Welcome to Wednesday. Here are the five things I'm looking at today on the Australian sharemarket.
- The S&P/ ASX 200(Index: ^AXJO) (ASX: XJO) has opened up 0.7% higher at 5,345.3, led by the big miners and the financials.US markets posted mild gains overnight, with the Dow Jones ending flat, the S&P 500 up 0.15% and the NASDAQ up 0.4%.
The Australian dollar is down slightly, currently buying 81.7 US cents.
- BHP Billiton Limited (ASX: BHP) has reacted to the 55% plus slide in the oil price, announcing that it had slashed its exploration budget by 20% and reduced the number of onshore oil rigs in operation by around 40% by June.Expect other oil producers to follow suit around the world if they haven't already begun. Those most in the firing line are the junior oil and gas explorers, energy services companies such as Titan Energy Services Limited (ASX: TTN), WorleyParsons Limited (ASX: WOR) and companies like Monadelphous Group Ltd (ASX: MND).
- Oil and gas stocks Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) have been sold off in early morning trading after the oil price fell again overnight. Brent oil fell 1.2% to US$48.28 per barrel, while WTI crude slid 4.7% to US$46.39/bbl.In June 2014, Brent Crude was trading at around US$110/bbl while WTI was around US$100/bbl. Now you can see why BHP is slashing exploration and drilling.
- Tweet of the Day
Bill Evans (Westpac) reiterates his RBA to cut in Feb view. Market pricing this at 19% prob
Chris Weston (@ChrisWeston_IG) January 20, 2015Interest rate cuts on the way? Bets appear to be rising that the RBA will cut rates – good news for those companies paying decent fully franked dividends.
- Stock of the Day– brought to you by Brendon Lau – Universal Biosensors, Inc (ASX: UBI). You can see what Brendon thinks of this tiny medical diagnostics company here.