MID-SESSION REPORT (12.30pm AEDT)
The Australian sharemarket has kicked off the week a touch higher, with the All Ordinaries Index (XAO) up just 0.1 per cent or 3.1 pts to 4945. Global markets rose impressively on Friday, partly thanks to a healthy jobs report out of North America. There were 157,000 jobs created in January, while previous monthly reports were upgraded which was also seen as a positive.
The local market is higher for the 12th time in 13 trading sessions and equities (shares) are up 6 per cent since the start of this calendar year. This makes it the second best start we've had to a new year since 1994.
It's the mining sector which is keeping the market positive at lunch, with Rio Tinto (RIO) up 1.32 per cent or 88.5 cents to $68.08 while the larger BHP Billiton (BHP) is 0.22 per cent or 8.5 cents higher to $38.00.
The big four banks are holding the market back with both Commonwealth Bank (CBA) and Westpac (WBC) easing by as much as 0.5 per cent. WBC is down 0.53 per cent or 15 cents to $28.15 while CBA is 0.28 per cent or 18 cents lower to $64.87.
Australia's largest airline, Qantas (QAN) is up 0.32 per cent or 0.5 cent to $1.54, taking the gains for the year so far to around 3 per cent. QAN this morning outlined its new Asian strategy as part of its alliance with Emirates. Beijing, Seoul, Tokyo, Delhi and Mumbai are being considered as possible destinations.
On the economic front, the monthly TD Securities/Melbourne Institute inflation report was issued and showed that inflation is very much under control; rising by just 0.3 per cent over the month of January. If the Reserve Bank (RBA) thinks a rate cut is necessary, it certainly does have the scope to make a move. The market is still only factoring in a 15 per cent chance of a cut tomorrow afternoon at 2.30pm (AEDT). The RBA always makes its interest rate decision public at 2.30pm (AEDT) on the first Tuesday of each month with the exception of January.
The ANZ job advertisements report has shown that the number of jobs being advertised both in newspapers and on websites has pulled back for the 11th consecutive month. This isn't a positive sign for those looking for work. It is important to note however that this report seems to have lost some of its predictive power. Employers are adopting less traditional means to recruit some staff; such as LinkedIn and Facebook.
The volatile monthly reading on building approvals was issued this morning and has shown that the number of approvals fell by 4.4 per cent in December. This is a forward looking indicator as it measures how many approvals were granted to developers by councils over the month. Receiving a building approval is one of the first necessary steps to constructing a property. Keep in mind that the number of new homes sold recently has been on the rise due to State government incentives.
Later on this week the latest retail spending data along with a monthly jobs report will be issued on both Wednesday and Thursday.
The earnings season also kicks off for the first half (the final six months of 2012 calendar year) this week. Telstra (TLS), Primary Health Care, Newscorp, Tabcorp, Webjet and Newcrest Mining will all be issuing their profit numbers. The volume of companies releasing results will intensify over the coming weeks, with it climaxing in week three. BHP Billiton, Woodside Petroleum and Fortescue are all expected to announce their numbers in week three.
Following the start of daylight savings in October, major markets in the region will be trading between the hours mentioned below until April 2013.
The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 12.30pm (AEDT) and 3pm (AEDT) while the second session is between 4pm (AEDT) and 7pm (AEDT).
Out of Japan, the first session will be between 11am (AEDT) and 1pm (AEDT) while the second session is between 2.30pm (AEDT) and 5pm (AEDT).
The Singapore exchange will be open for trade between 12pm and 3.30pm (AEDT) for the first session and then between 5pm and 8pm (AEDT) for the second.
U.S futures are currently pointing to a slightly stronger start to trade tonight. The U.S market trades between 1.30am (AEDT) and 8am (AEDT).
So far in trade at lunch, 904 million shares have been traded worth just $1.48 billion. 510 shares are up, 380 are lower and 322 are currently unchanged.
The Australian dollar (AUD) buys US104.2 cents, €76.4 cents and £66.3 pence.
The AUD is the world's fifth most traded currency behind the U.S dollar, the Euro, Japanese Yen and British Pound. The AUD accounts for around 7 pct of all foreign exchange trades.
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