Friday, December 19, 2014

Australian Equities Market

THIS MORNING

In Australia and the US no economic data is released.

OVERNIGHT MARKETS

US Equities

US sharemarkets rallied for the second straight session on Thursday. Upbeat results from Oracle (up 8%) in the prior session continued to support technology stocks. The S&P technology sector lifted 2.2%. With just over an hour of trade left, the Dow Jones was up by 294 points or 1.7%. The S&P 500 index was up by 1.6% and the Nasdaq gained 80 points or 1.7%.

US treasuries fell on Thursday (yields higher) as traders continued to digest the commentary from the US Federal Reserve. The better economic data also supported yields. US 2 year yields rose by 2pts to 0.637% while US 10 year yields rose by 7pts to 2.211%.

Major currencies fell against the greenback in European and US trade on Thursday. The Euro eased from highs of US$1.2445 to lows near US$1.2265, and was around US$1.2285 in late US trade. The Aussie dollar rose from lows near US81.20c to around US82.00 and traded near US81.55c in late trade. And the Japanese yen traded between 118.25 yen per US dollar to JPY119.30 and was near JPY118.75 in late US trade.

World oil prices resumed its slide on Thursday a day after the short-covering rally. Traders continued to speculate on the ongoing lift in oil supply. Brent crude fell by US$1.68 or 2.7% to US$59.50 a barrel while the US Nymex crude price fell by US$2.36 or 4.2% to US$54.11 a barrel.

Base metal prices fell on the London Metal Exchange on Thursday with the exception of Nickel (up 0.2%). Tin (down 1.8%) recorded the biggest declines followed by lead (down 1.1%). Other metals lost 0.5%-0.9%. Gold rose on Thursday with Comex gold futures up by US30c an ounce or to US$1,194.80 per ounce. Iron ore rose by US10c to US$68 a tonne on Thursday.

YESTERDAY'S MARKET

Local Markets Update

This news story is reprinted from www.businessspectator.com.au

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Aust Shares Open Higher

The Australian share market is higher following a strong lead from Wall Street.

At 1015 AEDT on Friday, the benchmark SP/ASX200 index was up 70.1 points, or 1.35 per cent, at 5,280.9, while the broader All Ordinaries index rose 68 points, or 1.31 per cent, at 5,257.7.

On the ASX 24, the September share price index futures contract was up 72 points at 5,235 with 8,735 contracts traded.

This news story is reprinted from www.skynews.com.au

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MYEFO Shows Cost Of Disputes With ATO At $5.1b

The value of tax disputes, including court cases between taxpayers and the Australian Taxation Office, has reached $5.1 billion.

The latest figures in the Mid-Year Economic and Fiscal Outlook (MYEFO) show that the "estimated aggregate value of tax in dispute as at October 31 2014, for which a provision has not been made, is $5.1 billion".

This figure is up from $4.6 billion in disputes reported in the May budget, but down from $7 billion reported in the MYEFO papers from a year ago.

The ATO has mounted some big cases against multinationals including Chevron, which are still pending.

Tax Commissioner Chris Jordan has repeatedly vowed to only take cases the ATO thinks it can win to court, rather than waste time on lengthy legal disputes. This explains the dramatic fall in disputes over the past year.

The 2014-15 MYEFO papers said that the $5.1 billion figure could not be taken as an indication as a loss to government revenue, as disputes were ongoing.

"At any point in time the Australian Taxation Office is involved in a range of dispute resolution processes, including litigation, relating to tax disputes," the papers said.

"Details of the outcome of dispute resolution processes are uncertain until a court ruling is made and/or an agreement is reached with the taxpayer. As a result, in most cases it is not possible to estimate with any reliability the likely financial impact of current disputes."

According to the ATO's latest annual report, over the past 12 months, the tax office has settled 393 cases for a combined total of $2.6 billion.

"This is the highest number of settlements reached in any year for the ATO," said PWC tax controversy partner Ashley King.

"It is also the highest amount the ATO has collected from settlements of tax disputes in any year, evidence that it has not necessarily been an easy resolution path for taxpayers."

Mr King said it was all evidence of Mr Jordan's new approach to dispute resolution, which included cleaning up old disputes, but where there is conflict, taking companies to court faster.

Clayton Utz tax partner Niv Tadmore said the Tax Office and companies were now having more "efficient and constructive" engagement than was the case in previous years.

"On the one hand, the ATO audits go deeper and are more forensic and focused, and on the other hand, the ATO encourages the resolution of these disputes out of court in a more efficient and constructive way," Mr Tadmore said. "The new independent review function introduced by the Commissioner is an example on point."

This news story is reprinted from www.smh.com.au

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Thursday, December 18, 2014

Australian Equities Market

THIS MORNING

In Australia, financial accounts and population data for the September quarter are released. In the US, the leading index and retail trade figures are released.

OVERNIGHT MARKETS

US Equities

US sharemarkets rallied sharply on Wednesday after the Federal Reserve gave a strong signal that it was on track to raise interest rates at some point next year - pointing to confidence in the US economy. At the close of trade, the Dow Jones was up by 288 points or 1.7%. The S&P 500 index was up by 2% and the Nasdaq gained 96 points or 2.1%.

US treasuries fell on Wednesday (yields higher) as the commentary from the US Fed opened the door further to interest rate hikes in 2015. US 2 year yields rose by 5pts to 0.609% while US 10 year yields rose by 7pts to 2.141%.

Major currencies fell against the greenback in overnight trade. The Euro eased from highs of US$1.2495 to lows near US$1.2320, and was around US$1.2330 in late US trade. The Aussie dollar rose from lows near US81.40c to around US82.30 and traded near US82.20c in late trade. And the Japanese yen traded between 116.80 yen per US dollar to JPY117.70 and was near JPY117.25 in late US trade.

World oil prices lifted on Wednesday as a drop in US oil inventories supported bargain hunting after nearly a week of selling. Brent crude rose by US$1.17 or 1.9% to US$61.18 a barrel while the US Nymex crude price rose by US54c or 1% to US$57 a barrel.

Base metal prices were mixed on the London Metal Exchange on Wednesday. Tin (down 3%)and nickel (down 2.4%) recorded the largest falls while aluminium managed to eke out a 0.8% gain. Gold rose with Comex gold futures up by US20c an ounce or to US$1,194.50 per ounce. Iron ore fell by US20c to US$67.90 a tonne on Wednesday.

YESTERDAY'S MARKET

Local Markets Update.

This news story is reprinted from www.businessspectator.com.au

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ANZ Expects Slower Growth For Economy

ANZ expects the economy to grow more slowly in 2015 but says the longer-term outlook for Australia remains strong.

The bank's chairman, David Gonski, said that despite low interest rates and a falling Australian dollar, the economy would continue to be weighed down by weakness in the mining sector.

"In 2015, while we expect interest rates to remain low and the decline in the Australian dollar will be good for many sectors of the economy, we believe the economy will grow somewhat more slowly than in the past year," he told shareholders at the bank's annual general meeting.

Mr Gonski said while the resources sector would continue to play an important role, services such as education, health, information technology and engineering would need to become a more important part of Australia's economic future.

He also said ANZ had been actively managing its capital position in anticipation of the recent Financial System Inquiry call for banks to hold more capital.

"At the invitation of the federal government, we'll be making submissions in response to the inquiry's report in the next few months," he said.

"Whatever happens after discussions next year, I want you to know that ANZ is already strong and has a range options open to ensure it is unquestionably strong."

This news story is reprinted from au.news.yahoo.com

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