The Australian share market is expected to open a little higher this morning, as the weekend saw a rise in resource stocks and investors digested news from world leaders at the G20 meeting in Canada.
On Friday, US stocks closed mixed after details of a major financial reform bill were announced. One of the most significant aspects includes a ban on proprietary trading. A final vote is yet to be held.
In US economic news: new home sales hit a record low in May, dropping 32.7% to a seasonally adjusted annual rate of 300,000 last month.
The US economy grew at a slower pace in the first three months of this year than expected. Gross domestic product rose to an annual rate of 2.7% in the first quarter, down from a 3% increase in the fourth quarter.
And on the jobs front, employers added 431,000 jobs in May, up from an increase of 290,000 jobs in April. It was the biggest gain in jobs since March 2000.
The Dow Jones Industrial Average eased 9 points at 10,144. The S&P 500 Index added 3 points 1,077 and the NASDAQ rose 6 points at 2,223.
European stocks closed lower; London’s FTSE lost 54 points, Paris is down 36 and Frankfurt fell 45.
Asian markets were lower: Hong Kong’s Hang Seng is down 43, Tokyo’s Nikkei fell 191 and China’s Shanghai Composite lost 14 points.
The Australian share market closed lower at the end of last week. The S&P/ASX 200 Index dropped 67 points at 4,413 and on the futures market the SPI200’s down 3 points. Turning to currencies and the Aussie Dollar at 7:25AM was buying 87.49 US cents, 58.09 Pence Sterling, 78.13 Yen and 70.73 Euro cents.
In business news: Shares in Fortescue Metals Group (ASX:FMG) closed 3.96% lower on Friday to $4.36. Fortescue Metals Group chief Andrew Forrest says he can now see miners reaching a deal with the Federal Government over the proposed resources super-profits tax *(RSPT). Mr Forrest has been one of the most public critics of the tax. He’s told Sky Business that there were now enough smart minds around to reach an agreement over the tax. The unpopularity of the tax, which was forecast to raise $12 billion in its first two years and help bring Australia back to surplus, is seen as one of the key reasons that Julia Gillard was able to topple Kevin Rudd as prime minister and seize Labor's leadership. Ms Gillard has since said that she is keen to negotiate on the details of the tax. In the year to June 30 2009, Fortescue Metals achieved a $626 million net profit.
Shares in Virgin Blue (ASX:VBA) closed steady on Friday at 30.5 cents. Virgin Blue’s new chief executive, John Borghetti, has wasted no time in moving to change the airline’s marketing strategy in an effort to target more to business travellers. It’s understood that about six advertising agencies have been briefed on the work and are expected to pitch their ideas to Virgin over the next month. The Sydney agency, Three Drunk Money’s has not been asked to pitch following the ads it created for Virgin Blue’s V-Australia last year. The overhaul the airline’s troubled marketing strategy, will see a review of the creative content of its $50 million advertising account with the focus to be on business travellers rather than the traditional leisure travel market. Virgin Blue posted a $160 million loss in the 2009 financial year.
To companies going ex-dividend, tomorrow Aberdeen Leaders is going and on Friday Programmed Maintenance Services.
To commodities, and the price of gold rose $10.30 to US$1,255.80 an ounce for the June contract on Comex. Silver is up 37 cents to US$19.10 and copper is 9 cents higher at $3.09 a pound.
And the price of oil gained $2.35 to US$78.86 a barrel for August light crude in New York.
