Welcome to Thursday. 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 flat, after mixed results on Wall Street overnight, with the Dow Jones up 0.1%, and the S&P 500 index down 0.1%.
But the bull market could be about to roar, as an estimated $68 billion worth of dividends tries to find a home. Broker Credit Suisse says around $10 billion of that went to self-managed super funds alone. And Goldman Sachs equity strategist Matthew Ross noted investors’ love-affair with dividends continues,
“It’s still a market that really likes defensive, high yield income streams.”
- Iron ore continues its slide, losing another 1.2% overnight to US$85.70 per tonne – another five-year low. The fall from above US$120 a tonne has wreaked havoc with junior miners’ share prices over the past six months. BC Iron Limited (ASX: BCI) is down 53%, Mount Gibson Iron Limited (ASX: MGX) has lost 26%, while Atlas Iron Limited (ASX: AGO) is down more than 44%.
At current or lower prices, all three may well be loss-making, unless they can dramatically cut production costs further. They could be forced into action very soon, with rising supply and falling demand showing no signs of ending.
- On the bright side, nickel miners like Western Areas Limited (ASX: WSA), Independence Group (ASX: IGO) and Panoramic Resources Limited (ASX: PAN) could surge today, after a Philippines senator called for the ban on nickel ore exports. Nickel prices jumped to a four week high on the London Metal Exchange, at US$19,075 a tonne overnight.
We highlighted the rising nickel price and nickel miners and explorers that could benefit back in April. Since then, Western Areas and Panoramic are up 24% and 37% respectively.
- Tweet of the Day
Our love affair with big bank stocks seems to be cooling – analysts see as much as $44b being set free https://t.co/DIbBgnGCQe
— Financial Review (@FinancialReview) September 3, 2014
Will bank share prices be smashed? A number of headwinds seem to be rising.
- Stock of the Day – brought to you by Tim McArthur – Amcom Telecommunications Ltd (ASX: AMM). Tim says Amcom is a better bet than Telstra Corporation Ltd (ASX: TLS), and you can find out why in his article.
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Motley Fool writer/analyst Mike King owns shares in Amcom and Telstra. You can follow Mike on Twitter @TMFKinga
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