 26, 2016
If the RBA cut rates next week, what are they odds it would unleash an inflation surge? I'd suggest close to zero. But it might help growth
— Stephen Koukoulas (@TheKouk) October 26, 2016
12.02pm:Rate cut looking less likely after CPI
The chance of further RBA rate cuts has dropped after the release of the September quarter CPI data.
The market-implied chance of a 25-point cut in the cash rate next week has fallen to 6 per cent from 15 per cent yesterday.
Odds of a cut by June next year have fallen to 30 per cent versus 37 per cent yesterday.
As well as at the above-consensus headline CPI, there have been some upward revisions.
Weighted median CPI for the June quarter was revised up to 0.5 per cent quarter on quarter and 1.5 per cent year on year.
That’s up from the 0.4 per cent and 1.3 per cent originally reported.
It adds to the case for no cut to the official cash rate next month.
11.41am:Headline CPI beats expectations
Headline CPI for the September quarter beat expectations, rising 0.7 per cent quarter on quarter and 1.1 per cent year-on-year, above the 0.5 per cent and 1.1 per cent expected.
The Australian dollar jumped on the data, rising from US76.45c to US77.05c on the stronger headline numbers.
For rate-watchers, the data don’t seem weak enough to warrant an urgent cut in the official cash rate.
However, the average of “core” CPI measures was 0.35 per cent and 1.5 per cent, slightly below market expectations of 0.43 per cent and 1.55 per cent.
Trimmed mean CPI rose 0.4 per cent quarter on quarter and 1.7 per cent year on year, as expected.
But weighted median CPI rose 0.3 per cent quarter on quarter and 1.3 year on year versus the 0.4 per cent and 1.4 per cent expected.
“These numbers aren’t quite low enough for the RBA to cut next week,” AMP’s Shane Oliver says. “But its a boarder-line number, given the low core CPI.”
The S&P/ASX 200 share index hit a five-week low of 5364.9 just after the data was released, and is down 1.4 per cent.
11.25am:Crown shares hit 12-month low
Crown shares have slipped to a more-than 12-month low this morning following news China’s crackdown on the company’s practices has intensified.
A day after 18 Crown employees in China were detained in lightning raids across the country, police moved on 87 Crown customers, inviting them to “take tea”, or present themselves for questioning, The Australian’s Rowan Callick and Damon Kitney write.
Ten of them, who are organisers of junkets, were detained and remain in custody, The Australian understands.
At just before 11am AEDT Crown shares were 1.3 per cent weaker for the day at $10.55, but had earlier dipped to an intraday low of $10.49 – the lowest the stock has been since October 2 last year.
News last Monday that 18 Crown staff members had been arrested in China on suspicion of gambling crimes saw the stock crash almost 14 per cent in its worst one-day fall on record.
Analyst recommendations still paint a relatively positive picture on Crown, with six ‘buy’ recommendations appearing, two ‘holds’ and two ‘sells’, with a consensus 12-month price target of $13.79.
The broader ASX 200, meanwhile, is down a sharper-than-expected 1.3 per cent to 5374 points as Wesfarmers weighs heavily following weak Coles sales numbers.
The local index is on track for its biggest fall in six weeks.
11.11am:Coming up at 1130 AEDT - CPI
CPI data for the September quarter will be closely watched when it’s released at 1130 AEDT.
Headline CPI is expected to rise 0.5 per cent quarter-on-quarter and 1.1 per cent year-on-year.
That would be a slight increase from the 0.4 per cent and 1.0 per cent reported for the June quarter.
The headline annual rate of 1 per cent for the June quarter was a 17-year low.
The headline quarterly rate hit an eight-year low of -0.2 per cent in the March quarter.
The average of core measures is expected to rise 0.4 per cent quarter-on-quarter and 1.55 per cent year-on-year.
Core CPI averaged 1.5 per cent in the June quarter.
10.58am:Stocks slump as Ardent hit
The Australian sharemarket has slumped at the open, weighed by poor first quarter sales from Wesfarmers, a sell-off in tourism-exposed stocks following the Dreamworld tragedy and a weak Wall Street lead.
At the 10.15am (AEDT) official market open, the benchmark S&P/ASX 200 index skidded 41.4 points, or 0.76 per cent, to 5,401.4, while the broader All Ordinaries index lost 38.3 points, or 0.69 per cent, to 5,485.
10.37am:Time to rethink bearish view on iron ore?
It’s getting difficult to ignore the strong iron ore price, which jumped again yesterday, according to CMC chief strategist Michael McCarthy.
“Mining stocks look like being a bright spot for the local market again today,” Mr McCarthy said.
“Fortescue Mining broke decisively through recent resistance and was assisted by comments at the AGM, which confirmed guidance on cost control.
“While many expect iron ore prices to fall next year as supply increases, the current price strength based on better-than-expected demand naturally leads to doubts whether the bearish view is sustainable.”
Fortescue is up another 0.9 per cent this morning to $5.49, which marks yet another two-and-a-half-year high.
Analysts remain bearish on Fortescue after the company’s shares rocketed almost 200 per cent in the year to date, making FMG the third-best performing stock on the ASX 200 for 2016.
But investors continue to applaud the company’s cost cutting and debt repayment strategies.
10.30am:Wesfarmers down 3.4% as Coles disappoints
Wesfarmers is down 3.4 per cent at $42.47 after earlier falling 3.6 per cent on disappointing Coles food & liquor sales.
CLSA says the 1.8 per cent rise in comparable food & liquor sales missed its 3.5 per cent forecast.
The broker notes that Wesfarmers cited increasing competition as well as slower market growth in the quarter.
It says this might be a slight positive for Woolworths, which reports sales on Friday.
Woolworths shares were last down 0.3 per cent at $25.17.
10.25am:Dreamworld tragedy hits tourism stocks
Ardent Leisure’s main rival on the Gold Coast, Village Roadshow, has dropped over 3 per cent this morning as investors grapple with the implications of the Dreamworld tragedy for the rest of the industry.
At 10:15am AEDT the stock was 3.4 per cent weaker at $5.07, while hotel operator Mantra lost 2.8 per cent and Qantas slipped 0.6 per cent.
Village Roadshow operates Movie World, SeaWorld and Wet’n’Wild on the Gold Coast.
10.21am:Bega Cheese slides further
Bega Cheese has dropped another 4.6 per cent to a 12-month low of $5.14 in early trade.
Marketmatters.com.au says further weakness is “highly likely”.
The advisory firm says $4.00 a share, another 20 per cent drop, is a strong possibility.
It notes that the stock closed on a 2017 PE of 22.2 yesterday.
The company is forecasting flat earnings for the year ahead and it sees ongoing risks of regulation change in China and oversupply.
10:16am:Investors flee Ardent Leisure
Investors have fled Ardent Leisure at the open following the news of four deaths at Dreamworld yesterday afternoon.
The stock crashed 22 per cent to $1.82 at the open — its lowest level since February — but quickly bounced to be down less than 9 per cent, at $2.14, before 10.11am AEDT.
The stock fell 11.7 per cent in the final 17 minutes of trade yesterday.
10.14am:Impact of Dreamworld deaths ‘unprecedented’
The impact of yesterday’s tragic loss of four lives at Dreamworld is “unprecedented” and has huge implications for the ASX stock behind the theme park, according to analysts, who see Ardent Leisure’s share price, trading multiple and sentiment to be hit hard in the short term.
Dreamworld accounts for around 33 per cent of Ardent Leisure’s earnings, excluding health clubs, and the key Christmas trading period is expected to “adversely impacted as a result of the negative press commentary”, Citi analysts, led by Sam Teeger, said.
Given the unprecedented nature of this sort of terrible event on a listed Australian tourism stock, the analysts have looked overseas for an idea of what to expect.
“Merlin had an accident in its Alton Towers park [in central England] in June 2015, which was also at the start of its peak trading season. There were two serious injuries but no fatalities,” Citi said.
“The principal cost to the group was a fine of £5 million (levied by Stafford Crown Court). Citi’s UK leisure analyst James Ainley estimates that attendance fell 20-30 per cent at the park involved following the incident.
“Merlin’s share price has now recovered to levels at which it was trading prior to the incident — however, we do acknowledge that the company has been a Brexit beneficiary from the lower GBP.”
“Based on the Merlin experience, we expect Dreamworld attendance to be adversely impacted over the upcoming peak Christmas trading period, and beyond, as a result of negative press commentary.”
Elsewhere, Morgans analysts opted to cut Ardent Leisure to ‘hold’ from ‘add’ citing “significant uncertainty surrounding the actual incident and likely impact for AAD”.
“Following the incident, we expect AAD’s share price, trading multiple and general sentiment towards the stock to be under pressure in the short term at least.”
Ardent Leisure shares tumbled 11.7 per cent in the final 17 minutes of yesterday’s trade to end the session 7.8 per cent down for the day.
The stock closed at $2.35, which marked the worst fall in a year and the lowest level since August 18.
The company’s management is due to front shareholders tomorrow for its AGM.
10.03am:Coles sales miss estimates
Wesfarmers has reported a slowdown in growth at its core Bunnings and Coles operations, hampered by the liquidation sale at Woolworths’ failed hardware operation Masters and strengthening competition in the grocery sector.
Wesfarmers’ Coles food & liquor comparable sales rose 1.8 per cent in the first quarter versus the 3 per cent expected.
That’s based on the consensus of five analysts surveyed by Bloomberg.
Expect some share price weakness in Wesfarmers, Woolworths and Metcash today.
With Daniel Palmer
9.55am:Ramsay shares set to jump
Ramsay Health Care shares should rise sharply today after it reconfirmed FY earnings guidance.
Its shares were trading around $79.50 before Healthscope’s profit warning last week.
If investor confidence is restored, the shares could rise as much as 10 per cent today.
“Ramsay’s large strategically diversified quality portfolio of hospitals continues to deliver admissions growth in line with its long term trend,” it said.
First quarter results were in line with expectations and the hospital operator reaffirmed its targeting core NPAT and core EPS growth for the group of 10-12 per cent for FY17.
9.30am:Broker rating changes
GUD Holdings cut to Neutral vs Buy — Citi
Ardent Leisure cut to Neutral vs Buy — Citi
Ardent Leisure cut to Hold vs Add — Morgans
APN News & Media price target cut 18% to $3.40; Buy rating kept — Deutsche Bank
9.25am:Ramsay tries to calm investors
Private hospital operator Ramsay Health Care has looked to defuse selling pressure around its shares, informing investors its first quarter numbers show no deceleration in growth from recent trends, writes Daniel Palmer.
The brief update included a reaffirmation of full-year forecasts, with Ramsay looking to fight off market worries about its operations after peer Healthscope stunned the market on Friday by reporting the prospect of zero growth in its core hospitals unit through fiscal 2017.
9.12am:The tourism stocks to watch today
The entire tourism industry could take a hit this week as the public comes to grips with four deaths on a ride at the Ardent Leisure-owned Dreamworld theme park yesterday.
Ardent Leisure shares slumped 11.7 per cent in the final 17 minutes of trade to finish the session at a more than two-month low of $2.35.
The overall loss for the day was 7.8 per cent, which marks the worst fall since November 2015 and a dollar-figure-loss of $36 million to the $1.1 billion company.
Queensland State Premier Annastacia Palaszczuk told Sky News yesterday that 1.8 million people visit the Gold Coast every year and asked tourists to keep their travel plans.
But investors will surely be watching to see which other companies will be hit by the tragic news — Village Roadshow operates Movie World, Sea World and Wet’n’Wild on the Gold Coast, while Qantas, Virgin Australia, Flight Centre and even Mantra could also come under pressure as holidaymakers think twice.
International tourism is also critical for casino profits, so any lift-off in overseas traffic will be bad news for the already-under-siege gambling stocks like Crown and Star Entertainment.
9.09am:Broker rating changes
Incitec Pivot cut to Neutral vs Overweight — JPMorgan
Aconex raised to Outperform vs Neutral — Credit Suisse
Mirvac raised to Buy vs Neutral — UBS
Saracen Mineral raised to Neutral vs Underperform — Macquarie
8.53am:Tourism stocks to take a hit
Aussie stocks could ease today following yesterday’s solid 0.6 per cent rise, with a deadly tragedy on the Gold Coast set to weigh on tourism stocks and a jump in the price of iron ore not expected to light a fire under major miners today.
The SPI 200 is pointing to a 0.2 per cent decline today, while fair value suggests a shallower 0.1 per cent slip is more likely.
Yesterday saw the local market close higher, with financial stocks boosting the index ahead of bank reporting season.
The price of iron ore took off 4.5 per cent overnight to trade at $US61.96, which marks its best gain August 9 and the highest the commodity has been since August 16.
Despite the surge BHP Billiton’s ADRs point to a relatively modest 0.7 per cent rise today ... but the materials sector was a bright spot yesterday.
Meanwhile, quarterly Consumer Price Index figures released today by the ABS will be in focus today.
8.20am:Tourism worries as Ardent shares dive
Queensland’s $23 billion tourism industry is expected to be hit hard by the Dreamworld fatalities, with the share price of the theme park’s owner, Ardent Leisure, plunging more than 11 per cent in late trading yesterday.
As news of the deaths spread globally overnight, tourism officials said the tragedy could adversely impact international holiday-maker arrivals for Queensland. The state’s economy relies heavily on tourism, an industry that employs 220,000.
Lisa Allen, Ben Wilmot
8.06am:Ten more held in China hit on Crown
China’s crackdown on James Packer’s Crown Resorts has widened, with 10 Chinese organisers of junkets licensed by the casino operator to bring high rollers to its Australian properties now believed to be in custody.
A day after 18 Crown employees in China were detained in lightning raids across the country, police moved on 87 Crown customers, inviting them to “take tea” — or present themselves for questioning.
Ten of them, who are organisers of junkets, were detained and remain in custody, The Australian understands.
Rowan Callick, Damon Kitney
7.05am:ASX set to open lower
The Australian market looks set to open lower after falls on Wall Street following disappointing corporate results from several heavyweights.
At 6.45am (AEDT), the share price index was down 17 points at 5,406.
Locally, in economic news today, the Australian Bureau of Statistics releases the consumer price index figures for the September quarter.
In equities news, Ardent Leisure Group’s shares have slumped after four people were killed at its Dreamworld theme park.
In Australia, the market yesterday closed higher, led by the financial sector, as investors start to feel bullish ahead of earnings reports from three of the big four Australian banks.
The benchmark S & P/ASX200 index rose 34.3 points, or 0.63 per cent, to 5,442.8 points.
The broader All Ordinaries index gained 34.2 points, or 0.62 per cent, to 5,523.3 points.
AAP
7.00am:Iron ore jumps to two-month high
The iron ore price has soared above the $US60 threshold to reach a two-month high, putting a rocket under Australia’s major miners in London trade overnight, Elizabeth Redman writes.
The enthusiasm from traders, propelled by a drop in forecast shipments and a simultaneous rally in coal prices, could offer a boost to mining stocks on the ASX today.
6.55am:Dollar continues to bounce back
The Australian dollar has continued to rise against its US counterpart ahead of key local inflation figures.
At 6.35am (AEDT), the local unit was trading at US76.47 cents, up from US76.34 cents yesterday.
The local currency lost ground against the US dollar in morning trade yesterday but bounced from US76 cents at midday on the back of a lift in commodity prices in Asian trading in the afternoon.
It continued its upward path overnight.
The Australian Bureau of Statistics releases consumer price index figures today
AAP
6.45am:Wall St dips on mixed earnings
US stocks fell overnight, with consumer-discretionary shares leading losses after a string of disappointing earnings reports.
European stocks closed mixed after fresh turmoil in the Italian banking sector and the unveiling of plans to expand Heathrow Airport in London.
Dow Jones
6.40am:US Fed official eyes December hike
Federal Reserve Bank of San Francisco President John Williams said the best time for the US central bank to raise rates again likely will be at its policy gathering in December.
Mr Williams still expects one rate increase this year, and said it could happen at either of the two remaining rate-setting Federal Open Market Committee meetings in 2016.
Dow Jones
6.30am:VW buyback deal approved
Volkswagen received final court approval for a $US14.7 billion ($19.2bn) deal reached with consumers and government agencies that could get nearly half a million dirty diesel vehicles off US roads.
The deal offers drivers of 475,000 Volkswagen diesel-powered vehicles with 2-liter engines the option of selling back their cars to Volkswagen or waiting for a government-approved fix that would allow the cars to stay on the road. The deal, which sets aside up to $US10.033 billion for consumers, also offers additional cash payments of between $US5,100 and $US10,000 per person.
Volkswagen said last year that it equipped diesel-powered cars with devices meant to trick emissions tests, allowing the cars to spew higher-than-legal levels of pollutants.
Dow Jones
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