Welcome to Friday and the start of May. Here are the five things I'm looking at today on the Australian sharemarket.
- The S&P/ ASX 200 (Index: ^AXJO) (ASX: XJO) has opened 0.1% lower after Wall Street was smashed overnight.
In the US, the Dow Jones and the broader S&P 500 both crashed 1%, while the tech-heavy NASDAQ recorded a huge 1.6% fall.
Oil prices gained, with Brent Crude Oil adding 1.4% to US$66.79 per barrel while WTI Crude rose 2%, to US$59.77 per barrel. (WTI stands for West Texas Intermediate and is the benchmark oil price in the US while the Brent crude oil price is more widely used in Europe.)
The Australian dollar has dropped against the US dollar and is currently buying 79.1 US cents.
- The spot iron ore price fell again overnight, losing 1.7% to US$56.18 a tonne, but there could be some light at the end of the tunnel for Australia's beleaguered miners. Fairfax media is reporting that Brazilian iron ore giant Vale is considering cutting production by as much as 30 million tonnes a year.
Vale's CEO for ferrous and strategy, Peter Poppinga, said on a conference call yesterday, "We are ready to reduce some production flows in the Southeast to optimise and increase our margins even more." In other words, cut production, so the commodity price recovers.
But will that be enough?
- Close to $20 billion has been wiped off the value of the big four banks, Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank (ASX: NAB) and Westpac Banking Corp (ASX: WBC), just this week, with fears that regulators may take action over a boom in property speculation.
Loans to investors grew by 10.4% in March, the highest rate since 2008 and above the threshold of 10% set by the Australian Prudential Regulation Authority (APRA) in December, to stop a property bubble building (excuse the pun!).
- Tweet of the Day
The major banks could face a tighter schedule to raise an estimated $25bn in capital https://t.co/gtgK6fEY16 pic.twitter.com/lPF1gqnNrf
Business Review (@aus_business) April 30, 2015Will the big four be forced to raise capital faster than expected?
- Stock of the Day – brought to you by the Motley Fool writers – Top Stock Picks for May. It's our ever-popular stocks of the month. If you want to know which stocks our writers are our favourites right now, you need to read this.
