The Australian share market looks to gain this morning after US stocks climbed to six month highs. Positive US earnings and economic data boosted Wall Street. Investors were also encouraged by the International Monetary Fund’s plans to increase bailout funds. At home eyes will also be on local jobs figures out this morning and more quarterly production reports.
Economic news
The International Monetary Fund has announced plans to raise up to $US500 billion to meet $US1 trillion in financing needs.
The World Bank has lowered its forecast for global growth by the greatest amount in three years: After growing 2.7 per cent in 2011, the Washington-based institution forecasts global growth will be 2.5 per cent in 2012, down from its previous estimate of 3.6 per cent. Europe is expected to contract by 0.3 per cent in 2012, down from its previous estimate of expanding 1.8 per cent. America is expected to expand by 2.2 per cent in 2012, down from its previous estimate of 2.9 per cent. China is expected to expand 8.4 per cent this year, down from its previous estimate of 9.2 per cent.
US economic news
Confidence for US homebuilders increased at the beginning of this year to the strongest point in more than four years. The National Association of Home Builders/Wells Fargo sentiment gauge rose to 25 in January, coming in higher than expected but still below the 50 point indicating negative conditions.
The Labor Department has reported producer prices eased 0.1% in December. The fall was in line with expectations.
The Federal Reserve has show industrial production increased 0.4% in December, coming in slightly under expectations but rebounding from a fall of 0.3 per cent the month before.
Figures
Wall Street closed stronger on Wednesday: The Dow Jones Industrial Average added 97 points to close at 12,579, the S&P500 added 14 points to close at 1,308 and the Nasdaq added 42 points to close at 2,770.
European markets finished mixed yesterday: London’s FTSE was up 8 points, Paris was down 5 points and Frankfurt was up 22 points.
Asian markets finished mixed yesterday: Hong Kong’s Hang Seng was up 59 points, Tokyo Nikkei was up 84 and China’s Shanghai Composite was down 32 points.
The Australian share market reversed earlier losses to end in positive territory on Wednesday: The S&P/ASX 200 Index added 2 points to finish at 4,218. On the futures market the SPI is 30 points higher.
Currencies
The Australian Dollar at 8:55AM was buying $US1.0435 cents, 67.62 Pence Sterling, 80.14 Yen and 81.16 Euro cents.
Economic news due out today
Australian Bureau of Statistics: Labour force data for December 2011
Housing Industry Association - RP Data: Residential land report for the September quarter 2011.
Company news
Shares in Westpac Banking Corporation (ASX:WBC) closed 0.44 per cent weaker on Wednesday at $20.57. Speculation continues about just how many jobs will be lost in Australia’ s banking sector with the latest reports claiming Westpac is preparing to slash 600 jobs this year after cutting more than 700 jobs last year. A Westpac spokesperson has told the Australian Financial Review the bank will probably have fewer staff at the end of the year, while unnamed insiders have told the paper job losses could amount to 600. ANZ Banking Group (ASX:ANZ) cut 130 jobs earlier this week and reports claim up to 1,000 jobs could go in the next six months. Westpac reported a net profit of $7.1 billion in the 2011 financial year.
Shares in BHP Billiton Limited (ASX:BHP) closed 0.82 per cent higher yesterday at $37.00. Despite yesterday announcing record first half iron ore output doubts have emerged if global miner will be able to exceed its record earnings. BHP yesterday forecast its full 2012 financial year iron ore production would come in above guidance of 159 million tonnes. However, BHP’s profit could be threatened by weaker commodity prices, a stronger Australian dollar and the miner’s ongoing industrial relations concerns. In the 2011 financial year BHP Billiton posted a record net profit of $22.3 billion.
Ex-dividends
No companies are going ex-dividend today. Coming up tomorrow: Abacus Property Group (ASX:ABP) with an 8.25 cent unfranked dividend and Mirrabooka Investments Limited (ASX:MIR) with a 3.5 cent fully franked dividend.
Commodities
Gold is up $4.30 to $US1,659 an ounce for the February contract on Comex.
Silver is up $0.41 to $30.54 for March.
Copper is up $0.02 at $3.75 a pound.
Oil is down $0.12 at $100.59 a barrel for February light crude in New York.
