Welcome to Tuesday. Here are the five things I'm looking at today on the Australian sharemarket.
- The S&P/ ASX 200 Index (Index: ^AXJO) (ASX: XJO) has opened 0.2% higher, following mixed results on Wall Street overnight. The Dow Jones Industrial Average gained 0.3%, while the S&P 500 lost 0.1% to 1,984. The NASDAQ index had a shocker, falling 1.1%, as internet stocks, like Facebook, TripAdvisor and Twitter all fell more than 3.5%.
But it may be nothing more than a temporary pull back. As Mike Balkin, portfolio manager at William Blair told Bloomberg,"A lot of these companies have had good runs and this is part of a healthy correction."
JP Morgan Chase & Co's former chief equity strategist, Thomas Lee has told his new clients that he sees the S&P 500 at 2,100 by the end of this year, around a 6% gain.
Yes Fools, the bull market rolls on and buying on the dip could be healthy for your wealth.
Related > Free guide — Your 10 Step Guide to Making $1 Million in the Market
- While iron ore has been getting the headlines lately, around a third of global gold production is probably losing money when the yellow metal is priced below US$1,250 an ounce, according to Joe Wickwire at Fidelity Investments.
Gold is currently trading at around $1,235 an ounce, and Mr Wickwire suggests the gold industry needs a clean out of the high cost producers, and to get back to basics, generating profits at conservative gold prices.I recently sold all my gold equity holdings – having lost faith with a sector that has done a very poor job when it comes to managing their costs, shareholder expectations and delivering a return on the enormous sums of capital invested.
- The Australian Financial Review (AFR) speculates that Solomon Lew's Premier Investments Limited (ASX: PMV) may take a tilt at department store retailer Myer Holdings Limited (ASX: MYR). Premier has around $300 million in cash and investments – including a stake in Breville Group Ltd (ASX: BRG), while Mr Lew's private investment companies are reported to be flush with cash following the sale of stakes in David Jones and Country Road.Premier's CEO Mark McInnes was previously CEO of David Jones, so he certainly knows what it takes to run a department store chain.A takeover tilt is unlikely in my view. Premier will probably see more value from investing in organic growth in its Smiggle, Peter Alexander and Just Group retail stores. Premier recently increased its stake in Breville Group to 27.3%, and Breville could be a more likely takeover option.
- Tweet of the Day.
Rio Tinto seen as logical acquisition for Glencore $RIO https://t.co/4bWnzpEEVl
Financial Review (@FinancialReview) September 15, 2014Is Rio Tinto Limited (ASX: RIO) a takeover target?
- Stock of the Day – brought to you by Peter Stephens – Macquarie Group Ltd (ASX: MQG). The locally-grown investment bank recently confirmed this financial year will be an improvement on 2014. Peter outlines three reasons why investors may want to hang onto their shares.
