Welcome to Wednesday. Here are the five things I'm looking at today on the Australian sharemarket.
- The S&P/ ASX 200(Index: ^AXJO) (ASX: XJO) has again opened lower, losing 0.3%, following negative leads from volatile US markets.Overnight, the Dow Jones dropped 0.2%, the broader S&P 500 fell 0.3%, while the NASDAQ was flat, as oil prices again fell. The S&P 500 had posted an earlier gain of 1.4%, before falling 1% and then recovering to end down 0.3%.Brent Oil lost 0.6% overnight to hit a new six-year low of US$47.14 per barrel. WTI Crude oil is currently trading at US$46.55 per barrel, gaining 1%.
The Australian dollar is down again, buying 81.7 US cents.
- Under fire oil and gas producer, Santos Limited (ASX: STO) is reportedly considering asset sales to bolster its balance sheet. The Australian Financial Review reports that CEO David Knox thinks some of the company's assets are more valuable in other people's hands that they are in Santos'.BG Group recently sold its gas pipeline to APA Group (ASX: APA) for US$5 billion (~A$6 billion) – Santos has a similar pipeline for its Gladstone LNG project. The company has already cut $700 million from its capex budget as it copes with the 55% fall in the oil price since June 2014.
- The iron ore price has fallen for the fifth straight day, losing 0.9% to end at US$67.90 a tonne. That's just 3% above the five and a half year low of US$65.70 reached late last year.And that was despite Chinese imports of the commodity reaching an all-time high in December. But it shows that despite strong demand, the iron ore majors have substantially increased supply into an already oversupplied market.For the low-cost producers such as Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) with costs in the low US$40's, they are still making substantial profits, but junior iron ore miners, with higher costs may well be operating at a loss.
- Tweet of the Day
Milk price wars the UK experience https://t.co/ln8l8r9gA5
Peter Morgan (@psimpsonmorgan) January 13, 2015 - Stock of the Day– brought to you by Tom Richardson – Westfield Corp Ltd (ASX: WFD). Tom thinks Westfield is one of Australia's best businesses – you can read why here.
