BusinessNow: Live coverage of financial markets and companies, plus analysis and opinion

CBA’s outperformance against its chief rivals is set to come to a swift end, Morgan Stanley says.

The market was tipped for a modest start today.

• Harvey Norman hits post-GFC high
• Time to dump CBA for ANZ?
• Beware the Vic recession risk
• Miner slump leaves market scrambling
• Harvey Norman sees profit jump 30%
• Aussie dollar under pressure

Welcome to the BusinessNow blog for Wednesday, August 31. The market hit a six-week low, Harvey Norman is riding the property boom, and Apple is facing a mammoth tax bill in Ireland.

8.14pm: Ship owners eye autonomous sailing

“All hands on deck” may become a thing of the past.

Ship designers, their operators and regulators are gearing up for a future in which cargo vessels sail the oceans with minimal or even no crew. Advances in automation and ample bandwidth even far offshore could herald the biggest change in shipping since diesel engines replaced steam.

Ship operators believe more automation will enable them to optimise ship use, including cutting fuel consumption. “The benefit of automation is as an enabler of further efficiency across the 630 vessels we operate,” said Palle Laursen, head of Maersk Line Ship Management, a unit of cargo-ship giant A.P. Moeller-Maersk A/S.

British engine maker Rolls-Royce Holdings PLC is leading the Advanced Autonomous Waterborne Applications initiative involving other companies and universities. It foresees technologies long used to improve commercial airline operations migrating to ships. The group also is tapping know-how from those working on driverless cars to adapt for safe at-sea autonomous operations. Read more.

7.33pm: Excuses flow from reporting dawdlers

This week’s soft parade of corporate reporting laggards on Wednesday transformed into a stampede, with the underperformers seeking the safety of numbers to reveal dismal numbers amid “dog ate my homework” excuses, Tim Boreham writes.

Under ASX rules, the 1212 companies with a June 30 balance date have until the opening of trade today to file, or else face suspension.

As of noon on Wednesday, 249 companies were unaccounted and by close of trade this number had shrunk to 160.

The ASX will process disclosures overnight, with a shame list of no-shows lodged by 10am on Thursday. Only five stocks were suspended for not doing so last year, compared with two in 2014 and five in 2013. Read more.

7.05pm:British house prices defy Brexit fears

UK house-price growth picked up slightly in August, a British lender’s data showed on Wednesday, defying earlier signs that the housing market may be cooling after the country’s decision to leave the European Union.

Prices rose by 0.6 per cent in August compared with the previous month, Nationwide Building Society said, a slight increase from July’s monthly growth rate. Dow Jones.

6.19pm:Fed ‘not as accommodative as it seems’

The low natural rate of interest means monetary policy isn’t as accommodative as it seems, said Charles Evans, president of the Federal Reserve Bank of Chicago, in prepared remarks on Wednesday.

“Current monetary policy is not as accommodative as it might seem by historical standards,” said Mr Evans at a talk in Beijing. The natural interest rate, which is the underlying rate not directly observed by economists that keeps the labour market at full employment and inflation steady, has been hovering around zero, according to many economists, due to weak business investment and low productivity growth. Dow Jones.

6.02pm:Canada to join China-led AIIB

Canada is to apply to join the China-backed Asian Infrastructure Investment Bank (AIIB), Ottawa’s finance department said Wednesday, in a coup for Beijing after Washington previously tried to dissuade its allies from signing up.

“Canada is always looking for ways to create hope and opportunity for our middle class as well as for people around the world,” finance minister Bill Morneau said in a statement issued in Beijing. “Membership in the AIIB is an opportunity to do just that.”

AFP

5.18pm: Dollar close to US75c

The Australian dollar is close to falling below 75 US cents for the first time in four weeks as the US dollar strengthens on growing expectations of a US rate hike.

At 5.45pm AEST on Wednesday, the local unit was trading at US75.04 cents, down from US75.57 cents on Tuesday, and close to its lowest level since August 2. The US dollar has rallied as investors and traders anticipate the US Federal Reserve will lift the benchmark interest rate in September, Commonwealth Bank chief currency strategist Richard Grace said. AAP

4.56pm:A twist around BHP’s potash persistence

Andrew Mackenzie will be an interested observer after Potash Corp and Agrium Inc announced on Tuesday they were in preliminary talks about a merger that could bring together two of the global top five potash producers,writes Stephen Bartholomeusz.

Mackenzie, of course, has been persevering with BHP Billiton’s Jansen potash project in Canada and the preliminary investment of $US3.8 billion the group has committed to sink two massive shafts and build some above-ground infrastructure, albeit at a rate that keeps reducing. An actual go-ahead for Jansen could add another $US8bn to $US10bn to the bill. Read more.

4.20pm:Stocks close sharply lower

The Australian sharemarket has ended deep in the red as a rare double upgrade in the rating of ANZ failed to offset weakness in the resources sector,Daniel Palmer writes.

At the closing bell, the benchmark S & P/ASX 200 index gave back 44.4 points, or 0.81 per cent, to 5,433.9, while the broader All Ordinaries index dipped 44.1 points, or 0.79 per cent, to 5,529.4.

It represented the weakest close for the local bourse since July 15. Read more.

4.10pm:Harvey Norman hits post-GFC high

Today’s numbers from Harvey Norman have seen the stock climb to a post-GFC high as a better-than-expected profit and dividend give investors plenty to cheer.

Today’s numbers from Harvey Norman have seen the stock climb to a post-GFC high.

Macquarie says the result is “likely to drive upgrades to consensus on the back of the strong start to fiscal 2017 and new store expansions”.

Analysts kept a neutral rating on the stock but applauded the company’s return to store-expansion mode.

“A couple of years of strong results have given Harvey Norman the courage to return to store expansion after a number of years of pulling in capacity. Two stores to be opened in Australia and five internationally,” Macquarie noted.

With around half an hour remaining in the day’s trade Harvey Norman shares were 3 per cent higher at $5.40, 18c below the intraday high.

The broader S & P/ASX 200 was down 0.7 per cent for the day at 5438.2 points.

3.53pm:Stockland chairman to retire

Shopping centre owner Stockland says chairman Graham Bradley will retire at the annual general meeting in October, after serving in the position for 11 years. He will be replaced by former Woolworths chief financial officer Tom Pockett, who joined the board in September 2014.
AAP

3.32pm:Ord Minnett upgrades mining; trims health

Ord Minnett has upgraded its sector weighting on Australian mining to Neutral vs Underweight, while upgrading the consumer discretionary sector to Overweight vs Equalweight.

At the same time it has trimmed the weighting of financials and healthcare stocks in the model portfolio as a result of headwinds evident in the earnings season.

Overall, it says earnings season has been a disappointment, with only 24 per cent of the S & P/ASX 200 index beating expectations for FY16, while FY17 earnings projections have slipped 1.3 per cent. The broker retains a 5,500 year end target for the S & P/ASX 200 index.

3.15pm:Time to dump CBA for ANZ?

Commonwealth Bank’s outperformance against its chief rivals is set to come to a swift end, Morgan Stanley analysts have concluded in a note that has caused a stir on markets today.

Morgan Stanley has upgraded ANZ from ‘underweight’ to ‘overweight’

CBA, long the market darling, is now Morgan Stanley’s least preferred of the big four after a rating cut from ‘equal-weight’ to ‘underweight’, while rival ANZ is trending in the opposite direction with an unusual double upgrade from ‘underweight’ to ‘overweight’.

The actions had an immediate impact on the fate of the two behemoths on the local bourse, with ANZ surging 1.6 per cent against a weak market and CBA tumbling 1.4 per cent to serve as the clear laggard in the sector.

Analysts, headed by Richard Wiles, said the recent quarterly updates from the big four suggested CBA had lost its long-term edge over its competitors, meaning its premium valuation was “difficult to justify”.
Daniel Palmer
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2.51pm:Best results since GFC: Gerry Harvey

Harvey Norman founder and chairman Gerry Harvey has tagged the retailer’s full-year result as “outstanding”, as franchisee sales growth came in at double the rate of the prior year.

“Franchisee sales growth remains strong in the home and lifestyle market, underpinned by a resilient residential property market,” he said.

“These are some of the best results we have seen since the GFC, if you look at where we were a few years ago, just before the GFC we were really powering along, and then we hit some really bad times — all the things that happened in Ireland that knocked the shit out of us,’’ Mr Harvey told The Australian.

Daniel Palmer, Eli Greenblat
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2.24pm:QANTM surges on debut

Intellectual property law firm QANTM has received a warm welcome from investors on its first day of trade, rising as much 13.5 per cent in afternoon deals.

The group, which houses IP services firms Davies Collison Cave and FPA Patent Attorneys, raised $146.7 million through its IPO, which delivered a valuation of $295.1m.

2.16pm:Woolies no ‘legal authority’ to sell Masters

US hardware giant Lowe’s claims Woolworths is negotiating the liquidation of the companies’ Masters joint venture without legal authority.

Lowe’s claims Woolworths is liquidating Masters without legal authority.

Lowe’s has applied to have an independent liquidator appointed to Hydrox Holdings, the joint venture company running the soon-to-close Masters hardware stores in Australia.

Noel Hutley QC, for Lowe’s subsidiary WDR Delaware Corp, told the Federal Court in Sydney today that Woolworths is selling off the joint venture without proper legal authority.
AAP
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1.40pm:Banks must do better

Bill Shorten’s call for a banking royal commission may not see the light of day, but he has sparked a string of initiatives from the Federal Government which in total may well achieve far more than a superfluous inquiry ever would.

The latest was unveiled today, giving Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, the role of looking into how banks treat some small businesses and what value, if any, is the Government artillery against the banks.

Carnell’s role was only established back in March but already, with the help of ASIC and others, it is looming as being a key change agent in getting the banks to actually look after their customers.

1.23pm:Beware the Vic recession risk

While apartment approvals in NSW are booming, the Victorian government has taken a carefully planned set of steps to slash future apartment approvals to token levels.

As Robert Gottliebsen reports, Victoria has been erecting many more apartments than NSW and all the other states, so this will deliver a severe blow to employment in the state and, in many ways, is a bigger threat to the construction unions than the proposed Commonwealth ABCC legislation.

Given Melbourne has a similar population to Sydney, the Victorian government’s decision to slash apartment building will not only create a Victorian recession but also increase the risk of the nation going into recession within 18 months, as the current pipeline of Victorian apartment projects are completed. NSW cannot carry the whole nation.
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1.10pm:Just CFO ‘deeply involved’ in firm

The former chief financial officer of Solomon Lew’s Just Group, Nicole Peck, was “deeply involved” in budgeting and built up an intimate knowledge of the business during her five months at the company, a court has heard.

Just Group director Terry McCartney, who also sits on the board of the company’s ASX-listed parent, Premier Investments (PMV), told the Victorian Supreme Court Ms Peck was deeply involved in planning the company’s online business.

He was giving evidence this morning on the second day of trial in a case where Just is trying to stop Ms Peck defecting from rival retailer Cotton On, owned by the Austin and Hardwick families.
Ben Butler
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12.53pm:Atlas shares spike

The market has cheered the junior miner’s narrowed loss, sending its share price 15 per cent higher, to 1.2c, at 12.50pm (AEST).

12.16pm:Emeco widens FY loss

Troubled mining services group Emeco Holdings has widened its loss through fiscal 2016 and warned investment in the resources sector had yet to show signs of recovery.

The group (EHL) said its net loss stretched out to $225.4m for the year to June 30, a reading 76.5 per cent below the prior year.

Emeco’s underlying loss improved a modest 4.6 per cent to $90.5m while continued cost-cutting from miners pushed revenues down 14.4 per cent to $206.6m.
Daniel Palmer
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12.05pm:Estia founder quits

Estia Health’s founder Peter Arvanitis has quit the struggling company as investors continue to punish the aged care provider on concerns around its future performance.

Shares in the company have plummeted this week after the company’s annual results revealed it had missed its guidance. The Australian-listed stock continued to be hit today and is down more than 3 per cent at $3.37.

Estia told the market today that Mr Arvanitis had resigned as a director of the company.

“As one of the founders of the business, Peter has been a valued member of the Estia board since our inception as a public company,” Estia chairman Pat Grier said.

“He leaves the board to pursue his philanthropic and other business interests with our best wishes.”
Sarah-Jane Tasker
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11.50am:Explainer: The EU’s ruling on Ireland, Apple

Understanding the ins and outs of the European Commission’s finding against Ireland’s taxation of Apple and its longer-term consequences isn’t easy. But it could light a fuse on already tense economic relations in Europe, with a fight between the US and EU also on the cards.

Here are 10 points on the ruling and the potential consequences.

11.29am:Wellard dumps dividend

Battered livestock exporter Wellard has aborted plans to offer investors a dividend after a tumultuous beginning to life on the ASX that involved two significant downgrades from its prospectus forecast.

Wellard CEO Mauro Balzarini.

The group (WLD) also announced the sudden departure of a board member and its group secretary today, with no replacements currently in the pipeline.

For the year to June 30, Wellard logged a pro forma net profit of $14.8 million, in line with the latest guidance issued a fortnight ago for earnings between $14m and $15m.

The result was, however, markedly below the $46.4m expectation detailed in its prospectus ahead of a December debut on the local bourse.

11.10am:Miner slump leaves market scrambling

Australia’s mining giants are a brick around the neck of the local market today, with huge falls from BHP Billiton and Rio Tinto leaving market-watchers baffled as they tumble much further than expected.

BHP is currently trading around 2 per cent below what its ADRs suggested and without a fresh read on iron ore price futures there are some heads being scratched today.

The market seems to be pricing in a sizeable fall in iron ore, which last traded 0.3 per cent higher at $US59.31.

At just before 11am AEST Rio Tinto was down 2.1 per cent, Fortescue had given up 2.8 per cent and BHP Billiton was 2.6 per cent lower than yesterday’s close at $20.57.

The broader S & P/ASX 200 was 0.7 per cent weaker at 5439 points — a fresh six-week low and on track for its biggest fall in four weeks.

CBA is doing some damage too, with a 1.2 per cent fall and Westpac has lost 0.9 per cent, while NAB and ANZ are up 0.2 per cent and 0.7 per cent respectively.

11.05am:Morgan Stanley cuts CBA, raises ANZ

Morgan Stanley has cut CBA to ‘underweight’ vs ‘equalweight’, while upgrading ANZ to ‘overweight’ vs ‘underweight’.

Morgan Stanley’s Richard Wiles says a falling return on equity makes CBA vulnerable to an ongoing debating of its PE multiple.

Additionally, it sees slowing momentum in retail banking, dilution from the corporate banking growth strategy, limited margin for error on loan losses and a potential $7bn capital build.

In the case of ANZ, Mr Wiles thinks the new institutional bank strategy can work, the risk of a capital raising has receded, the dividend outlook is better than that of the other majors and the two-year EPS downgrade cycle is ending. Price targets have been revised to $68 vs $72.50 and $28.50 vs $23.90 respectively. CBA was last down 1.2 per cent at $72.01, while ANZ was 0.8 per cent higher at $26.75.

10.52am:Stocks hit six-week low

Australia’s S & P/ASX 200 share index has fallen 0.7 per cent to a fresh six-week low of 5435.6. The broadbased falls were led by materials and energy after crude oil hit a two-week low of $US45.75 before an expected rise in US crude oil inventories data.

BHP is down 2.8 per cent at $20.54, well below its ADR’s equivalent price of $20.94, and Rio Tinto is down 2 per cent.

Independence Group is down 6 per cent and Adelaide Brighton is down 3.8 per cent after their results.

10.45am:Harvey Norman sees profit jump 30%

Retailer Harvey Norman has reported a 30 per cent jump in earnings, outstripping market expectations as strength in the property market raised demand for whitegoods and home appliances.

Gerry Harvey has reported a 30 per cent jump in earnings for the year.

Harvey Norman booked net profit of $348.6m for the year to June 30, a 30 per cent boost on fiscal 2015 as franchisee sales grew 7.6 per cent to $5.33bn.

The record reading topped market forecasts for earnings of $323.5m.

The news helped drive a 2.3 per cent jump in the company’s share price to $5.36 at 11am (AEST).

Daniel Palmer
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10.30am:Miners drag sharemarket lower

The Australian sharemarket has weakened in morning trade as traders spurned mining stocks after commodity prices were weighed by US dollar strength overnight.

At the 10.15am (AEST) official market open, the benchmark S & P/ASX 200 index slid 20.8 points, or 0.38 per cent, to 5,457.5, while the broader All Ordinaries index gave back 20.7 points, or 0.37 per cent, to 5,552.8.

The big banks were largely unable to continue their rally for a second day, with ANZ the exception as it surged 1 per cent on an upgrade from Morgan Stanley analysts.

The laggard was Commonwealth Bank, which slumped 1.1 per cent on a Morgan Stanley cut, while NAB traded flat and Westpac retreated 0.7 per cent.

The resources sector was hurt by a stumble in crude, precious and base metal prices, with few spared the wrath of investors.

Miner BHP skidded 2.5 per cent to $20.585, while Fortescue backtracked 2.9 per cent to $4.935 and Rio Tinto lost 1.8 per cent to $48.01.
Daniel Palmer

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10.15am:Aussie dollar looks weak in the short term

The Australian dollar is testing support from the 100-day moving average at US74.97c after falling below support from its 50-day moving average and the uptrend line from May 30.

It’s broadly range trading within 0.6827 and 0.7835 and not yet oversold on daily RSI, so it may break the 100-day moving average this week even if economic data from China and the US meet expectations.

Potentially strong support from the 200-day moving average and the uptrend line from the January low are currently located at 0.7383. Short-term resistance is located at former minor support in the low 0.7580s.

While the 200-day moving average is rising, this month’s rejection from the weekly downtrend line running April 2013 — at 0.7756 — was a bearish sign for the short term. However, if it reacts positively to the uptrend line and 200-day moving average near 0.7400, it would seem that AUD/USD is broadly consolidating in a symmetrical triangle pattern with a mid-point around 0.7550. AUD/USD last 0.7515.

10.05am:Aussie dollar dips ahead of US jobs data

The Aussie dollar continues to fall as traders eye Friday’s US jobs data, which could make or break the case for a US interest rate hike at the next FOMC meeting on September 21. China manufacturing data on Thursday could also impact AUD/USD via commodity prices.

Last night it was stronger-than-expected US consumer confidence data that indirectly weighed on the Aussie dollar by strengthening the US dollar.

With the US dollar index rising 0.5 per cent, AUD/USD fell 0.8 per cent to a four-week low of US75.01c, underperforming versus most currencies as WTI crude hit a two-week low of $US45.75. AUD/USD was last at 0.7521.

9.55am:Why are so many CEOs getting bonuses?

A report for the Australian Council of Superannuation Investors has found that 93 per cent of the top 100 listed companies paid bonuses to the CEO in 2015, with the median bonus at 76 per cent of the target amount.

ACSI chief executive Louise Davidson noted that bonus payments were strikingly persistent at a time when average CEO pay was falling.

“This begs the question — are bonuses really just fixed pay dressed up as at-risk pay?”
Andrew White
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9.34am:Atlas Iron narrows FY loss

Atlas Iron has narrowed its full-year loss despite admitting it is continuing to struggle in the soft iron ore price environment.

In the 12 months to June 30, Atlas (AGO) declared a loss of $159m, an improvement from the prior year’s $1.38bn loss, due largely to fewer writedowns.

The result came alongside a 9 per cent lift in revenue to $786m, although lower commodity prices meant it didn’t fully capture the benefits of a 19 per cent rise in production.
Daniel Palmer
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9.25am:Adelaide Brighton eyes lower profit

Building materials supplier Adelaide Brighton said its annual net profit is likely to fall as it doesn’t expect to make as much from property deals this year, but management offered an otherwise bullish outlook with price rises looming for several key products.

Adelaide Brighton (ABC) said it expects net profit for the year through December of between $190m and $200m. At the top end of the range that would represent a 3.8 per cent decline on the $207.9m reported for the 2015 financial year.

The company said it expected property transactions to contribute $7m to its annual net profit this year, down from nearly $35m in 2015.
Dow Jones
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9.10am:Woolies, Lowe’s face off

Former hardware partners turned adversaries US retail giant Lowe’s and Woolworths will face off in court this morning as they bicker over the corpse of their failed hardware chain, Masters, and an ­attempt to wind it up.

Woolworths and Lowe’s are due in court today as they fight over Masters. PICTURE: BRENDAN RADKE

It is expected counsel for Lowe’s will provide detail before judge Lindsay Foster in the Federal Court relating to accusations about Woolworths trying to ram through the winding up of Masters contrary to the advice of internal lawyers and against the interests of minority shareholder Lowe’s.

A glimpse of Lowe’s case over the planned $1.5 billion Masters fire sale was presented in the court on Monday by lawyers ­acting for Lowe’s, who argued Woolworths “dumped” thousands of pages of documents on Lowe’s less than 24 hours before a key board meeting.
Eli Greenblat
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9.00am:Apple, Ireland to fight tax bill

The EU’s antitrust regulator has demanded that Ireland recoup roughly €13bn ($A19.15bn) of unpaid taxes over a decade from Apple, a move that could intensify a feud between the EU and the US over the bloc’s tax probes into American companies.

Apple CEO Tim Cook says Apple pays all the taxes it owes.

The decision — which ordered a payment well above most analysts’ expectations — is likely to be the subject of years of appeals up to the EU’s top court. It could also set off a broader scramble by the US and individual EU governments over the right to tax billions of dollars of offshore profits made by Apple and other large companies.

Apple disputed the reasoning of the decision and said it would appeal. Chief Executive Tim Cook, in an open letter, added: “Apple follows the law and we pay all the taxes we owe.”

Irish Finance Minister Michael Noonan said he disagreed “profoundly” with the European Commission’s decision and that Ireland would appeal the decision in order “to defend the integrity of our tax system.”
Dow Jones
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8.49am:Broker rating changes

CBA cut to Underweight vs Equalweight — Morgan Stanley
ANZ raised to Overweight vs Equalweight — Morgan Stanley
Amcor raised to Hold vs Sell — Morning star
Flexigroup cut to Hold vs Buy — Morning star
Macquarie Atlas cut to Neutral vs Outperform — Credit Suisse
Macquarie Atlas cut to Neutral vs Outperform — Macquarie
Ramsay Health raised to Neutral vs Underperform — Macquarie

8.32am:‘Tough day’ ahead for stocks

Aussie stocks are looking down the barrel of a “tough day”, despite the futures pointing to a modest 0.1 per cent gain.

“The ASX looks like it will be in for a tough day after a poor lead from US markets and the weakening of commodity prices impacting the materials and energy sector,” IG market analyst Angus Nicholson said.

The local market is tipped for a weak start today, following a poor lead from Wall Street (Photo by Don Arnold/Getty Images)

The oil price fell 1.3 per cent overnight ti $US46.35, hitting a two-week low, and is down another 0.6 per cent in early trade ahead of an expected increase in US stockpile numbers, while iron ore edged slightly higher.

“Conversely, the 1 per cent gain in the USD/JPY cross rate looks set to be met with encouragement in Japanese markets with the Nikkei setting up for a strong open.”

BHP Billiton is heading for a 0.7 per cent fall at the open, according to the miner’s ADRs, which pulls it back from yesterday’s 0.9 per cent gain.

It’ll be worth keeping an eye on the big banks today after Morgan Stanley cut its rating on CBA — the biggest stock on the Australian index by market cap — to ‘underweight’ from ‘equalweight’ and raised its rating on ANZ to ‘overweight’.

7.15am:Australian market set to open flat

The Australian sharemarket looks set to open flat following falls on Wall Street, which was weighed down by Apple after antitrust regulators ordered it pay about $19 billion in back taxes to Ireland.

At 6.45am (AEST) the share price index was up five points at 5,464. Locally, no major economic news is expected today.

In Australia, the market yesterday closed slightly higher as gains in health care, resource and banking stocks offset losses in Woolworths and Telstra. The benchmark S & P/ASX200 index was up 9.1 points, or 0.17 per cent, at 5,478.3 points.

The broader All Ordinaries index was up 12 points, or 0.22 per cent, at 5,573.5 points.

7.05am:S & P lifts iron ore forecast

The iron ore price has snapped its four-session losing streak as ratings agency Standard & Poor’s upgraded its forecast for the commodity and lifted its credit rating outlook for mining giant Rio Tinto.

Iron ore added 0.3 per cent to $US59.00 a tonne overnight, according to The Steel Index, from $US58.80 the previous day.

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7.00am:Dollar slides against greenback

The Australian dollar is lower this morning. At 6.35am (AEST), the local unit was trading at US75.07c, down from US75.57c yesterday.

6.50am:BHP boss loses bonus over dam

BHP Billiton’s board has scrapped chief executive Andrew Mackenzie’s bonus after a mining-dam failure in Brazil killed 19 people and contributed to the company’s worst annual loss ever, the company said.

The bonuses of other senior BHP executives also will be cut by varying amounts, said a spokesman for the world’s largest mining company by market value. The spokesman said Mr Mackenzie won’t be paid his short-term incentive bonus for the year ended June 30 but didn’t specify whether Mr Mackenzie’s other benefits such as his pension would be affected.

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6.40am:Wall Street slips as Fed in focus

US stocks edged lower overnight, as the dollar strengthened on expectations that the Federal Reserve was moving closer to raising interest rates.

The Dow Jones Industrial Average fell 49 points, or 0.3 per cent, to 18454. The S & P 500 declined 0.2 per cent, weighed down by utilities shares, which have benefited this year from expectations that rates will stay low. The Nasdaq Composite was off 0.2 per cent.

European shares closed mixed as investors considered whether the European Central Bank might have to step up its stimulus measurers in response to weak data.

The Australian share market is set for modest gains, with ASX futures up 7 points at 6.25am (AEST).

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