Welcome to Monday. 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 1.1% higher after Wall Street soared on Friday.
The Dow Jones rocketed up 1.5% while the broader S&P 500 rose 1.4% and the tech-heavy NASDAQ added 1.2%.
Oil prices are gradually rising from their lows – although daily movements can be mixed. Brent Crude Oil was down slightly to US$65.39 per barrel while WTI Crude added 0.7% to US$59.39 per barrel. (WTI stands for West Texas Intermediate and is the benchmark oil price in the US while the Brent crude oil price is more widely used in Europe.)Iron ore prices regained all of Thursday's fall and more, rising 1.7% to US$61.40 per tonne on Friday.
The Australian dollar is steady against the US dollar and is currently buying 79.3 US cents.
- The Australian reports that Netflix has taken Australia by storm since launching here in March while its main competitors Stan and Presto have struggled to attract audiences. Stan is a joint venture between Fairfax Media Limited (ASX: FXJ) and Nine Entertainment Co Holdings Ltd (ASX: NEC), while Presto is pay-TV operator Foxtel's offering in the subscription video on demand (SVOD) sector.
News that Telstra Corporation Ltd (ASX: TLS) is offering new mobile customers free access to NRL and AFL game streaming is another hit to the commercial TV networks. Sports and news programs have been the last bastions keeping the free-to-air networks afloat against increasing competition, but even that is now being eroded.
I've written about this before, but it seems clear – particularly with the issues Ten Network Holdings Limited (ASX: TEN) is having generating profits – that Australia can support at most two commercial networks, not three.
- Rio Tinto Limited (ASX: RIO) says thermal coal prices are likely to stay weak for an extended period of time. Rio's Jean-Sébastien Jacques has told the Australian Financial Review a recovery in coal would take "a long, long time".
Thermal coal prices are around six-year lows of US$63 per tonne, and the big producers have been closing mines and slashing jobs and costs in an effort to remain cash-flow positive. Most of Rio's coal production is thermal coal.That could be bad news for Australia's smaller thermal coal producers, who may struggle to survive at those prices over an extended period of time.
- Tweet of the Day
In case you missed it on the weekend, here's how it went so wrong for @Woolworths https://t.co/Ck6UxCJs0l #retail pic.twitter.com/I9ZKAnSZ17
Financial Review (@FinancialReview) May 10, 2015My view and its contrarian is that Woolworths Limited's (ASX: WOW) woes are likely to be short-term in nature. Long-term investors might want to take a closer look at one of Australia's best listed businesses.
- Stock of the Day – brought to you by Tim McArthur – Corporate Travel Management Ltd (ASX: CTD) announces another profit upgrade. Will it fly higher?
