Welcome to Monday and the start of another action-packed week on the ASX. 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 1.2% higher, with the four big banks leading the way. On Friday, US markets soared, with the Dow Jones adding 1.6%, the broader S&P 500 gained 1.3%, while the tech-heavy NASDAQ rose 1%.Whether it will last, nobody knows though, given recent volatility in the markets.
- BHP Billiton Limited (ASX: BHP) marketing boss Mike Henry says lower iron ore prices are here to stay, and in fact, says the commodity price is unlikely to rise back above US$100 a tonne for a sustained period of time.The spot iron ore price has fallen 40% since highs earlier this year, and is currently trading at around US$83 a tonne. The falling price has been driven by the large miners including BHP, Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG) and Brazil’s Vale, ramping up production at unprecedented speed.But at the mercy of these giants are the mainly high cost Chinese iron ore producers and a number of smaller, high cost Australian producers. A number of those Chinese producers have already exited the market, according to Mr Henry, and he expects more Chine mines to close.
You can read more of our current thoughts on BHP here.
- Transfield Services Limited (ASX: TSE) has become the second of Australia’s large contracting companies to receive a takeover bid by a Spanish company in the past year. Transfield reported this morning that it had received a $1.95 per share bid from Ferrovial Servicios SA, valuing the company at around $1 billion.Transfield’s shares closed at $1.50 on Friday.Construction giant Leighton Holdings Ltd (ASX: LEI) is in the grips of major shareholder Hochtief, which in turn is owned by Spanish contracting giant, Grupo ACS. Former ACS executive Fernandez Verdes is now CEO of Leighton Holdings.
- Tweet of the Day
— Financial Review (@FinancialReview) October 19, 2014
Strong population growth and housing construction has seen NSW overtake Western Australia as the best-performing state economy for the first time since 2011.
- Stock of the Day – brought to you by Tim McArthur, are actually six stocks that can help your portfolio withstand a market crash. With volatility rising, investors need to have a core group of stocks that can plough through the choppy waters with little or no impact. You can read more here…
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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga