Wednesday, April 23, 2014

Australian Equities Market

THIS MORNING

In Australia the Consumer Price Index is published. In the US, the weekly mortgage market index is released together with the Markit purchasing managers index and new home sales data. In China, the ´´flash´´ manufacturing gauge is released.

OVERNIGHT MARKETS

US Equities

US sharemarkets rose on Tuesday in response to takeover activity in global pharmaceuticals and positive US economic data. The Dow Jones index rose by 65 points or 0.4% with the S&P 500 up by 0.4%, while the Nasdaq rose for the sixth straight day, up by 39.9 points or 1.0%.

US long-term treasury prices were little-changed on Tuesday as investors focussed on new bond supply. US Treasury sold US$32 billion of two-year notes on Tuesday and will sell $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.US 2 year yields were steady at 0.41% while US 10 year yields were steady at 2.72%.

Major currencies ended European and US trade little changed against the greenback compared with the Asian close. The Euro held between US$1.3785 and US$1.3825, before ending US trade around US$1.3805. The Aussie dollar rose from lows near US93.45c to around US93.75c before finishing US trade around US93.65c. And the Japanese yen held between 102.41 yen per US dollar and JPY102.65 and was near JPY102.58 at the US close.

World oil prices fell on Tuesday on expectations that data would show that US crude oil inventories rose last week to near record highs. But Brent crude fell by less than US Nymex on continued worries about the geopolitical situation in Ukraine. Brent crude fell by US68c or 0.6% to US$109.27 a barrel while US Nymex fell by US$2.24 or 2.1% to US$102.13 a barrel.

Base metal prices rose by up to 2.3% on the London Metal Exchange on Tuesday with nickel leading the way although copper rose by just 0.3%. The Comex gold futures quote fell for the third straight session, down by US$7.40 an ounce or 0.6% to US$1,281.10 per ounce. Iron ore fell by US80c to US$112.50 a tonne on Tuesday.

YESTERDAY'S MARKET

Local Markets Update.

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

Read more details on Australian Stock Market

Australia’s Crown Prepares $2-B Las Vegas Casino Bid – Report

SYDNEY – Australia's Crown Resorts Ltd. is set to bid for a $2-billion casino complex in Las Vegas, according to media report, underscoring the Melbourne-based casino operator's ambition to expand to more markets.

Crown will lodge an expression of interest for three-year-old casino and hotel complex The Cosmopolitan of Las Vegas, which is owned by Deutsche Bank, the Australian Financial Review said on Tuesday, citing unnamed industry sources. The sale was expected to fetch $1.5 billion to $2 billion, AFR added.

Crown, controlled by billionaire James Packer, is also bidding for a $1 billion-plus casino project in Brisbane after winning the right to operate a VIP gaming facility at its luxury hotel project in Sydney. The company is building new casinos in Sri Lanka and the Philippines, and it has expressed an interest in building a $5 billion-plus casino and resort in Japan.

Crown was not immediately available for comment.

The deal would be another attempt by Crown to break into the US market, after it got burned by its two previous investments there made just before the global financial crisis.

Crown bought Cannery Casino Resorts for $1.75 billion in 2007 and invested $250 million for a 19.6 percent stake in the Fontainebleau Resort.

The Cosmopolitan opened in December 2010, but has made net losses of $298.3 million over its first three years of operation, the paper said.

Deutsche Bank, which took ownership of the resort when it foreclosed on the project's previous owner, has been preparing to sell it since late 2012.

This news story is reprinted from www.gmanetwork.com

Read more details on Brisbane Accountants

Rising Inflation Keeps The Reserve Bank Guessing On Economic Growth

THE Reserve Bank’s belief that the Australian economy is still capable of achieving growth in excess of 3 per cent will be challenged if this week’s March quarter inflation report repeats the unacceptably elevated level of the December quarter.

The underlying measures of price growth rose to 0.9 per cent in the December quarter which, if sustained, would push inflation well over the top of the Reserve Bank’s 2 to 3 per cent band.

Governor Glenn Stevens has described this result as “something of a puzzle”, given that economic growth is slow, business surveys show plenty of idle capacity and wage rises are the smallest seen in the 15 years that the Australian Bureau of Statistics has been measuring them.

“If you think about the general situation, 18 months of growth having been below trend, unemployment having gone up and wages growth having slowed, that is not one that would obviously be associated with a sustained rise in price pressure,” he told the last parliamentary economics committee hearing.

Although it partly reflected the depreciation of the Australian dollar pushing up the cost of imports, this did not explain why the prices of domestic goods and services were rising.

“It could be that there was a higher than usual degree of noise in the data, which can occasionally occur, owing to the difficulties of measurement or the timing of price changes,” the bank’s last Monetary Policy Statement said. “This would imply the higher-than-expected inflation recorded in the quarter will not persist. Alternatively, the stronger inflation outcome raises the possibility that there is less spare capacity in the economy than previously thought, which would suggest that the outlook for inflation would be somewhat higher than previously anticipated.”

It is this second option that the bank will have to consider if the March quarter again produces a high figure for core inflation.

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

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Australia Reviewing ATO Mandate

Australian Tax Commissioner Chris Jordan has spoken of his desire to "reinvent" the Australian Taxation Office (ATO) to make it a contemporary and service-oriented organization.

Speaking at a conference in Sydney, Jordan admitted that this reinvention is likely to be a "long term journey." He acknowledged that "building trust in a tax administration is not a simple or quick effort, nor one that you can let up."

Jordan has given the ATO a new mission statement: "To contribute to the economic and social wellbeing of Australians by fostering willing participation in the tax and superannuation systems." He rates the current level of "wiling participation" as good, with more than 95 percent of revenue collected coming in voluntarily.

Jordan argued that the ATO must now ask itself "how do we design the system so that it suits the 95 percent." It will need to strike the right balance of investment in compliance enforcement, help and education, and in systems that save time, effort and money, he said. The Commissioner has also set the ATO the goal of being "a leading taxation and superannuation administration known for our contemporary service, expertise and knowledge" by 2020.

An Integrated Tax Design Unit will ensure that requests to the Treasury are prioritized and presented from a holistic perspective. Likewise, the ATO is in the process of streamlining its consultation arrangements. The Office also recently launched its first app, which enables taxpayers to track the progress of returns, and has created an interactive online product, Small Business Assist, to provide access to information and tools with the option of an after-hours call-back service.

Australia is also at the forefront of international efforts to crack down on tax avoidance and evasion, with the Government using its presidency of the Group of Twenty (G20) nations to push forward a number of initiatives.

Jordan explained that the ATO is "already working collaboratively and collectively with other tax administrations to share intelligence, undertake risk assessments and compliance action. For Base Erosion and Profit Shifting (BEPS) and multinationals involved in the digital economy we are putting together top down, global pictures of these companies so we can understand what that means for each of our jurisdictions."

"We are also looking at international restructures that involve service hubs in low tax jurisdictions, where the profits shifted do not match the economic activity and reality."

Earlier this month, the ATO announced a limited offer disclosure facility that enables those with offshore assets to make a voluntary disclosure and escape tough penalties. To date, there have been 16 disclosures and 33 expressions of interest, Jordan said.

This news story is reprinted from www.tax-news.com

Read more details on Taxation Accountants.

Tuesday, April 22, 2014

Australian Equities Market

THIS MORNING

In Australia, no major economic data is scheduled. In the US, data on existing home prices, FHFA home prices and the Richmond Federal Reserve index are released.

OVERNIGHT MARKETS

US Equities

US sharemarkets rose on Monday in thin trade ahead of a big week of earnings results. According to Thomson Reuters, of the 87 companies in the S&P 500 that have reported results through Monday, about 62.1% have topped earnings expectations, compared with the 66% average over the past four quarters. Traders were watching news of a potential merger between gold producers Newmont and Barrick Gold. Shares in Barrick Gold fell by 3.9% while Newmont rose by 6.4%. The Dow Jones index rose by 40 points or 0.3% with the S&P 500 up by 0.4%, while the Nasdaq rose by 26 points or 0.6%.

US long-term treasury prices rose modestly on Monday (yields lower) as bargain hunters moved in after sharp losses last Thursday. US 2 year yields fell by 2 points to 0.395% while US 10 year yields eased 1 point to 2.715%. Last week US 2 year yields rose by 3 points and US 10 year yields rose by 8 points.

Major currencies held in tight ranges against the greenback in European and US trade on Monday. The Euro held between US$1.3785 and US$1.3830, before ending US trade around US$1.3795. The Aussie dollar held between US93.15c and US93.45c before finishing US trade around US93.25c. And the Japanese yen held between 102.49 yen per US dollar and JPY102.67 and was near JPY102.61 at the US close.

World oil prices rose modestly on Monday. Investors continue to watch geopolitical developments in Ukraine and the potential for a reopening of Libyan ports. Brent crude rose by US42c or 0.4% to US$109.95 a barrel while US Nymex rose by US7c to US$104.37 a barrel.

Base metal prices were mixed on Thursday on the London Metal Exchange, rising or falling by up to 0.5%. There was no trading on Friday and Monday. The Comex gold futures quote fell by US$5.40 an ounce or 0.4% on Monday to US$1,288.50 per ounce - a two-week low. The iron ore price stands at US$113.30 an ounce, down from US$116.50 a tonne on Thursday.

YESTERDAY'S MARKET

Local Markets Update.

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

Read more details on Australian Stock Market