The market is down 6. Yawn. The SFE Futures suggest a 10 point fall in the market this morning.
The All Ords is now up exactly 1000 points since the bottom of the recent correction on August 16th. The top 25 performing stocks in the ASX 300 since then have ALL been resources stocks.
The Dow Jones closed 19 overnight – It moved in a 91 point range and closed slightly higher despite disappointing economic data and energy stocks losing ground after the oil price went backwards for the third consecutive session. It was an uneventful session; the Dow index was down 60 at one stage and did well not to finish in the red considering the lack of positive news. The Consumer Confidence Index for September fell to its lowest level in nearly 2 years, Target Corp. and Lowe’s both cut their sales forecasts, and the National Association of Realtors said sales of existing homes fell in August for a sixth straight month to a five year low. The market is expecting more rate cuts by the Federal Reserve before the end of the year, futures contracts suggest an 88% chance of a 25bp cut at the October 31 policy meeting, up from 72% yesterday. The futures are also pricing in a 74% chance of another 25bp rate cut at the December 11 meeting. The NASDAQ reached a 2 month high, put on 0.6% and finished at a six-and-a-half-year high.
Resources mixed today…a bit a steam coming out of the BHP share price. They have put out their annual report including the expected resources upgrade for Olympic Dam. Resources upped to 7.74 billion metric tons from 4.43 billion tons a year ago. Copper metal resource up 38%. It isn’t setting the stock alight. The stock is up 8% in a couple of days partly in anticipation of the upgrade and the comment this morning is that the upgrade was well flagged and the buying overdone. An overnight fall in most resources stocks hasn’t helped. This morning BHP is down 95c to 4365c. Merrill Lynch maintain their “Neutral” recommendation on BHP. RIO down 114c to 10690c. Metals mostly down overnight, Aluminium up 1.9%, Nickel down 1.7%, Copper down 0.6% and Zinc was unchanged. Zinifex up 2c to 1767c. Oil price down $1.31 to $81.20 after a storm in the Gulf of Mexico failed to cause any damage. The Saudi Arabian oil minister also said overnight that energy markets are “in turmoil”. Woodside down 50c to 4860c. Gold down 50c. Newcrest up 52c to 2780c.
- According to the AFR, Asciano (AIO) and Macquarie Bank (MBL) will be making a combined $20bn takeover bid for Brambles (BXB). The paper reports that both companies are taking advantage of stabilizing credit markets and are seeking funds only seven weeks after BXB revealed that AIO and Toll Holdings (TOL) had been buying shares. BXB up 20% in the past quarter to 1424c…up 30c today. A bid price is expected to be $17 if it comes. Toll Holdings down 18c to 1312c. Asciano up 3c to 893c. BXB is three times the size of AIO.
- David Jones (DJS) earnings numbers are out – analysts were right on the money, FY07 NPAT up 35% to $109.5m. Dividend surprised a few, up 13c from 9c last year, (up 44%) beating analysts expectations of 11c. Solid result, profit margins exceptional for a retailer, up 39.3% from 38.8% and the CEO Mark McInees confirmed FY08 guidance. DJS up 46% in the past 12 months. DJS unchanged at 495c.
- Nufarm (NUF) result also out – not good – Operating profit before one offs down to $120.9m from $121.1m last year mainly due to the drought. Result was 7% below guidance. The company forecast profit close to $145m in FY08 below broker forecasts of $155m. The stock has been doing well lately, up 5% in the past week and up 13% in the last month. NUF down 5.8% or 89c to 1445c.
- Centrex Metals (CXM) had a big day yesterday, the stock finished 22% higher after China’s Baotou Iron & Steel Group said want a stake in their Bungalow iron deposit and are willing to spend around $40m to earn it. Up 0.5c to 51.5c today.
- St. George Bank (SGB) announced this morning they have entered into a partnership with BP to have SGB branded teller machines in BP’s petrol stations. SGB up 4c to 3470c.
- Foster’s Group (FGL) Chairman Frank Swan has announced his retirement effective October 31, straight after the annual meeting. He has had a good run, he joined the board in 1996 and was appointed chairman in 199. He will be succeeded by David Crawford, who has been with the company since 2001. FGL up 6c to 654c.
- Companies going ex-dividend today include: CAF, IDL, QMT, RHC, SMY, SRL.
In today’s edition of Marcus Today we look at some statistics behind the market’s 1000 point rise since the bottom of the correction and how some stocks have performed since they hit the bottom.
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