Wall Street was closed overnight for the 4th July holiday. In thin trading in Europe overnight, most markets were flat as investors avoided trading ahead of key economic policy decisions by the European Central Bank and the Bank of England. The UK's FTSE 100 Index was down 0.1%, the German DAX down by 0.2% and the French CAC 40 down 0.1%.
All eyes will be on the euro zone later to see if the policy makers decide to cut interest rates, or leave them on hold.
The Australian dollar drifted lower, currently trading around 102.7 US cents.
Tensions in the mid-east are rising as the US and Iran face off, over fears Iran could attempt to block the Strait of Hormuz, which sees a fifth of the world's oil supply flow through it. The US has increased its military presence in the region, with additional minesweepers and stealth aircraft deployed. Oil prices slipped overnight to fall just under US$100 a barrel, but prices could surge if tensions escalate.
A directionless start?
The ASX SPI futures were flat this morning, indicating the S&P / ASX 200 (Index: ^AXJO) (ASX: XJO) will have to tread its own path when markets open. Still, there's plenty of company news to drive the market today.
Woolworths Limited (ASX: WOW) has launched court action to stop consumer advocacy group Get Up! and some shareholders calling an extraordinary general meeting (EGM). Get Up! wants to restrict the company's poker machine operations. Get Up! wants to stop the company from owning poker machines with more than a $1 maximum bet, as well as other restrictions. The group has also called for the same limits on Wesfarmers Limited. Woolworths owns around 12,000 poker machines, and earns substantial revenues from its gaming activities.
Macquarie Group Limited (ASX: MQG) has suffered a blow in China, with Chinese authorities cutting the toll rates on the Hua Nan Expressway in Guangzhou, majority owned by one of the company's infrastructure funds. According to the Australian Financial Review, the cut will wipe out up to 25% of the total revenue generated by the road.
Brumby's Bakeries, owned by Retail Food Group Limited (ASX: RFG) could face a $1m fine, according to the Australian Financial Review, after its managing director sent a newsletter to 300 franchisees, encouraging them to raise prices and blame it on the carbon tax. The Australian Competition and Consumer Commission is likely to take a dim view, following federal government policy that companies using the carbon tax as a reason to raise prices will be harshly dealt with. RFG CEO Tony Alford said the comments were not sanctioned and were foolish (note the lower case 'f') and ill-considered.
Meanwhile, Qatar Airways is reported to be seeking an alliance with Qantas Airways Limited (ASX: QAN), although Qantas declined to comment on any potential tie-up between the two carriers.
Foolish takeaway
It's shaping up as another 'yawn' day on the markets given the weak overseas leads – although the last time I said that, the market rallied 1.2%. Today might be a good day to catch up on Foolish articles, if you have the time – see the More Reading section below.
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Motley Fool writer/analyst Mike King owns shares in Woolworths. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
