BHP to grow by 70% without a commodities rally… I would like to see that…

Good Morning,

No morning or afternoon note yesterday as we were on the road, but this is what we like to wake up to!

Dow +222 points, Oil +3%, SPI + 29 points….

Go downstairs and grab your morning coffee, we should have a great day today…

So BHP has come out stating that they will grow by over seventy percent without a commodities rally….

How are they going to do that?

Cut CAPEX? Cut spending? Cut wages? Cut production?

All may lead to a reduction in their cost base, however, with no pick up in revenues, it will be fairly difficult, right?

US stocks rose across the board on Tuesday (Dow up 222 points), with a jump in oil and a rally in helping propel the S&P 500 to its best day in two months.

Buoyed as well by higher global stock markets, Wall Street's gains appeared to breathe new life into a two-month rally that had petered out in mid-April, and left the S&P 500 with an increase of nearly 2 per cent for 2016.

Amazon jumped 3.43 per cent to a record of $US703.07, giving the biggest boost to the S&P 500 and the Nasdaq. Bernstein raised its price target on the stock to $US1000, the highest on Wall Street, saying it believes Amazon's margins will expand much faster than currently expected.

All 10 major S&P sectors gained and seven of them were up over 1 per cent, led by a 1.75 per cent rise in the energy index.

What's on today?

Local data: Home loans March, investment lending for homes March, NZ business PMI April, NZ food price index April

Local earnings: CSR full year results

Foreign ministers of Russia, Ukraine, Germany and France meet in Berlin to revive momentum on a peace plan for eastern Ukraine - Brazil's lower house of Congress votes on the impeachment of President Dilma Rousseff - The World Economic Forum on Africa starts in Kigali, Rwanda - UK Chancellor of the Exchequer George Osborne is questioned by the House of Commons Treasury Committee about a report predicting "permanent damage" to the economy in the event of a vote to leave the European Union on June 23 - Jefferies hosts its Global Technology, Media and Telecom Conference through May 12 in Miami -US Energy Information Administration Administrator Adam Sieminski presents the agency's International Energy Outlook for 2016 at the Center for Strategic and International Studies in Washington

Overseas data: South Korea jobless April; Portugal inflation April and jobless first quarter; UK industrial output March, US budget statement April

Earnings: CA, Macy's, Deutsche Post, Alstom, Bilfinger, TUI, Vivendi

Stocks in focus

BHP Billiton has unveiled plans to expand by 70 per cent "even without a significant recovery in commodity prices".

The SPI is up 29 points this morning.


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