Markets Live: ASX like a 'well-oiled machine'

Markets Live has once again finished for the week, thanks for tuning in, we'll see you next week starting Tuesday at 9.30am. Have a fantastic long weekend.

Click here for a full wrap of today's session.

As mentioned previously, the financial sector was the biggest lifter on the market today, with all the big four banks posting gains.

  • BHP: -0.2%
  • Rio: -0.3%
  • ANZ: +0.3%
  • CBA: +0.6%
  • NAB: +0.6%
  • Westpac: +1.7%
  • Fortescue: -1.5%
  • Woolworths: +1.4%
  • Wesfarmers: -0.2%
  • Telstra: +0.4%

Well it looks like Linc Energy's dream run has come to an end, after posting gains or 12.7 per cent and 32.9 per cent in the two previous sessions, the energy company has finished down 13.1 per cent today, despite being up by 12 per cent earlier in the day.

Looking back, here are the best and worst performers from this generally positive week on the ASX:

Apple expanded internal audits of suppliers and identified a Chinese labor agent hiring underage workers as the world’s most-valuable company moves to boost conditions for people making iPhones and iPads.

One manufacturer employed 74 children younger than 16, and 158 facilities lacked procedures or didn’t perform adequate audits of their own suppliers, according to the annual Supplier Responsibility Report released today by Apple.

“Underage labor is a subject no company wants to be associated with, so as a result I don’t believe it gets the attention it deserves, and as a result it doesn’t get fixed like it should,” Jeff Williams, the company’s senior vice president of operations, said in an interview.

Apple, which joined the Fair Labor Association last year after being criticized for working conditions at suppliers such as Foxconn Technology Group, doubled the number of employees trained in worker rights, laws and safety.

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Among the sectors, financials pushed up 0.8 per cent, consumer discretionary jumped 0.7 per cent, while consumer staples and telecommunications both added 0.5 per cent.

Materials and gold miners bucked the trend, down 0.4 per cent and 1.6 per cent respectively.

The sharemarket has closed at a 21-month high, buoyed by strong gains in the financial sector. The benchmark S&P/ASX200 jumped 25 points, or 0.5 per cent, to 4835.2, while the broader All Ords added 25.1 points, or 0.5 per cent, to 4858.9.

ASX

The Australian sharemarket has operated akin to a well-oiled machine throughout January, says CMC Markets trader Tim Waterer:

  • That trend was evidenced again today with the ASX200 pressing higher courtesy of another positive offshore lead.
  • International manufacturing data has propped up investor enthusiasm which is serving to drive the local bourse toward the 4850 level.
  • The impressive thing about our market performance this week is that despite the solid data from China, we have not been reliant on significant moves by the mining giants (BHP and Rio) to propel our market well north. Instead it has been a more well-rounded performance by the local market.
  • US new home sales data will be eyed closely tonight and a result approaching 390k here should satisfy traders enough to continue the buying theme.
dollar

The Australian dollar is nursing losses against the US dollar and the euro as investors trim long positions, but has regained enough ground on the yen to put it on track for a 5 per cent gain in January.

The dollar is buying $US1.0446, near a three-week low of $US1.0438 hit earlier and down from above $US1.05 yesterday, and 78.19 euro cents, from just below 79 cents.

Joseph Capurso, a strategist at Commonwealth Bank expected euro strength to continue well into next week, having already gained more than four cents in two weeks.

"There is a lot happening next week in America (FOMC meeting and jobs data) and if there is any downside surprises, you could see the euro rise even more," he said.

The dollar is holding hefty gains versus a broadly-weaker yen with the Aussie steady at 94.52 yen, on track to post nearly 5 per cent in gain this month. It scaled last week its highest since 2008 at 95.02.

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Some more on the Penrice chairman's call for the 'two-strikes' rule to be axed, tweeted by shareholder activist Stephen Mayne (@MayneReport):

Don't listen to returned Penrice Soda chair's bleatings about 2 strikes. It forced him to fully engage with investors & take hard decisions.

The Rudd-Gillard "two strikes" corporate voting regime will go down as one of their best reforms. It has unwound exec pay excesses.

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The directors of Penrice Soda have called for the ‘‘two-strikes’’ rule to be revoked after avoiding going down in history as the first board dumped under the contentious rule.

Chairman David Trebeck and his deputy Andrew Fletcher were both re-elected after receiving 78 per cent of a historic board re-election vote at an extraordinary general meeting convened in Adelaide today.

Both men had already created a bit of unwanted Australian corporate history, with the small Adelaide-based chemicals manufacturer the first to have faced a board spill after shareholders rejected the company’s remuneration report two years in a row.

‘‘Ideally, the two-strikes policy should be terminated,’’ Mr Trebeck said. ‘‘Shareholders who are sufficiently disgruntled with the performance of the board can always muster the numbers to requisition an EGM and move against some or all directors – as happened with Penrice in 2009.’’

The ‘‘two-strikes’’ rule was designed to deliver shareholders a greater say in the executive remuneration policies of large corporates, particularly as pay packets bulged often at odds with diminishing shareholder returns.

china

China created 12.7 million new jobs in urban areas in 2012, the Ministry of Human Resources and Social Security, said on Friday.

The increase from 2011's 12.2 million new urban jobs left China's urban jobless rate steady at 4.1 per cent at the end of 2012 - the 10th straight quarter officials say it has been at that level.

The urban jobless rate is China's only official unemployment indicator, but analysts say it grossly underestimates the true level of unemployment because it excludes about 250 million migrant workers from its surveys.

The National Bureau of Statistics said last week that China had created 11.9 million jobs in 2012 in urban areas. The differing numbers highlight the discrepancies in China's employment data which feed analysts' doubts.

The yen is headed for a record stretch of weekly losses against the US dollar as data showing a decline in Japanese consumer prices added to the case for further monetary stimulus from the central bank.

The Japanese currency touched a 2 1/2-year low before Bank of Japan Governor Masaaki Shirakawa speaks today. His policy board announced open-ended easing and a 2 per cent inflation target this week. Deputy Economy Minister Yasutoshi Nishimura said yesterday the currency’s decline isn’t over and a level of 100 versus the US dollar wouldn’t be a concern.

The US dollar is currently trading at 90.5 yen, while the Australian dollar is fetching 94.5 yen.

With just under an hour of trade left on the ASX, here's how the rest of the region is performing:

  • Japan(Nikkei): +2.2%
  • Shanghai: -0.3%
  • Taiwan: -0.6%
  • South Korea: -1.3%
  • Singapore: +0.2%
  • New Zealand: +0.2%

And a bit more on Apple, Motley Fool's Scott Phillips writes only the brave would bet against Apple.

While growth might have underwhelmed investors, Apple still managed to ship 29 per cent more iPhones and 48 per cent more iPads than the same quarter in the previous year. I don't know any CEO who'd turn down the opportunity to deliver that sort of growth.

In addition, Apple chief executive Tim Cook cited shortages of both iPhone 4 and iPhone 5 during the quarter, as well as its iMac laptops, which constrained sales growth.

And while Apple may or may not regain its previously stratospheric growth levels, the company's shares aren't priced for that requirement. Those of us who have been investing for a while can remember when technology companies were trading at 100 times earnings (or even 100 times sales back at the height of the dot.com boom).

Click here for the full story.

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Here's an interesting graphic tracking Apple and Samung's stock price performance over the last year. As you can see it's been a rough 12 months for Apple, could their time at the top be over?

More on average hours worked, BusinessDay's Glenda Kwek has pulled together some OECD data on global averages.

Data collected by the Organisation for Economic Co-operation and Development (OECD) for 2011 showed that Germans worked an average of 27.2 hours a week, while Americans worked 34.4 hours per week.

In Greece, where unemployment is soaring, the workforce put in an average of 39.1 workers a week. The OECD average is 34.2 hours worked by employees per week for 2011.

Here's a link to the OECD data.

michael-pascoe_127x127

This week, the spotlight has been firmly on Japan, now BusinessDay's Michael Pascoe is weighing in on the matter.

Filial and grand-filial loyalties run deep in Japan. It's just one of the reasons there are concerns about Japan's jump to the right with Shinzo Abe's election. He has the numbers and perhaps the experience to attempt more in his second term of government.

The politics of chopstick rattling over a few isolated rocks in the East China Sea are another complication in considering the Abe government's big stimulus gamble, highlighted this week by the Bank of Japan's announcement of open-ended money printing and moving from an inflation goal of 1 per cent to an inflation target of 2 per cent.

Along with Abe's pledge of increased fiscal stimulus – yet more infrastructure spending that inevitably comes with suspicions about more bridges to nowhere – a massive amount of money is being thrown at trying to blow Japan out of a couple of decades in the doldrums.

Click here for the full story.

Clients of financial advisers will find it easier to determine if they are getting value for money under new guidelines issued by the corporate watchdog.

Advisers will be required to issue a fee disclosure statement to clients from From July 1, 2013, as part of new reforms being introduced across the financial services industry.

The disclosure statements will include information about the fees being paid by a client, the services that client has received, and the services that client was entitled to receive, the Australian Securities and Investments Commission (ASIC) said today.

All Nippon Airways, which has the biggest fleet of Boeing 787 Dreamliner jets, today cancelled another 78 flights scheduled for January 29-31 - bringing total cancellations at the Japanese carrier since one of the planes made an emergency landing on January 16 to 459.

All Dreamliners have been grounded since January 17 due to unexplained battery problems.

ANA, which has 17 of the 50 Dreamliners that Boeing has delivered to airlines to date, said the cancellations have affected more than 58,000 passengers, adding it would announce on Saturday which flights it will not run from February 1.

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