The market is down 43. The SFE futures suggested a 57 point fall in the market this morning. All sectors down. Resources down 2% with BHP and RIO down 2.1% and 3.4% on lower oil and metal prices overnight. Only the gold stocks up on the $13.80 jump in the gold price. Small metals stocks mostly down.

The Dow was down 129. Down all session — finished off lows. Fears that the US’s AAA-credit rating outlook will be downgraded like the UK’s. Only financials up 0.2%. Initial jobless claims and manufacturing conditions data negative. 85% of companies down. BHP and RIO both down in ADR form overnight — 2.14% and 2.81% respectively. Treasuries down on fears around a depreciating US dollar. Monday is a public holiday in the US – US markets are closed.

Quiet day on our markets…

EXPLAINING THE RIO RE-JIG — RIO have gone back to Chinalco to amend the terms of their $19.5bn assets and shares purchase deal. They are trying to lower the coupon on the $7.2bn convertible bond issue to Chinalco, the suggestion being that they could now raise money in the debt capital markets at a better rate now the financial crisis has backed off. One year Credit Default Swaps were being issued at 8.05% when RIO negotiated its deal with Chinalco. They are now paying 3.3%. Commodity prices are also up with copper up 46% and a pick up in Chinese demand for iron ore also reduces the risk for RIO and should lower the cost of debt. Suggestions that the convertible bond should be re-priced from 9.5% to 7.5%.

  • Coca-Cola Amatil (CCL) at their AGM said they expect high single digit NPAT and EBIT growth in the 1H. Cost of goods are expected to rise but can be clawed back through pricing and product mix.
  • Macquarie Communications Infrastructure Group (MCG) notes that the Canada Pension Plan Investment Board (CPPIB) received FIRB approval to acquire all of the stapled securities of MCG.
  • InvoCare (IVC) posted sales revenue for the 4 months to April were up 7.5% on-year. Is also considering acquisition opportunities domestically and in the Asia Pacific region.
  • Virgin Blue (VBA) notes its revenue load factor in April fell 0.9 points from a year ago to 76.3%, despite a 3.3 point improvement across its core domestic Australian routes.
  • GWA International (GWT) has repaid the remaining $26m of financing with BNP Paribas — in advanced talks with other banks to increase its facility limits.

Other…

  • Credit Suisse up Tatts Group (TTS) to OUTPERORM from Neutral due to the recent share price decline.
  • Street Talk notes that Transpacific Industries (TPI) is expected to launch a $800m capital raising next week including a rights issue.
  • Merrill Lynch downgrade Paperlinx (PPX) to UNDERPERFORM from Buy and slash price target to 50c from 85c saying that demand across all its key paper markets is deteriorating with economic conditions worsening and the advertising spend falling. Cuts forecast EPS by 65%, 50% and 38% up until 2011.
  • WorleyParsons (WOR) and Woodside (WPL) downgraded by a couple of brokers this morning.
  • US dollar hit its lowest level this year.

The Dow Futures suggest a 9 point rise on Wall Street tonight.

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