The Australian share market is set to begin the trading day in negative territory after US stocks tanked on suggestions the Fed may pull back on its massive stimulus program in the coming months.
A senior US Fed official predicted the central bank is likely to cut its bond-buying program later this year, and possibly as early as next month depending on economic data.
Chicago Federal Reserve Bank president Charles Evens became the third Fed official in two days to say the Fed may consider a September tapering of stimulus spending.
US economic data
Meantime, the US trade deficit shrank by an unexpectedly large margin in June as imports fell and exports grew. The trade gap fell to $US34.2 billion in June, down from a revised $US44.1 billion in May.
Figures
Wall Street was in the red: The Dow Jones Industrial Average lost 93 points to close at 15,519, the S&P 500 dropped 10 points to close at 1,697 and the NASDAQ dived by 27 points to close at 3,666.
European markets followed suit: London’s FTSE fell 15 points, Paris lost 17 points and Frankfurt dived by 99 points.
Asian markets were mixed: Tokyo’s Nikkei added 143 points, Hong Kong’s Hang Seng fell by 298 points, and China’s Shanghai Composite added 10 points.
The Australian share market dipped yesterday. The S&P/ASX 200 index closed 6 points down to finish at 5,106. On the futures market the SPI is 19 points down.
Currencies
The Australian dollar has held onto its gains after rallying on the back of yesterday's RBA interest rate cut. At 7:20AM the Aussie was buying $US89.89 cents, 58.57 Pence Sterling, 87.9 Yen and 67.56 Euro cents.
Economic news
The Australian Bureau of Statistics will release its housing finance data for June and the Australian Industry Group and Housing Industry Association will release the performance of construction index for July.
Company news
Twenty-First Century Fox Inc
(ASX:FOX) has posted a bumper full year earnings report after the Wall Street closing bell this morning. Rupert Murdoch’s film and television business saw income from continuing operations rise to $977 million, from $596 million a year earlier. It’s the company’s first report since splitting from News Corp
(ASX:NNC). Shares in Twenty-First Century Fox dropped 1.19 per cent yesterday to close at $34.82.
Cochlear Limited
(ASX:COH) says its game-changing Nucleus 6 device will be a big contributor to its 2014 financial results. The hearing device maker says the rollout of the new implant is underway in Europe after its sale in the region was recently approved. Shares in Cochlear lifted 1.44 per cent yesterday to close at $60.
Ex-dividend Australian Masters Corp Bond No.5 Limited
(ASX:AKY) will pay 105 cents per share fully franked
Australian Masters Yield Fund Number 1 Limited
(ASX:AYD) will pay 100 cents fully franked
Australian Masters Yield Fund Number 2 Limited
(ASX:AYH) will pay 100 cents fully franked
Commodities
Gold is down $19.90 to $US1,283 an ounce for the December contract on Comex. Silver is down $0.20 to $19.52 for September. Copper is up $0.01 at $3.17 a pound. Oil is down $1.26 at US$105.30 a barrel for September light crude in New York.
