The market is down 3 and holding up very well considering the fall on Wall ST and the SFE Futures suggesting a 75 point fall in the market this morning.
The Dow Jones closed down 208 points on Friday – 2Q US DGP increased at a better-than-expected 3.4% annual rate, economists had predicted a 3.3% increase. Within the number was a fall in Consumer spending growth from 3.7% last Q to 1.3%. Considering the recent concerns that consumer spending could be affected by the housing market weakness it was not what the market wanted to hear. It was the worst week for the Dow Jones and S&P 500 index in five years.
Resources mixed but the big ones doing OK today…BHP up 40c to 3638c and RIO up 60c to 3100c. Good start considering BHP and RIO were down in ADR form, 3% and 2.6% respectively. Metals mostly down on Friday, Nickel down 2.5%, Copper down 0.2% and Zinc 0.8%. Aluminium up 0.7%. Most nickel stocks getting a bit of a belting. Zinifex down 6c to 1904c. Oil price up $2.07 to $77.03 after better-than-expected GDP figures eased concerns about demand for commodities. Woodside down 1c to 4300c. Gold down $2.70. Newcrest down 5c to 2470c.
The Australian results season starts proper this week with Alumina (AWC) interim results on Wednesday. The main results this week are RIO’s interims on Thursday. We also have a heap of Economic numbers out this week, main numbers are probably the US employment numbers of Friday and Q production reports from the companies out this week with ROC Oil’s numbers due tomorrow. The US results season has peaked but continues. For a results diary go to the Marcus Today newsletter.
- Another potential twist to the Consolidated Minerals (CSM) takeover story – Palmary Enterprises has revealed itself as the 12.2% stake buyer on Friday. CSM down 32c to 364c and TTY down 1c to 101c.
- Australand Property (ALZ) down 4c to 226c after they announced a net profit after minority interest of $119.6m for 1H07, up 34% from last year.
- Macmahon Holdings (MAH) down 4c to 126c, there is talk that rival Leighton Holdings wanted to acquire a significant stake in MAH via a share placement as part of a deal to create a sort of JV capable of bidding on projects – but MAH rejected the proposal saying it wasn’t in the best interest of shareholders. LEI up 83c to 3773c.
- Citigroup have upped their target price on Seek Ltd (SEK) by 30% to 1000c from 700c and maintained their “Buy” recommendation. SEK up 13c to 860c.
- CSL Ltd (CSL) up 80c to 8845c after they announced on Friday they will start selling their Privigen immune system treatment in the 1Q of 2008 after it was approved for sale in the US.
- JP Morgan say 120c could be added to Qantas (QAN) share price on the back of their upcoming restructure. QAN unchanged at 556c.
- The Volatility (VIX) index in the US is at its highest since April 2003.
We have another instalment in our “Idiots Guide to Building an Australian Equities Portfolio” in the newsletter today – it addresses Step 3 – the question of whether you should be doing it yourself. Step 4 is how to do it yourself without doing it yourself and without having to trust some well dressed BMW driving 26-year-old wet behind the ears stockbroker who never rings you.
THE MORNING MARKET REPORT is provided by the MARCUS TODAY daily stockmarket newsletter. You can subscribe for a free five-day trial here.
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