Following on from one of the most volatile weeks on record, the Australian share market looks set for a positive start to the week as we move further into reporting season. On Friday Wall Street finished higher as US stocks took a breather from a week of turbulent trade. European stocks also firmed on news regulators have banned short selling equities in France, Spain, Italy and Belgium in an effort to tame volatility.
US economic news
The Commerce Department reported that retail sales increased in line with expectations, up 0.5 per cent in July. It was the biggest gain in four months.
The Commerce Department also reported on business inventories, up 0.3 per cent in June, less than had been expected.
The University of Michigan's report on consumer sentiment also failed to meet expectations. The index dropped to 54.9 in August, the lowest level since 1980.
Figures
At the end of last week: The Dow Jones Industrial Average rose 126 points to close at 11,269, the S&P500 added 6 points to 1,179 and the NASDAQ gained 15 points to close at 2,508.
European stocks finished higher on Friday: London’s FTSE closed 157 stronger, Paris was up 124 and Frankfurt was up 200 points.
To Asian markets, stocks closed mixed: Hong Kong’s Hang Seng closed 25 higher, Tokyo Nikkei was down 18 and China’s Shanghai Composite lifted 12 points.
At the end of the last week the Australian share market finished the day and week higher: On Friday the S&P/ASX200 Index lifted 32 points, or 0.8 per cent, to close at 4,173. On the futures market the SPI is 41 points higher.
Turning to currencies and the Australian Dollar at 7:40AM was buying $1.0369 US cents, 63.67 Pence Sterling, 79.65 Yen and 72.69 Euro cents.
Economic news
Due out today from the Australian Bureau of Statistics: New motor vehicles sales figures for July.
Company news
On Friday shares in ANZ Banking Group (ASX:ANZ) closed 0.85 per cent lower at $19.92. ANZ has become the latest of the big four banks to cut rates on fixed-rate home loans. As the banks move to capitalise on declining wholesale funding costs, from this Wednesday ANZ will cut its three-year fixed-rate mortgage by 0.6 per cent to 6.44 per cent and offer reduced rates on one to five year loans. ANZ is also due to release a trading update at the end of this week. In the first half of its 2011 financial year, ANZ Banking Group recorded a net profit of $2.7 billion.
On Friday shares in Commonwealth Bank of Australia (ASX:CBA) eased 0.04 per cent to close at $48.56. Outgoing CEO Ralph Norris has cautioned that a US recession could hit China, and indeed Australia, as the US is the largest consumer of product out of China. Speaking to ABC TV Mr Norris said a potential recession in the US concerns him more than the European debt situation. Mr Norris also believes that any "substantial cuts" to interest rates in the short term appear unlikely. Last week CBA reported a record full year net profit of $6.4 billion.
Ex-dividends
Four companies are going ex-dividend today: Bradken with a $0.21 fully franked dividend, Commonwealth Bank with a fully franked dividend of $1.88, Hyperion Flagship Investments with an 88.24 per cent franked dividend of $0.043 and Merchant House International with a unfranked dividend of $0.005. Coming up tomorrow are Alumina and Computershare.
Commodities
Gold is down $15.00 to $US1,742 an ounce for the December contract on Comex, silver is up $0.45 to $39.11 for September and copper is down $0.01 at $4.01 a pound. Oil is down $0.34 at $85.38 a barrel for September light crude in New York.
