Australian Stock Market Report – Afternoon 1/15/14

EVENING REPORT
(5pm AEDT)

After three straight sessions of losses, the Australian sharemarket has managed to improve by 0.7 per cent. The All Ordinaries Index (XAO) was up by 0.14 per cent at its worst and 0.83 per cent higher at its best before settling 0.68 per cent firmer by the close.

The miners edged higher as a sector, with iron ore producer Fortescue Metals (FMG) rising by 3.5 per cent. FMG announced plans to repay another US$1.6 billion in debt mid-march to reduce its debt to US$7.8 billion. Its cash on hand at the end of 2013 was US$2.9 billion; ahead of previous estimates. The world's largest miner, BHP Billiton (BHP) wasn't as fortunate with its moves, falling below $36/share.

The major banks did much of the heavy lifting, with the big four contributing 8.4pts to the All Ordinaries' 35.7pt improvement today.

At the close, 1.6 billion shares were traded, worth $3.73 billion. 548 stocks are higher, 355 are lower and 382 are unchanged.

In Europe tonight, the monthly trade balance reading will be issued at 9pm (AEDT), with a $16.7 billion surplus expected for last month.

In the U.S., the latest manufacturing index, business inflation (producer prices), the Fed Beige Book and crude oil inventories are scheduled for release. The manufacturing reading for November covers conditions across New York. Core business inflation is up 1.3 per cent over the year.

The earnings season in the U.S. is picking up in activity, with Bank of America out with its quarterly profit results tonight. Current consensus is for a significant rise in both revenues and profits. Fourth quarter profit is likely to be around US$3 billion; revenues in the order of US$21.2 billion are expected. Last night, JP Morgan issued a fall in profit, partly hit by a rise in legal costs.

Looking further ahead, Goldman Sachs, American Express, Citigroup, Capital One, Intel, General Electric, SunTrust and Morgan Stanley will all be issuing quarterly profit results over the next three sessions.

In Australia, monthly job numbers will be issued tomorrow.

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