The market is having another credit crunch mini correction – there are also worries about the unwinding of the Yen Carry Trade and the prospects of a 25bp interest rate rise this week after the RBA meet tomorrow. Market down 71 or 1%. Stocks like BNB, MQG (the new Macquarie Bank code) and AFG taking the brunt. The SFE Futures suggested a 25 point rise in the market this morning.

The credit crunch concerns emanate from a Wall St Journal article in the US on Friday suggested Merrill Lynch might be working with hedge funds to delay declaring losses on mortgage backed securities. Deutsche Bank also downgraded on concerns about $10bn of CDO related write-downs. Merrill Lynch fell 7.9%.

The Dow Jones was up 27 on Friday – It moved in a 186 point range and finished the week in a volatile but positive mood on the back of better than expected earnings results and upbeat economic news. Financial stocks have lost 6.2% in the past two sessions and are down 14% so far this year. Tech stocks had a good session; Apple and Google both closed in record territory and Intel put on 1%. Despite Thursday’s heavy falls, all three major indexes finished the week higher. The S&P 500 gained (up 1.7%) for the third week in a row, the Dow Jones put on 1.5% and the NASDAQ added just 0.2%.

Resources down but gold stocks holding up well. BHP down 81c to 4416c and RIO up 34c to 11130c. Metals mixed on Friday, Aluminium up 3.1%, Zinc up 1%, Nickel down 0.8% and Copper down 0.9%. Zinifex down 47c to 1569c. Oil price up $2.28 to $95.81 on talk that new U.N sanctions will be issued against Iran. Woodside up 6c to 5186c. Gold up $14.80. Newcrest up 60c to 3330c.

  • Coles Group (CGJ) Scheme Meeting is on Wednesday. Wesfarmers (WES) has been rallying into the meeting on hopes that when they actually get their hands on Coles and become the 8th biggest stock in the market (instead of the 18th) the international institutions will start to notice it and propel it again. The new Wesfarmers shares start trading on the ASX on a deferred settlement basis on 12 November (next Monday). WES up 13% in the past quarter. CGJ up 2c today to 1590c.
  • News Corp Final results come out on Thursday – as long as the A$ rises it will be tough to make money in the A$ quoted stock (because the A$ share price is slaved off the US$ quote so as the US$ falls the A$ price falls relative to the US$ price). Goldman Sachs has maintained their Buy recommendation and 3139c target price on the stock after BSky B reported an “operationally solid 1Q08 result”. NWS last traded at 2474c.
  • Nufarm (NUF) has agreed this morning to a $3bn takeover offer (1725c a share) from China National Chem and Blackstone Group. The AFR were onto it this morning suggesting a $4bn takeover. The consortium will allow NUF to pay their shareholders a dividend of up to 30c a share. Unlike Orica, something has materialized from all the takeover speculation. NUF out of its trading halt and trading at 1722c up 164c. It hit a high of 1752c.
  • Both Leighton Holdings (LEI) and Macmahon Holdings (MAH) announced this morning they have signed an agreement for Leighton to promote MAH as its “partner of choice” in joint ventures. Both parties benefit, it will help MAH expand into construction on the eastern side of Australia, and LEI will in return get written consent before buying a 19.9% stake in MAH. Leighton currently holds 15% of MAH. Both have been strong performers this year, LEI up 191% and MAH up 75%. MAH up 5.5c to 173.5c.
  • NIB lists on the ASX today – code NHF.
  • Macquarie Bank has changed codes today to reflect its restructure – Now MQG.
  • AND, BBP, BPO, BSG, CBH, CYG, ENE, PXS and STG all stage their AGM’s today.
  • Companies going ex-dividend include APR (1.37c) and TRU (24c).

There will be no MARCUS TODAY report tomorrow. We will be at the Melbourne Cup. Made the big mistake on Derby Day of pooling the betting money with a couple of mates. We turned $300 into $540 with one race to go. As always happens with a sweep, by the last race you’re on the wrong side of the Crown Lager and whatever money is left gets boldly put on some long odds dog on the nose. And that’s how we lost the lot. Sweeps – you either come away very rich or penniless… nothing in the middle.

Back on Wednesday… in slow motion.

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