US politicians finally reached an agreement on both the budget and the debt ceiling, bringing to a close two weeks of uncertainty. The ASX 200 kept its nerve throughout the whole fiasco and managed to defy market hype. For the week, the index closed up 91 points.
Commentary on US economic conditions in the Beige Book concluded the US economy was having difficulty adjusting to higher interest rates. The reality is the rise in the 10-year Treasury yield since May of this year has confirmed the fear of US policy makers – consumers simply can’t tolerate higher rates.
The Federal Reserve has been explicit that their decision on monetary policy is data dependent. Until underlying economic data improves, quantitative easing will remain in place.
Treasury yields were quick to reflect the expectation of continuing monetary policy stimulus, with the yield falling to 2.59 per cent, down from a high of 2.73 per cent only earlier in the week.
Rio’s September quarter production results confirmed a record amount of iron ore shipped. This was welcome news to investors as there has been concern over the immediate demand from China.
Rio, along with other iron ore miners have enjoyed a higher iron ore price than initially anticipated for this time of the year. This combined with a turnaround in data coming from China is adding to the renewed interest in the miner and mining stocks in general.
Beyond iron ore, Rio also upgraded mined production guidance for copper by 4 per cent and thermal coal by 5 per cent.
Ten’s results and forecasts highlighted weaknesses in their programming for the financial year gone, consequently their ratings position has slipped Ten reported television revenue fell 13.3 per cent against broader market growth of 0.6 per cent.
To claw back ground on ratings Ten has a 2014 program schedule titled heavily towards sport, with Big Bash Cricket and Winter Olympics the crown jewels. The aim is to appeal to their target demographic, the younger end of the 25 to 54 year old bracket.
Beyond programming, Ten is facing the same difficulties felt across traditional broadcast media as the rise of the digital world is changing the way end users consume media.
Since reporting on Thursday morning, Ten lost 3.4 per cent in the final two days of trade for the week.