The Australian share market is expected to surge at the open, after a mixed result on Wall Street with the S&P 500 closing at a record high on the last-minute debt ceiling deal, but weaker-than-expected results from IBM and Goldman Sachs put pressure on the Dow.
The recent political wrangling in Washington has led some investors to believe the US Federal Reserve will have no choice but to leave its fiscal stimulus measures in place for several more months. That could keep stocks rising through the rest of the year.
US economic news
The number of Americans filing new claims for unemployment benefits dropped from a six-month high last week but remained elevated as California continued to deal with a backlog related to computer problems.
Currencies
THE political battle over the US budget has taken its toll on the greenback, pushing the Australian dollar above 96 US cents. At 8:20AM the Aussie was buying $US96.29 cents, 59.59 Pence Sterling, 94.24 Yen and 70.44 Euro cents.
Figures
Wall Street was mostly higher: The Dow Jones Industrial Average lost 2 points to close at 15,372, the S&P 500 added 12 points to close at 1,733 and the NASDAQ lifted 24 points to close at 3,863.
European markets fell lower after commentary from German think tanks the nation’s economy will likely grow at a significantly slower pace this year, contrary to earlier expectations for a modest improvement. London’s FTSE added 5 points, Paris lost 4 points and Frankfurt lost 34 points.
Asian markets were also mixed: Tokyo’s Nikkei added 119 points, Hong Kong’s Hang Seng dropped 133 points, and China’s Shanghai Composite fell by 5 points.
The Australian share market closed 0.4 per cent stronger yesterday, after the US finally reached a temporary budget deal and eased the nerves of market participants worldwide. The S&P/ASX 200 index closed 20 points up to finish at 5,283. On the futures market the SPI is 30 points higher.
Company news
Qantas Airways Limited
(ASX:QAN) will hold its annual general meeting in Brisbane today where chief executive officer Alan Joyce is expected to tell shareholders the airline will return its international business to a break-even position by fiscal 2015. Analysts will be watching for more comments from Mr Joyce today about the airline’s outlook. Shares in Qantas lifted 3.14 per cent yesterday to close at $1.48.
ARB Corporation Limited
(ASX:ARP) says its profit will fall due to slowing sales growth and rising costs. The four-wheel-drive accessories maker told shareholders at the AGM that the company's profit in the first quarter of fiscal 2014 will drop by as much as 10 per cent. Shares in ARB fell 5.66 per cent yesterday to close at $11.50.
Ex-dividend
Commodities
Gold futures soared as the US government's deal to temporarily avoid a debt default and reopen operations raised the possibility that the Federal Reserve will delay tapering its stimulus program – analysts say that will support ASX-listed gold plays today. Gold is up $40.70 to $US1,323 an ounce for the December contract on Comex. Silver is up $0.58 to $21.95 for December. Copper is down $0.01 at $3.30 a pound. Oil is down $1.62 at US$100.67 a barrel for November light crude in New York.
