Morning (AM) Market Report

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Published on Wednesday, 31 August 2016 00:00

U.S. stocks finished lower overnight after comments from Federal Reserve Vice Chairman Stanley Fisher indicated there may be more than one interest-rate increase in 2016.

Wednesday, 31st August, 2016

Apple was the biggest drag on U.S. stock indexes after antitrust regulators ordered the company to pay about $14.5 billion in back taxes to the Irish government. However, this was partially offset by gains in bank shares, media reports said. Trading was typically light ahead of the U.S. Labor Day holiday.

At the closing bell, the Dow Jones was down 0.3%, while the S&P 500 and NASDAQ were both down around 0.2%.

The European Commission has ruled that Ireland gave illegal tax benefits to Apple (AAPL) and the company has now been issued a EUR 13 billion ($14.5 billion) tax bill. The timing and amount of the final payment remain uncertain. Mondelez (MDLZ) disclosed it is dropping its pursuit of Hershey (HSY). It has been rumoured the initial offer price was raised to $115 per share (from $107 originally) which equates to $27 billion or 15 times EBITDA, however, this was still viewed as a bit low.

For Australian ADRs listed on the NYSE, BHP Billiton declined 72 cents (-2.24%) to $31.49, ResMed fell 68 cents (-1.00%) to $67.22, Telstra Corporation lost 27 cents (-1.34%) to $19.89 and Westpac declined 33 cents (-1.45%) to $22.37. At 7:45 am (AEST), the 10-year Treasury note yield was 1.57% and the 5-year yield was 1.18%.

European markets were mixed on Tuesday. The FTSE 100 fell 0.2%, while the French CAC 40 and Germany's DAX rose 0.7% and 1.1%, respectively. Asian markets were also mixed. The Hang Seng and Shanghai Composite rose 0.9% and 0.2%, respectively, while the Nikkei 225 fell 0.1%. India's Sensex rose 1.6%.

Ahead of the local open, SPI futures were 6 points higher at 5,645.