Will the silver donut deliver?

Good Morning,

Today is the silver donut’s day…

No, we’re not talking about Homer Simpson, we are talking about Macquarie Bank.. who releases their FY results.

Unlike the Big 4 Banks, Macquarie’s earnings are largely based on deal origination, equity capital markets (ECM) and their fixed income and funds management businesses.

Macquarie has done exceptionally well in diversifying their income streams in mortgage broking via Yellow Brick Roads (YBR), its investment in shopping centres and airports…

The key to Macquarie’s earnings will be whether the cost of funding has increased and we will be closely watching their cash, payout ratio and margin position…..

Last night, US stocks were little changed (Dow +9 points), ahead of Friday's key employment data, as declines by retailers and defensive shares overshadowed a rebound in energy companies.

Retailers slid after L Brands posted preliminary first-quarter profit that trailed estimates. 

"Sentiment is more negative than I would've thought after such a strong rally off that February low," said Charlie Bilello, director of research at New York-based Pension Partners LLC. "This is a normal kind of digestive period or consolidation after a strong move and ahead of the jobs report tomorrow." 

This is what we can expect today in Oz:

·         SPI futures down 48pts or 0.9% to 5218 at about 6.15am Sydney time

·         AUD up 0.1% at 74.60 US cents, 80.05 Japanese yen, 65.46 Euro cents and 51.53 British pence 

·         On Wall St, Dow flat, S&P 500 flat, Nasdaq -0.2%

·         In Europe, Stoxx 50 flat, FTSE flat, CAC -0.1%, DAX +0.2%

·         In London, BHP +0.8%, Rio +0.6%

·         Spot gold -0.2% to $US1276.58 ounce at 3.47pm New York time

·         Brent crude +1.1% to $US45.09 barrel at 3.21pm New York time

·         Iron ore +0.3% to $US60.25 a tonne

What's on today?

Local data: RBA quarterly statement on monetary policy

Overseas data: US April jobs report, US March consumer credit.

Overseas earnings: Berkshire Hathaway, Cigna, Exelon, ArcelorMittal

Rating updates:  Netherlands (Fitch), Portugal (Moody's), Turkey (S&P)

Stocks in focus

Local earnings: Macquarie Group

The SPI is down 48 points this morning.

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