The market is up 22 and drifting. It was up 60 points earlier on. Its pretty quiet on the news front. The calm after the storm of results last month. The SFE Futures suggested an 86 point rise in the market this morning.

The Dow Jones was up 91 overnight moving in a 177 point range and finishing higher for the third consecutive session despite lower-than-expected economic data and lingering concerns that subprime mortgage defaults could end up in recession. The Commerce Department said construction activity fell in July by 0.4%, and the Institute of Supply Manufacturing reported August as a slow month for manufacturers, the index fell to 52.9 from 53.8 in July, slightly lower than the 53 predicted by economists – all good for those looking for an interest rate cut at the Sept 18th FOMC meeting. Energy stocks had a good session after another jump in the oil price, Exxon Mobil closed up 1.7%, and financials finished higher despite Merrill Lynch cutting earnings forecasts for several banks after predicting a weaker US economy in 2008. The NASDAQ closed up 1.3%. One commentator said technology stocks are “the cheapest they’ve looked in 10 years”. Apple Inc. put on 4.1% on speculation that sales will exceed Wall Street’s expectations.

THE RBA LEFT RATES UNCHANGED – no surprise there considering the credit crunch, the fact that US rates are likely to drop this month and the fact that we had a rate rise last month (which was a bit of a surprise). Some brokers now expecting another RBA rate rise in November after the stronger than expected GDP numbers yesterday. It would be a bit rude if they did….right in the middle of the election. Very unlikely. Despite the RBA’s claims of independence, there is such a thing as good manners you know, some economists clearly oblivious.

Resources doing well…BHP up 39c to 3894c and RIO up 225c or 2.5% to 9626c. (RIO up 3.38% in ADR form overnight) Goldman Sachs JBWere say they prefer BHP over RIO due to the risks associated with RIO’s takeover of Alcan. They have a BUY recommendation on both companies highlighting copper, iron ore, coking coal and petroleum prices are entering a period of strong price growth, but aluminium and nickel prices are likely to remain flat. Metals all down overnight. Nickel down 3.8%, Zinc down 3.1% and Copper down 1.1%. Aluminium down 1.1%. Zinifex down 15c to 1707c. Oil price up 65c to $75.07 on the possibilities of the hurricane season intensifying and OPEC deciding not to lift production when it next meets. Woodside up 57c to 4612c. Gold up $9.60. Newcrest up 19c to 2459c.

  • The AFR says the Coles board will officially recommend the slightly re-jigged Wesfarmers takeover bid backed by an independent experts report. Should be positive for Wesfarmers. WES and COLES now in a trading halt pending an announcement. CGJ last traded at 1424c and WES 3858c.
  • A company owned by Russian Billionaire Victor Rashnikov (a personal friend of Putin) has asked Federal government (the FIRB) permission to lift its stake in Fortescue Metals from 5.37% to 15%….he wants to secure iron ore supplies for his companies steel plants in Russia – he supplies 17% of Russian domestic steel demand. Fortescue still 14.4% off its highs, up 81c to 3730c. They recently placed 14m shares at $36 raising $504m. The price dropped to 2504c last month in the correction. They hit an all time high in June of 4175c.
  • Equine flu has made it to Albury on the Victorian border with some front page headlines suggesting the Victorian Spring Racing Carnival is now under threat. Market seem unfazed – Tabcorp (TAH) only down 20c to 1514c.
  • Coates Hire (COA) has received an improved offer (presumably from Carlyle Group and bid partner National Hire) valuing the company at $1.6bn or 629c a share. They say the bid is highly conditional. The suggestion is that the original offer was 625c and COA said they wanted 650c. The stock fell 7% last Wednesday when they announced their profit result, management said then they had conducted a review of the takeover offers and all undervalued the company. COA up 35c or 6% to 590c.
  • Gindalbie Metals (GBG) is in a trading halt pending an announcement – the stock was up 27% last week and last traded at 180c. Chinese steel company Ansteel recently took a placement of stock.
  • 2 million new Chinese stockmarket trading accounts were opened in the first half of August.
  • Companies going ex dividend today include – APR, CTY, CYA, ENE, SNL, NWS, TGG and WTF.

We have the World Cup Rugby timetable and predictions in the Marcus Today newsletter today….the most important stockmarket event in four years. First game kicks off on Friday – France versus Argentina – Australia plays Japan on Saturday, the All Blacks play Italy and England play the USA. Australia are in a Group with Wales, Canada, Japan and Fiji. New Zealand are favourites paying $1.50 with South Africa second favourite paying $6.50, then France $8, Australia $9, Ireland $17 and England $16. England has South Africa in its Group.

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