Trading Day: live markets coverage; ASX leaps to 7-week high; plus analysis and opinion
The ASX lifts as global growth receives a boost, while Bell Potter sees wide and bright horizons for a2 Milk investors.
Welcome to Trading Day for Wednesday, October 11.
Samantha Woodhill 4.40pm: ASX hits seven-week high
The local sharemarket has closed at a seven-week high after global growth prospects brightened, and as the Australian dollar strengthened.
The benchmark S & P/ASX200 ended up 33.992 points, or 0.59 per cent, at 5772.102 points. The broader All Ordinaries index was up 33.723 points, or 0.58 per cent, at 5840.80 points.
It followed a positive lead from Wall Street and an upgrade of the International Monetary Fund’s global economic growth forecasts.
Tim Officer of Shaw and Partners said the market was also boosted by the release of Westpac’s strong consumer sentiment data. He said there was “definitely a more positive mood on the market today on the back” of the results, which showed a 12-month high in consumer confidence.
“Overnight we did see some very supportive news flow coming out of the IMF with the positive upgrade to global growth helping the likes of the oil price and the copper price …. and just helping maybe to lift a bit of sentiment across the board as well,” Mr Officer said.
In financials, NAB gained 0.44 per cent to $31.77. Commonwealth Bank was unchanged at $76.35. Westpac rose 0.71 per cent to $32.64 and ANZ added 0.44 per cent to $29.90.
4.30pm: General Motors headache assembles
Mike Colias writes:
Despite its drastic downsizing a decade ago under a federally funded bailout and bankruptcy restructuring, General Motors again finds itself with too many US factories that can turn out too many vehicles.
But as GM considers how to trim the excess capacity, which saddles the company with higher fixed costs, it faces a tricky political factor: President Donald Trump’s insistence that carmakers assemble more vehicles in America and not in lower-cost plants elsewhere.
This year through August, GM built about 7 per cent more vehicles at its North American plants than rival Ford but used about one-third more assembly plants to do so, according WardsAuto.com — read more
The Wall Street Journal
4.15pm: Smaller lenders fill interest-only gap: ASIC
In the first stage of its targeted review into interest-only loans, ASIC has found borrowers are moving to non-major lenders for the riskier loan class as big banks cut down new issuance in compliance with APRA’s “unquestionably strong” requirements.
ASIC found mid-small tier and non-bank lenders have partially offset a $4.5bn decline in interest-only lending by major banks by moving in on surplus borrower demand.
The review also found borrowers who used brokers were more likely to obtain an interest-only loan compared to those who went directly to a lender, while those approaching retirement age continue to be provided with a significant number of interest-only owner-occupier loans.
Read: Chinese housing demand buoyant, writes Elizabeth Redman
Read: ‘Borrowers put before banks’, writes Michael Roddan
Read: Money laundering ‘a scourge’, writes Michael Roddan
Anthony Klan 3.55pm: NBN’s awkward school holidays
When the children of the Stewart family reached for their laptops and tablets over the past two weeks as they settled into their school holidays, they found themselves caught in a traffic jam on the information superhighway.
The Stewart family appears to have stumbled on to what is the latest problem to confront the nation’s biggest infrastructure project: when the tech-savvy members of the school-aged generation flock to the internet en masse, speeds appear to plummet.
Benjamin Stewart, an IT professional, had been closely monitoring his National Broadband Network connection in recent months because it was consistently delivering average speeds of about 60 per cent of the 100 megabytes a second download rate spruiked by Telstra offshoot Belong. Two weeks ago, his peak-time net connections started to slow more than usual, before last week bottoming out every afternoon and evening, delivering speeds as low as 1Mbps.
3.45pm: AMP Capital in equities revamp
AMP Capital has announced an overhaul of its Australian equities business to focus more on a lower-cost systematic, or computerised, investment strategy.
The equities business team, which manages $12 billion in Australian equities, will be restructured into equity income, small caps and systematic functions, in a move the company says is the latest step in “modernising” AMP’s equities capability.
The revamp at one of Australia’s biggest wealth managers follows a review, and was foreshadowed in The Australian today.
A number of key positions will be lost. Initially seven jobs will be lost from a 10-strong team, but there are plans to refill some positions — read more
AMP last up 1.6 per cent at $5.04
3.15pm: Three reasons to dream dairy: Bell Potter
Bell Potter sits back satisfied after a dive into the milk market, topping up its 12-month target price on a2 Milk by 40 per cent.
The stock has torn past Bell Potter’s previous target price of $5.51 year-to-date and eyes a $7.78 price range over the coming year, according to the broker’s forecast based on three key opportunities for Aussie dairy dreamers.
1. “Brand consolidation in China opening up a potential 4,000t market opportunity for A2M branded IMF products.”
2. “An acceleration in demand growth for adult nutrition products where we estimate A2M holds a fairly modest share of the Australian retail category at 5-6pc.”
3. “A formal launch of A2M branded products in the A$1.0Bn UK IMF market now that supply constraints have been addressed.”
Rising dairy prices have soured the analyst’s projection of a2 Milk’s infant milk formula (IMF) margins, but not to the extent that its spoiled their “buy” rating on the stock.
A2M last up 1.7pc at $7.03 after hitting an all-time high at $7.06 in early trade.
2.52pm: Macquarie turns bullish batteries
Investment bank Macquarie has gone anode and cathode crazy, upping price targets for key lithium ion battery components between 20-50pc.
Cobalt, nickel, copper and, of course, lithium prices are all set to rise according to Macquarie analysts, but timing is everything when weighing up competing forces of supply and demand.
“Our cobalt price forecasts rise ~30pc in FY18 and FY19 while our long-term price increases 58pc,” said the analysts, “nickel price upgrades are 5pc and 15pc for FY18 and FY19, +20pc for FY20 and beyond. Lithium prices rise ~30pc for FY18 and with a similar increase in our long-term price.”
Macquarie has also upgraded its FY21 and FY22 forecasts of cathode material copper, the commodity affectionately termed ‘Dr. Copper’ for its finger on the global economic pulse likely dealing with a supply shortfall up until that time, according to the analysts.
Exposed mid-tier mining stocks diverged yesterday when Macquarie’s rating changes hit the market. Additionally, analysts pitched preferred exposure in the large-cap end of material town: Rio Tinto over both BHP and hi-flyer South32 (S32).
“We continue to like FMG and NHC for pure play iron-ore and coal while our cautious view on ILU is also unchanged. OZL and MLX remain preferred pure play copper stocks.”
Stephen Bartholomeusz 2.45pm: Myer moves to defuse Solly Lew
Myer has bowed to the inevitable and clearly hopes to defuse some of the tension and avoid a damaging confrontation with its major shareholder, Solomon Lew’s Premier Investments, by replacing its chairman ahead of its planned schedule.
Last month, Myer announced the appointment of veteran company director Garry Hounsell as a non-executive director and deputy chair and outlined a plan for him to succeed Paul McClintock as chairman at some point beyond next month’s annual meeting. That timetable was designed to enable a transition and handover period for the outgoing and incoming chairs.
With Lew, supported by other major shareholders, threatening to do something at the AGM — Premier hasn’t made its intentions clear but did requisition a register of Myer’s shareholders, hinting at a campaign for their support — pressing ahead with the proposed orderly transition risked an unpleasant and disruptive, even destructive, experience for Myer, McClintock and, perhaps, Hounsell — read more
MYR last down 1.3 per cent $0.735
2.20pm: AMP Capital goes ‘systematic’
AMP Capital says the head of its Australian Equities business Michael Price will step down from the role after a period of transition as the asset manager splits its actively managed local equities arm into equity income, small caps and “systematic” teams.
The announcement comes after a report in The Australian this morning that AMP Capital was poised to sack the bulk of its active Australian equity managers as it caved to pressure on fees from index and computerised trading.
In a statement to the media released this afternoon, AMP said Genevieve Murray has been appointed lead of the new “systematic” initiative and the Head of Australian Equities and Systematic Co-Portfolio Manager title, bringing 21 years of experience “primarily in quantitative portfolio management/analysis and investment leadership roles.”
A number of the current members of the Australian Equities team will also leave their roles.
AMP last up 1.7 per cent at $5.05
1.45pm: Consumers ease debt strain concern: Westpac
Consumer confidence rose to a twelvemonth high in October according to Westapc Melbourne Institute’s latest monthly survey.
Its index of consumer sentiment rose 3.6 per cent to 101.4 from 97.9 in September, Westpac chief economist Bill Evans suggesting households may be looking past record levels of personal debt putting strain on household balance sheets.
“Consistent reports of an improving global economy may have been a factor behind this lift
in confidence,” said Mr. Evans.
“It is also likely that concerns about rising interest rates associated with over- heated housing markets have eased.”
The Australian dollar rose in the lead up to the data release as much as 0.4pc, but has since lost ground to a stronger greenback to trade 0.1pc higher at US77.82 cents — read more
Samantha Woodhill 12.51pm: Property still drenched in China capital
Chinese capital controls are not slowing the flow of Chinese money into the Australian housing market, according to a report by Credit Suisse.
Foreign buyers bought up 25 per cent of new housing in New South Wales by the close of the latest fiscal year, 90 per cent of whom were from China according to Credit Suisse estimates.
Chinese authorities introduced new controls to curb capital outflow in December last year, but since then Chinese national’s “demand for Aussie housing has increased”, the report said.
“We think the tailwind of Chinese wealth creation will continue to dominate for now,” it said.
“Local incomes are becoming less relevant in determining the outlook for house prices and regional wealth is becoming more relevant.”
In Victoria, foreign buyers make up 17 per cent of new housing and in Queensland, 8 per cent of new homes are being acquired by foreign buyers.
Sydney and Melbourne housing are at their most expensive valuations in two generations and rental yields in both cities are now below 3 per cent, according to the report.
Credit Suisse said while it does expect the housing market to moderate, it doesn’t forecast a collapse.
Michael Roddan 12.35pm: ‘Borrowers put before banks’
Westpac boss Brian Hartzer says the Reserve Bank is more worried about household budgets in the event of interest rate hikes than it is about a potential credit crunch in the banking system.
Appearing at the House of Representatives review of the major banks, Mr Hartzer said recent regulatory moves against interest-only loans were more about getting households out of debt than protecting banks from a sharp rise in defaults.
In March, the Australian Prudential Regulation Authority told lenders to restrict interest-only lending to 30 per cent of all new loans.
Eli Greenblat 12.17pm: Lew snubbed countless approaches: Myer
Outgoing Myer chairman Paul McClintock has delivered a spirited and passionate defence of his leadership of the board during its battle with major shareholder Solomon Lew and has revealed the billionaire businessman never agreed to meet with the chairman and Myer directors after being contacted countless times.
Mr McClintock said Myer had never invited a single large shareholder to meet with the board, with this unique offer only made to Mr Lew, and that the increasingly heated and colourful language used by Mr Lew as part of his recent spray against Myer was “theatre”, that he deserved some respect for his decades of proven accountability and professional behaviour in his corporate roles and previous work for governments.
Mr Lew’s Premier Investments is Myer’s largest shareholder with a 10.8 per cent stake.
“It seems to me this is theatre, and you guys, you journalists, have got to see through the theatre in see it for what it is and give it the credibility that you have … I have a whole raft of emails that I have written to Premier inviting them to talk to us, two separate invitations to come to speak to the board,’’ Mr McClintock told The Australian this morning — read more
MYR last $0.74
11.55am: ASX, dollar leaps on confidence boost
The local sharemarket posts decisive gains in morning trade, while the Australian dollar leaps higher on signs of renewed consumer confidence in October.
The S & P/ASX200 index trades 0.7 per cent higher at 5776 at a four-week high, while the local currency sits 0.3 per cent above its opening mark at US78.05 cents.
The two hold gains as hopes of a ramp-up in domestic consumption were given a tailwind by Westpac’s consumer survey showing a twelvemonth consumer confidence high at the outset of October, while Wall Street gave a firm lead overnight against a brighter backdrop for global growth courtesy of a new report from the International Monetary Fund.
The large-cap end of town trades in a sea of green as the top 15 ASX stocks by market capitalisation all post gains. Banks are strongest all 0.7 per cent higher bar CBA (+0.1pc) as the Big Four executives face the third Standing Senate Comittee on Economics hearing the industry, while Transurban legs up 1.5 per cent as the standout performers.
AMP Capital adds another 2 per cent on its 4 per cent surge yesterday as speculation mounts over the future of its active equity portfolio arm, while BlueScope share trade 1.1 per cent lower amid fresh commentary from today’s AGM.
11.30am: Austrac clears us ‘in writing’: Westapac
Westpac chief executive Brian Hartzer said the regulator Austrac has “in writing” cleared the lender of any noncompliance with anti-money laundering legislation that the Commonwealth Bank is alleged to have breached more than 53,000 times.
Speaking at the House of Representatives review of the major banks this morning, Mr Hartzer said money laundering was a “real scourge on society and a challenge for the whole economy”.
Reports have suggested that Westpac, along with most major lenders, has been targeted by criminal syndicates looking to launder money — read more
WBC last up 0.6 per cent at $32.61
Matt Chambers 10.32am: BlueScope demands energy policy order
BlueScope Steel chief executive Paul O’Malley says the nation cannot afford to focus on future possibilities like the Finkel recommendations, calling for a 10-year energy transition policy that addresses energy prices and reliability.
The comments appear to back recent signals from the Coalition that is unlikely to implement Chief Scientist Alan Finkel’s final recommendation of a Clean Energy Target.
The head of the nation’s biggest manufacturer, whose power costs are forecast to double over the next two years, told the company’s annual general meeting in Melbourne today that Australia needs baseload power to run its economy in an orderly way.
“Debating future coal or gas, hydro, nuclear or renewable energy supply, is fine — so long as there is a sensible transition over the next 10 years that secures our everyday life and living,” Mr O’Malley, who will step down from the CEO role in December — more to come.
BSL last up 0.8pc at $11.61
10.13am: Federal Court backs penalty rate decision
Melissa Iaria writes:
The Federal Court has backed the Fair Work Commission’s decision to slash Sunday penalty rates.
Unions representing hospitality and retail workers challenged the commission’s decision in June slash penalty rates for workers in the fast food, hospitality, retail and pharmacy sectors, starting on July 1.
On Wednesday, Justice Mordy Bromberg said the court found no jurisdictional error in the way the commission went about its task.
AAP
Samantha Woodhill 9.55am: Iron ore dips below $US60
Iron ore prices shed 4.1 per cent overnight, dropping below $US60 a tonne for the first time since June.
The spot price was today at $US59.10 a tonne.
It comes amid market concerns about steel mill closures, according to ANZ Australian Economics head David Plank.
“While this has resulted in strong raw material prices in the past, the market appears to be taking a ‘glass half empty’ approach this time,” he said.
Iron ore stockpiles at Chinese ports increased by 0.5 per cent last week according to Steelhome, up from the previous week’s 1.8 per cent gain. Mr Plank said the rising iron ore inventories may be the reason for the dramatic price drop — read more
9.46am: ASX200 to lift amid US corporate hopes
Australia’s S & P/ASX 200 share index is expected to rise slightly after the S & P 500 climbed 0.2pc to a fresh record high.
European markets fell slightly as lingering worries over the Catalan political crisis weighed on Spanish stocks.
But US gains were driven by Wal-Mart’s announcement of a $US20bn share buyback and optimism ahead of US corporate results to commence in the next Wall Street session overnight.
US small business optimism fell 2.3 points in September, led by broad falls in sales expectations according to NFIB
In commodity markets, IMF’s upward revisions to global growth forecasts helped lift WTI crude 2.7pc and LME copper by 1.4pc but spot iron ore fell 2.7pc.
BHP ADR’s in Australian dollars closed at $26.68, a 0.7pc premium to yesterday’s Sydney close.
Overall the gains on Wall Street may help maintain recent upward momentum in Australia’s underperforming share market.
Westpac’s Australian Consumer Sentiment index is due at 10.30am (AEDT) but is unlikely to be a driver of the share market.
On the charts a close above the 200-DMA at 5751.4 would be viewed positively.
Index last 5738.1
Glenda Korporaal 9.25am: China tourist numbers to soar
The number of Chinese tourists coming to Australia is expected to triple from a million a year last year to 3.3 million a year by 2026, according to a report to be released today by the Australia China Business Council.
The organisation says predictions from Tourism Australia show a much larger than projected surge in Chinese tourism to Australia as a result of the rapid growth of China’s middle class and other changes, including a new open-skies agreement between China and Australia.
The organisation says income from Chinese tourists is expected to jump by almost 50 per cent to $13 billion a year by 2020.
Adam Creighton 9.18am: ‘Seize the day’, says IMF
The International Monetary Fund has urged governments to “seize the moment” as the near decade-long economic hangover from the GFC starts to ease and the fund lifts its forecast for global growth, including for Australia’s biggest trading partners, China, Japan and the US.
Against a backdrop of rising optimism about global growth, the Washington-based institution pencilled in growth of 3.6 per cent and 3.7 per cent this year and next, respectively, above the 3.2 per cent witnessed last year, which had been the lowest since the global financial crisis intensified in 2008.
“The current global acceleration is also notable because it is broadbased: more so than at any time since the start of this decade,” chief IMF economist Maurice Obstfeld said overnight. “This breadth offers a global environment of opportunity for ambitious policies that will support growth and raise economic resilience in the future.”
9.10am: Bapcor pens $83.6m in divestments
Automotive goods and services retailer Bapcor has reached an agreement to sell three non-core business arms for $83.6 million (NZD$92m) and continues the divestment process of its remaining non-core business, New Zealand based TBS.
The deal involves the sale of its New Zealand footwear arm and both its North American and ex-North American Contract Resources businesses.
BAP last $5.20
9.03am: Constortium aborted AMP bid plan
Bridget Carter and Scott Murodoch write:
Private equity giant Kohlberg Kravis Roberts, China Life and Macquarie Group made plans for a three-way takeover bid for AMP earlier this year but opted not to proceed with an acquisition of the $14.5 billion listed financial company, according to sources.
DataRoom can reveal that the trio ran the ruler over the Australian wealth manager and insurer that has failed to fire in recent years and remains under pressure from its investors who are eager to see an improvement in its performance.
The company’s shares (AMP) were worth close to $22 in 2001 but closed yesterday at $4.96.
Read more from DataRoom
Matt Chambers 8.57am: Incitec plant jobs hinge on gas deal
The clock is ticking on Incitec Pivot’s “mission to save Gibson Island” and up to 1500 Queensland jobs, with the biggest domestic gas contract of recent times put to the market last month in an attempt to secure gas at prices the competition watchdog says should be on offer.
If relatively cheap gas cannot be locked in for a year’s time, it will spell closure for the 48-year-old Brisbane fertiliser plant, which directly employs 300 workers and contractors and supplies the state’s sorghum, cotton and sugarcane farmers.
Incitec has said up to 1500 direct and indirect jobs are at risk if the plant closes — read more
IPL last $3.66
8.52am: Myer chairman to step down
Myer has appointed Gary Hounsell as its new chairman effective at the conclusion of its annual general meeting on November 24 after Paul McClintock revealed his intention not to stand for re-election.
The company confirmed Mr. Hounsell’s succession to the ASX this morning after announcing plans for the move pending Mr. McClintock’s retirement alongside his appointment to the role of deputy chairman on September 19.
MYR last $0.74
Cliona O’Dowd 8.37am: BOQ home loan rows streak furthers
Bank of Queensland has topped the list as Australia’s worst offender for disputes with home loan customers, according to the financial ombudsman.
It is the fourth year in a row the bank has headed the list, with the number of disputes per 100,000 customers barely improving in the past two years, although the numbers have trended downward since 2014.
For every 100,000 home loan customers, BoQ was involved in 79 disputes during the year. Of those, 40 per cent were resolved by agreement, with 29 per cent in BoQ’s favour, according to the Financial Ombudsman Service — read more
BOQ last $12.92
8.30am: AMP turns back on active fund portfolio
One of Australia’s biggest wealth managers has caved in to inexorable pressure on fees from index and computerised trading in the nation’s lucrative $2.9 trillion funds management industry.
AMP Capital, the investment management arm of the listed AMP, is poised to sack the bulk of its active equities managers from its team of 11 as it moves to a strategy that includes a greater use of passive funds.
The bulk of the $29 billion in Australian equities AMP now manages will be rolled into lower-cost strategies including existing quantitative funds run by the remaining four members of the “quant group”.
Quant funds select securities based on quantitative analysis by computer models.
The repositioning of the business away from core Australian equities to lower-cost products that are enjoying long-term client demand follows a review by AMP Capital’s global chief investment officer of equities, David Allen, which is expected to be made public today — read more
AMP last $4.96
8.20am: Stocks to hitch on US corporate upswing
The Australian share market is expected to open higher after the major US stock indices hit record highs overnight.
At 7.00am (AEDT) on Wednesday, the share price futures index was up nine points, or 0.16 per cent, at 5727.
The US S & P 500 and the Dow Jones index were both up 0.23 per cent, getting a boost from retail giant Wal-Mart.
Shares in Wal-Mart jumped more than four per cent to a two-year high after it forecast that US online sales would rise by about 40 per cent in the next fiscal year Locally in economic news on Wednesday, Westpac releases its consumer confidence Index, and in equity news BlueScope Steel holds its annual general meeting. .The Australian share market was steady on Tuesday, as the energy sector weakened and AMP and poker machine maker Aristocrat Leisure were among the best performers.
The benchmark S & P/ASX200 dropped 1.2 points, or 0.02 per cent, to 5,738.1 points, while the broader All Ordinaries index gained two points, or 0.03 per cent, to 5,807.1 points.
On Wednesday morning, the Australian dollar was steady, after a positive US stock market and tensions over North Korea pulled it in opposite directions.
At 7.00am (AEDT) on Wednesday, the Australian dollar was worth 77.82 US cents, down slightly from 77.86 US cents on Tuesday.
8.10am: China fuels copper rise
Copper prices reached their highest level in four weeks on Tuesday as speculators kept buying in response to expectations of potential shortages in China.
China announced plans in July and August to curb waste imports, including scrap metal, but it was unclear how severe the restrictions would be on copper. “I think copper’s pricing in expectations of the Chinese restrictions on scrap imports, but to me the price looks a little high based on current fundamentals,” Colin Hamilton, director of commodities research at BMO Capital Markets, said. Benchmark copper on the London Metal Exchange closed up 1.4 per cent at $US6,760 a tonne, the highest since September. 11.
Reuters
7.08am: Dow ends at record high
US stocks finished slightly higher on Tuesday, but the Dow industrials recorded its 47th all-time peak of 2017, buoyed by gains in consumer-staples shares, highlighting optimism ahead of earnings season. The Dow Jones Industrial Average gained 0.3 per cent to 22,830 points, making this its eighth gain in the past 10 sessions. The S & P 500 ended the day 0.2 per cent higher at 2,551 points, while the Nasdaq Composite was up 0.1 per cent at 6,586. In individual stocks, Walmart was an outperformed after the retailer said it would continue to focus on its domestic stores and e-commerce during its investor day.
Dow Jones
7.05am: Dollar steady against greenback
The Australian dollar is steady against its US counterpart, as confidence by investors on Wall Street stays strong and the US dollar come under pressure because of sabre rattling by North Korea.
At 7.05am (AEDT) on Wednesday, the Australian dollar was worth US77.80 cents, down slightly from US77.86c on Tuesday.
All three US stocks indices hit record highs during trade on Tuesday, but BK Asset Management Managing Director of FX Strategy Boris Schlossberg said the US dollar fell early in the session.
“The US dollar was slightly weaker across the board today after reports that North Korea told Russia it possessed an intercontinental missile capable of travelling 3,000km which would put it within reach of US territory,” he said.
AAP
6.55am: P & G fends off Peltz in early vote
Initial voting results show Procter & Gamble successfully fending off an attempt by activist investor Nelson Peltz to capture a seat on its board, though he did not immediately concede, saying it was too close.
Shares in the consumer products giant are down following the vote at Procter & Gamble’s headquarters in Cincinnati on Tuesday.
“We are encouraged that shareholders recognise P & G is a profoundly different, much stronger, more profitable company than just a few years ago,” the company said.
Peltz’s Trian Fund Management, which owns about $3.5 billion in P & G shares, said moments after the vote that it would await certified results, which appeared to have been decided by a razor-thin margin.
AP
6.45am: Walmart eyes digital future
4Walmart is all about online, anticipating digital sales next fiscal year will rise about 40 per cent and that it will double the number of US kerbside locations for online grocery shoppers at its stores. But the world’s largest retailer continues to scale back new store growth in the US, with plans to open only 25 in its fiscal year 2019, which ends January 2019. That compares with opening 230 new US stores during fiscal 2016. The retail behemoth is predicting net sales growth at or above 3 per cent, driven by online sales and growth from existing stores for the next fiscal year. The company reiterated its per-share earnings guidance for next year and launched a two-year, $US20 billion share repurchase program.
Shares rose more than 5 per cent on the news “No doubt we are in a transformational period of history,” said Doug McMillon, CEO of Walmart Stores, in an address Tuesday to investors at an annual meeting in Bentonville, Arkansas. “Our future is looking more digital.”
AP
6.32am: Penalty rates case due for judgment
The Federal Court is due to hand down a judgment on Wednesday regarding cuts to Sunday penalty rates.
Unions representing hospitality and retail workers have challenged the Fair Work Commission’s decision in June to drop Sunday rates by five percentage points for workers in the fast food, hospitality, retail and pharmacy sectors, starting on July 1.
Hospitality union United Voice and the Shop, Distributive and Allied Employees’ Association launched the legal action against the Australian Hotels Association and the Australian Industry Group and others to keep workers’ penalty rates the same for Sundays and public holidays.
The court is expected to hand down a judgment in the matter at 9.30am on Wednesday.
AAP
6.28am: Spanish stocks slide, euro climbs
Madrid’s stock market fell Tuesday, while the euro rose versus the dollar, ahead of a speech by Catalonia’s leader in which he called for talks with Madrid over the region’s call from independence from Spain, a key eurozone economy.
Outside the eurozone, London’s benchmark FTSE 100 stocks index climbed 0.4 per cent as traders shrugged off news of a widening British trade deficit and slowing UK industrial growth against a background of Brexit uncertainty.
Germany’s DAX 30 edged 0.2 per cent lower to 12,949.25, while the French CAC 40 closed broadly flat.
AFP
6.23am: IMF hikes GDP forecasts
The IMF raised its 2017 economic forecast for the United States overnight but said the coming years would likely see sluggish gains in the absence of more growth-oriented policy from Washington.
Citing strong market confidence in the world’s largest economy, the International Monetary Fund said US GDP was now expected to grow by 2.2 per cent this year, a tenth of a percentage point higher than a forecast published in July.
The US economy will also likely expand by an even faster 2.3 per cent in 2018, up two tenths from July’s estimate, according to the global crisis lender.
The rosier figures, released with the latest update to the IMF’s semiannual World Economic Outlook, were lifted in part by a recovery in the US energy sector and growing consumer spending and business investments earlier in the year.
But the IMF said that — absent reforms and stimulus and with a Republican economic agenda suffering lengthy delays in Congress — the US was unlikely to sustain the faster pace of growth.
“Over a longer horizon, US growth is expected to moderate,” the report said, noting that the current estimates assumed no change in US fiscal policies.
Higher IMF growth estimates for the US published in April — with growth forecast to hit 2.5 per cent by 2018 — assumed Republican leaders in Washington would overhaul the US tax code.
And both an ageing work force and weak productivity growth will likely hold US economic growth potential around 1.8 per cent, according to the report.
AFP
Energy stocks rebound leads ASX higher
The local sharemarket extended gains in afternoon trade, driven by a sharp rebound in energy stocks and buoyant gold miners. Jobs data won't push RBA rate cut in May. BHP gains on steady March quarter. Woodside spikes on LNG deal, oil price.
Energy stocks weigh as ASX closes flat; Sigma’s $297m selloff
Sigma's billionaire director cashes in. Star shares down after roller-coaster start. Zip top gainer. BOQ lifts on profit beat. Asian markets red as Nvidia-led falls loom. China warns of US tariff pressures.