S&P 500was up by 1.01 points or 0.05% to 1878.04 on Friday. U.S. stocks rose a second week sending the Standard & Poor’s 500 index to a record as better than forecast data on hiring and manufacturing fueled optimism in the economy and overshadowed concern on Ukraine.

After investors piled into gold, crude and grains on last week as tensions escalated over Crimea, they have cautiously returned to stocks around the world. The jobs figures, from the US Labor Department were better than many had been expecting and marked a rebound from two weak months. It had been thought that the figures would be affected by recent harsh weather which had hit much of the country.


S&P 500 Daily Chart   (Source – Thomson Reuters)

S&P ASX 200 was up 16.4 points or 0.30% and closed at 5462.30 points on Friday. Soft results from big Western banks in Asia have underlined the challenging environment facing ANZ as a result of growing competition from global lenders targeting the region. Wesfarmers is exploring floating its insurance broking business in a potential $1 billion-plus deal amid buoyant demand and expensive valuations for broking companies.

Australian mining stocksare expected to come under pressure as iron ore prices slide to a six-month low and weak economic data gives investors new reason to doubt China’s ambitious growth target.


S&P ASX 200 Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:-

 

Code	Name	Price	Change	%Change
CRZ	CARSALES.COM LIMITED	$11.89	$0.86	7.80%
LEI	LEIGHTON HOLDINGS LIMITED	$20.72	$1.48	7.69%
SVW	SEVEN GROUP HOLDINGS LIMITED	$9.35	$0.55	6.25%
PDN	PALADIN ENERGY LTD	$0.61	$0.04	6.14%
HVN	HARVEY NORMAN HOLDINGS LIMITED	$3.31	$0.17	5.41%
MYR	MYER HOLDINGS LIMITED	$2.79	$0.13	4.89%

Stock of the Day – Iluka Resources (ILU)
Iluka resources is the leading global mineral sands miner with high grade low cost production mainly in Australia. It is the largest global producer of zircon and second largest producer of titanium dioxide feedstock. Low costs are underpinned by the high grade Jacinth Ambrosia mine in South Australia and Murray basin operations in Victoria.

Fourth quarter 2013 revenue was stronger than expected with better rutile and zircon volumes. A portion is seasonal with December quarter usually Iluka’s strongest. Conditions overall remain near cyclical lows. Iluka points to a stabilization in prices and pick up in sentiment, Chinese tile production, and leading economic indicators for US, Europe and china are cause for optimism. The lead indicators point to much awaited recovery coming in 2014.



Source - Iluka 
 
We remain positive on the outlook for mineral sands. We believe recent weakness in demand and pricing for both Zircon and titanium dioxide is largely seasonal. We see no evidence of structural changes to demands trends and with green shoots appearing in end markets we expect demand and pricing to rebound in CY2014.



Iluka Daily Chart  (Source - Thomson Reuters)
 
The market for mineral sands is volatile with few players. Demand is highly related to global GDP and accordingly prices can fluctuate significantly depending on customer sentiment and demand. To maintain  healthy margins in a weak market and to maximize value for shareholders Iluka manages its production and sales volume in line with market demand. We like the Iluka story but find the stock expensive at the current price.
 

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