need2know: Weak lead from Wall St

Local stocks are poised to open lower as Wall St retreated from record highs.

What you need2know:

• SPI futures down 25 points at 5486

• AUD at 93.77 US cents, 95.44 Japanese yen, 68.39 Euro cents and 55.91 British pence at 6am AEST

• On Wall St, S&P500 -0.5%, Dow Jones -0.6%, Nasdaq -0.7%

• In Europe, Euro Stoxx 50 flat, FTSE100 +0.1%, CAC -0.1%, DAX flat

• Spot gold added 1% to $US1306.69 an ounce

• Iron ore rose 0.5% to $US103.50 per metric tonne

• LME copper up 1.1 per cent to $US6920 a metric tonne

• Brent oil up 0.9% to $US110.20 per barrel

What’s on today

Australia: The RBA’s head of financial stability Luci Ellis to deliver speech. Also, new motor vehicle sales for April will be released at 11.30am AEST.

Stocks to watch

Graincorp and Paladin Energy will release results today. Sydney Airport will host its AGM.

Private equity firm CHAMP Ventures and Lorna Jane Clarkson, the founder of popular activewear clothing brand Lorna Jane, have decided to put the business up for sale, according to the Street Talk column in The Australian Financial Review.

JPMorgan has raised its price target for Panaust to $2.30 from $1.85 after declaring the takeover offer by the copper miner’s biggest shareholder this week as “fair”.

Deutsche has cut its earnings forecasts for Orica by 6 to 7 per cent after the company’s first-half result missed the mark.


The European Central Bank is preparing a package of policy options for its June meeting, including cuts in all its interest rates and targeted measures aimed at boosting lending to small- and mid-sized firms (SMEs).

Separately, the Bundesbank is ready to back ECB policy action if needed but not every measure under discussion is suitable and large-scale asset purchases may well not be, the president of the German bank said.


Tata Steel said a phase of solid economic growth in Europe was supporting a recovery in steel demand in its main market.

Domestic crude oil production in the United States hit 8.43 million barrels per day (bpd) last week, the highest level since October 1986, weekly data from the US Energy Information Administration (EIA) showed.

United States

Shares on Wall Street fell on Wednesday, with the Dow and S&P 500 easing back from recent record highs, as small caps resumed their sell-off and consumer discretionary shares lagged.

International Business Machines said it expects its hardware sector to grow in 2015 as the company invests in research and development and divests low-performing ventures.

Retailer Fossil Group was the biggest percentage decliner on the S&P 500 a day after it gave a second-quarter profit outlook that was much lower than expected, pressured by rising costs.

US producer prices recorded their largest increase in 1-1/2 years in April as food prices surged, in a potential sign inflation pressures may be creeping up.


Weak corporate updates, especially in the media sector, caused European shares to pause on Wednesday. Portugal’s PSI 20 index fell 3.4 per cent, led lower by banking stocks after a report said Millennium bcp was considering a capital increase.

German insurer Allianz has called on its California-based asset manager, Pimco, to prove itself after investors withdrew a further €22 billion in the first quarter, denting group earnings.

The International Monetary Fund sees a 25 per cent chance of the the euro zone slipping into deflation by the end of next year, the fund’s chief economist said on Wednesday.

What happened yesterday

Shares in Australia’s biggest bank, Commonwealth Bank of Australia, hit a record high on Wednesday after another bumper profit, but it wasn’t enough to lift the market, with two of its rivals dipping after trading ex-dividend.

The benchmark S&P/ASX 200 Index inched down just 1.7 points, or 0.03 per cent, on Wednesday to 5496.5.

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