Welcome to Tuesday. 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 0.4% lower, following falls on US markets overnight.The Dow Jones lost 0.6%, while the broader S&P 500 fell 0.7% and the tech-heavy NASDAQ dropped 0.8%. Energy producers were sold off as the oil price dropped to its lowest level since 2009. Fears are now rising that hedge funds and other money managers will begin to sell out.
And that was despite stronger US economic data continuing to flow. Unemployment in the US is steady at a six-year low of 5.8%; 321,000 new jobs were added in November – the most since January 2012, according to Bloomberg; and economists expect reports out later this week to show consumer confidence and retail sales have improved.
- Rio Tinto Limited (ASX: RIO) chief financial officer Chris Lynch says the mining giant has been surprised by the massive falls in the iron ore price this year.
Rejecting claims that the world's second-largest iron ore producer has flooded the market with excess supply, Mr Lynch has told the Australian Financial Review (AFR), "the concept of deliberately trying to manipulate the market isn't something we would ever contemplate."
Rio has been accused by Glencore and West Australian premier Colin Barnett of flooding the iron ore market along with BHP Billiton Limited (ASX: BHP), causing prices to slump.The spot iron ore price fell overnight to US$69.70 per tonne.
- Qantas Airways Ltd (ASX: QAN) CEO Alan Joyce forecasts the airline is heading for its best half year result in four years. Cost cutting is doing the heavy lifting, with Qantas aiming for $2 billion of costs cuts over a three-year period.
But shareholders might not want to get too cosy of the prospect of the company paying dividends, with Mr Joyce focusing on repaying $1 billion of debt. Some analysts say the airline will then need to invest in newer aircraft, so dividends could be a long way off.
- Tweet of the Day
Yellow Brick Road (@YBRWealth) December 8, 2014
Sounds like great financial advice to me!
- Stock of the Day – brought to you by Andrew Mudie – Coca-Cola Amatil Ltd (ASX: CCL). The fizzy drink distributor is down in the dumps – can it recover, and is now the best time to get a piece of the world's most well-known brand? Read more here.
