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Published on: Thursday, December 15, 2016

  • Overnight, the US Federal Reserve, in a unanimous decision, hiked the fed funds target rate from 0.25%-0.50% to 0.50%-0.75%. The Fed commentary also suggested that rate hikes could come in 2017 at a faster pace than expected (three likely hikes in 2017, up from two previously). The FOMC statement said "Near-term risks to the economic outlook appear roughly balanced". In regards to inflation, "Market-based measures of inflation compensation has moved up considerably but still are low".
  • Tabcorp will refuse to take part in a break-up play for Tatts Group that was proposed by the Macquarie-led Pacific Consortium. According to the Australian Financial Review, Tabcorp will press ahead with its $11.3 billion merger proposal with Tatts Group, after Pacific Consortium launched a bid of up to $8.4 billion, which aims to win control of Tatts Group’s lottery business. The Pacific Consortium wants to spin off the Tatts’ wagering and gaming businesses to either float on the ASX, or sell to another party. Tabcorp is understood to not want to sweeten its bid at this stage. 
  • Bellamy’s has had its request to suspend its shares until December 21 granted by the Australian Securities Exchange (ASX). The baby formula producer Bellamy’s – which was already in a trading halt – continues to work on a trading update for the market on its earnings outlook. Earlier this month, Bellamy’s share fell more than 50% on the back of a profit warning, and after going into a trading halt on Monday in order to release another update on Wednesday, the company asked for a suspension of its securities. 
  • In US economic data, producer prices rose 0.4% during November to be up 1.3% over the year. After being unchanged in October, the 0.4% increase was the largest gain in five months, amid rising costs for services. Economists polled by Reuters forecast a rise of just 0.1% last month. US retail sales rose 0.1% in November.
  • At 0646 AEDT on Thursday, the local SPI 200 share price futures index was down 10 points, or 0.18 per cent, at 5572 points.

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