S&P 500was down by 21.86 points or 1.17% to 1846.34 on Thursday. The Standard and Poor’s 500 index fell erasing a gain for the year, while Treasuries and the yen advanced on demand for haven assets as tension persisted in Ukraine. Copper declined as data from China missed estimates and gold reversed losses. Copper fell for the third time this week on growing signs of slower demand by the world’s top user. Copper for delivery in May slid 1.3 percent to $2.923 a pound in New York. Prices touched the lowest levels since 2010 yesterday.

Ongoing concerns about China’s growth and the fluid situation in Ukraine continue to linger on markets. The global concerns overshadowed U.S. data indicating an improving American economy.Retail sales rose in February for the first time in three months, and jobless claims unexpectedly fell last week to the lowest level since November, data showed. Americans ventured out to shop last month even as colder-than-normal temperatures and severe snowstorms blanketed parts of the U.S., showing the economic expansion is regaining momentum. 


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

 
S&P ASX 200was up 28.4 points or 0.53% and closed at 5412.60 points on Thursday. Royal Dutch Shell has restated its $US15 billion target for asset sales over 2014-15 in a statement ahead of a major investment briefing in London later Thursday, but has made no mention of plans for its stake in Woodside Petroleum. Communications Minister Malcolm Turnbull says the government could consider changing laws that restrict the number of foreign parties that can invest in Telstra by the end of the year.

TheNew Zealand dollar could hit ­parity against the Australian dollar for the first time in the Australian ­currency’s post-float history after the Reserve Bank of New Zealand’s interest rate cemented its status at the head of the global developed world’s economic cycle.


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

The top gainers on ASX 200 were:-
 

Code	Name	Price
SIR	Sirius Resources	$2.71
MML	Medusa	$2.61
HZN	Horizon Oil	$0.32
AQG	Alacer Gold	$3.39
AGO	Atlas Iron	$0.975

 
Stock of the Day – Harvey Norman (HVN)
Harvey Norman Holdings Limited is the franchisor of Harvey Norman, a leading Australian based retailer selling electrical, computer, furniture, entertainment and bedding goods. There are more than 230 Harvey Norman stores in Australia contributing to 62% of operating earnings. International stores are less significant to group earnings with New Zealand contributing additional operating profit of 17%, Slovenia 1.6%, Ireland -8.7% and Asia 3.3%.

The first half fiscal 2014 group revenue was up 3.6% to AUD 2.99 billion, with net profit after tax or NPAT excluding net property revaluations up 3.6% to AUD 117.4 million. International revenue benefited from a weakening Australian dollar while underlying Australian revenue gained just 1.4%. We view this as relatively weak sales performance in a period of rapidly rising housing activity as symptomatic of the structural head winds facing Harvey Norman as price sensitive customers go bargain hunting online or at competitors such as Bunnings and JB Hi Fi.


Source - Harvey Norman
 
We believe returns will materially diminish over the next five years as competition for revenue builds. The internet has empowered consumers to review and research product information and easily compare prices from around the world. We expect price to become a key differentiator when selling commoditized products and this will favour low cost retail model obtained either through scale or operating low cost online only business.



HVN Daily Chart  (Source - Thomson Reuters)
 
Harvey Norman lacks the scale enjoyed by its large competitors and operates under the relatively high cost structure associated with a large national store portfolio. We believe that the stock is too expensive at its current price and would review the stock at a later date.

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