The Australian share market is expected to open lower this morning after US stocks fell overnight, as investors ditched energy shares due to ongoing concerns about BP's ability to survive the Gulf oil spill.
In the latest economic news out of the US, the Federal Reserve's "Beige Book," a reading on activity in the nation's 12 economic districts, showed that economic activity continued to improve in May, though many districts reported only modest growth.
And a report from the Commerce Department showed that wholesale inventories rose 0.4% in April, that’s below analysts' expectations of a 0.5% increase.
The Dow Jones Industrial Average fell 41 points to close at 9,899 overnight. The S&P 500 Index is down 6 points at 1,056 and the NASDAQ lost 12 points to 2,159.
European stocks were higher; London’s FTSE rose 58 points, Paris gained 66 and Frankfurt is up 116.
Asian markets were mixed yesterday. Hong Kong’s Hang Seng rose 134 points, Tokyo’s Nikkei fell 99 and China’s Shanghai Composite added 70.
The Australian share market posted a second day of gains yesterday after Reserve Bank Governor Glenn Stevens said that consumers had become more frugal with their spending. The S&P/ASX 200 Index added 4 points to 4,385 and on the futures market the SPI200 is down 11 points. Turning to currencies and the Aussie Dollar at 7:30AM was buying 82.92 US cents, 57.04 Pence Sterling, 75.74 Yen and 69.19 Euro cents.
In local economic news coming out today: ABS labour force data for May.MI survey of consumer inflationary expectations, and;Westpac/MI survey of consumer unemployment expectations.
In company news around this morning:
Shares in Fortescue Metals (ASX:FMG) closed 0.26% lower to $3.91 yesterday. Andrew ‘Twiggy’ Forrest has slammed consultation over the mining tax as a "charade" as he prepares for a private meeting with the Prime Minister Kevin Rudd today. Mr Forrest has been a vocal opponent of the proposed mining super profits tax as Mr Rudd and senior ministers tour Perth in a bid to sell the tax through promises of further infrastructure spending in Western Australia. However the Fortescue Metals chief executive has held out little hope of success from today's meeting, he’s told ABC Television that the consultation is a charade as the government is showing no signs of budging on the tax. Fortescue Metals achieved a net profit of $626 million in the year to June 30 2009.
Shares in Woolworths (ASX:WOW) closed 1.3% higher to $27.22 yesterday. The National Association of Retail Grocers says not doing enough is being done to stop Woolworths and Coles from dominating the Australian grocery market. The Financial Review reports that the Association’s Ken Henrick told a Senate economics committee the two companies are crushing smaller retailers by flooding the markets with new stores and that the Australian Competition and Consumer Commission must do more to stop it happening. However ACCC Chairman Graeme Samuel has accused the independent group of being backed by vested interest Metcash. Last month, the Federal Government introduced a trade practices bill to let the ACCC examine the impact of competition on local markets. Woolworths posted a net profit of just over $1.8 billion last financial year.
Checking ex-dividends, just the one company going ex-dividend today and that’s HGL with a 6 cent fully franked dividend.
To commodities, and the price of gold slumped $15.50 to US$1,228.50 an ounce for the June contract on Comex. Silver is down 29 cents at US$18.18 and copper is up 7 cents to US$2.84 a pound.
And the price of oil gained $2.39 to US$74.38 a barrel for July light crude in New York.
