WHAT HAPPENED OVERNIGHT IN THE US:
· S&P -0.1%, again hugged record, closed just short.
· Dollar nudged another 2-week high, taking edge off exporter feel-good.
· But commodities stood firm; gold held 100 & 200dma (which has converged around $1210).
· Oil climbed off 4-week low with help from DOE draw. That stopped the rot for producers, but airlines/trucking/consumer all back-foot.
· Fed minutes added little; 2yr -3bps at 0.589% on a “range of views” about the right time to hike. “Many [members] thought it unlikely ….June [data] would provide sufficient confirmation”.
WHAT’S UP THIS MORNING IN THE EAST:
· China +1.3% & Japan both new 7yr highs, but Hong Kong -0.3% continues to drift (Tencent -1.4% back to middle of 2-month range).
· Hanergy remains suspended (after yesterday’s 47% share price drop, triggered by absence of chairman from AGM & SFC probe). So far, no big corp governance spill-over fears for other HK listed cos – market has seen this before – and fallout remains limited to Hanergy investors (eg US-listed Guggenheim Solar ETF -8%).
· China May prelim PMI Manuf 49.1 up from April’s 48.9. That’s been enough to stop recent fade in copper & iron ore. Dalian futures +3% indicate spot iron ore back above $58 today.
· Australia +0.9%, mainly resources. Iron plays bouncing (Fortescue +2% vs prior 2 days -10%), but diversifieds doing index heavy-lifting. BHP +1.4% & Rio +1.5% indicate London +2% (S32 +1.3% indicates +4%).
SOUTH AFRICAN NEWS:
· Expect AllShare unchanged. From SA close yesterday, gold +$2 ($1212), plat unchanged ($1157), copper +0.5% ($2.84/lb), oil +0.4% ($65.20), USDZAR -0.2% (11.84), S&P -0.1%.
· MDC: FY basic norm hEPS +9% vs guided range 8%-10% - looks like Swiss margin compression the reason for last week’s badly-taken update. Stock price has recovered since then, so expect stock to open lower.
· INP: FY nos largely as guided in pre-close statement, though recurring income 71.9% of total operating vs guidance “approx 76%”, but impairments -38.8% vs guidance -17%. 3rd party AUM £124bn vs guidance £123bn.
· TSH: FY adj hEPS -1%, EBITDAR unchanged at R4.2bn, div unchanged at 60c.
· AFT: FY hEPS +24.4% top-end of guided range 15%-25%, thanks to “increased focus on reducing sales volume of low-margin” (revs +5%).
· SSK: FY EPS from cont ops +69% vs guided range 55%-75%.
TODAYS KEY DATA POINTS:
· 7am+: SA earnings (NIV), Europe earnings (Royal Mail, etc)
· 9am: France May Markit PMI first read (Manuf 48.5, Serv 51.9)
· 9.30am: Germany May Markit PMI first read (Manuf 52, Serv 53.9)
· 10.30am: UK April Retail Sales (+0.2% m/m)
· 2.30pm: US initial jobless (270k)
· 3pm: SARB announces rates (unchanged at 5.75%)
· 3.45pm: US May Markit PMI first read (Manuf 54.5)
· 4pm: US April Existing Home Sales