Australian Stock Market Report – Midday July 9, 2014

Recession in 2014? Why Experts are Predicting a Stock Market Crash in 2014 — Traders work at the Post that trades Ally Financial Inc. following the IPO on the floor of the New York Stock Exchange April 10, 2014. Reuters/Brendan McDermid

MID-SESSION REPORT
(12.10pm AEST)

The Australian sharemarket is losing ground for the third consecutive day, following the worst session in a fortnight for U.S. markets. The All Ordinaries Index (XAO) is down 0.9 per cent; the biggest daily slide in over a week.

Australian consumers are more confident this month than they were in June according to a monthly measure of confidence out this morning. Consumer sentiment rose by 1.9 per cent; however slumped by close to 7 per cent in May following the Federal Budget. The retailers are significantly softer regardless. Travel agent Flight Centre (FLT) is one of the worst performers; down by 3 per cent while Harvey Norman (HVN) is down 1.3 per cent.

Gaming and entertainment company Crown (CWN) is down 0.8 per cent despite being granted a 99-year licence to operate a casino within its planned six-start complex from November 2019. As part of the agreement for the site, no poker machines will be permitted, only members and guests will be able to play while smoking will be allowed in certain areas. Crown will pay a $100 million licence fee to the NSW government within five days. The casino operator has also guaranteed that over the first 15 years of activity, the NSW government will receive at least $1 billion in gaming taxes. Despite recent share price weakness for CWN, its shares surged by 57 per cent last year and 31 per cent over 2012.

Commodity prices were mostly firmer overnight which is helping the Australian dollar but not the miners at lunch. The country's second largest listed business BHP Billiton (BHP) is down 0.9 per cent, Rio Tinto (RIO) is down 0.4 per cent and Fortescue Metals (FMG) is slumping by 1.9 per cent. Gold stocks are mostly firmer.

Education services provider Navitas (NVT) is down 32 per cent after losing a major contract with Macquarie University in Sydney. NVT has provided a pathway service for students from high school to university. Macquarie is expected to establish the service itself from 2016.

Offshore, Chinese business and consumer inflation numbers haven't surprised or moved the market this morning.

At lunch, 750.8m shares have changed hands worth $1.57 bn. 316 stocks are up, 454 are in the red and 294 are unchanged.

The Australian dollar is firmer at US94c, with stronger commodity prices helping our currency. Tonight's FOMC meeting minutes (the U.S. central bank) and tomorrow employment report in Australia will be important from a currency standpoint.