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Wednesday, 15 August 2007

Morning Market Report

Marcus Padley, sharemarket analyst and author of the Marcus Today daily newsletter, reports:

The market is having a bad day…again…down 108. The good news is that its 30 points off its lows. The SFE Futures predicted a 77 point fall in the market this morning.

The Dow Jones had another dismal session last night closing down 207 – It fell all day, closed on its lows. Moving in a 251 point range it closed down for the fourth consecutive session on the back of ongoing concerns about credit markets… this time from Sentinel Management Group which has $1.5bn in assets.

Resource sector suffering more than the market down 3.2% against a market down 1.8%…BHP down 133c or 3.8% to 3375c and RIO down 289c or 3.4% to 8316c. Metals mostly down overnight.

A few results out today -

  • The Commonwealth Bank of Australia (CBA) final results are out. Slightly better than expected – top of the range. The share price is down 50c to 5350c or down 0.9%, not bad against a market down 122 or 2.1% at the moment..
  • Ansell (ANN) down 25c to 1115c after announcing a 14% fall in FY NPAT.
  • Boral’s (BLD) FY07 NPAT came in as expected. BLD down 3c to 724c.
  • Lend Lease (LLC) have announced their FY07 results. LLC down 27c to 1759c.
  • Computershare (CPU) announced a 72% increase in NPAT. CPU down 25c to 889c.
  • Reject Shop (TRS) down 20c to 1256c after results.
  • There is some positive JB Hi-Fi (JBH) broker research out this morning. JBH only down 5c to 1130c.
  • The Dow Jones technical analyst David Rogers says the market is going to 5600 against 5858 now. The ASX 200 is down 9.98% from the top. In the LTCM crisis it fell 16%. If it fell to 5600 it would be down 13% and to match the LTCM fall it would have to go to 5400.
  • We have US CPI numbers tonight for July. They are expected to be up 0.2%.
  • Uranium has just hit its lowest level since March. Paladin is now 48.7% off its year high, ERA 41.3%, Deep Yellow down 47.1%. That’s just the big ones. Easy come….easy go.
  • Today in the US (Wednesday) is the last day for many hedge fund investors to put in their redemptions for the 3rd Q.

We have a short article in the Marcus Today newsletter today looking at the VIX (volatility) Index in the US. A chart over the last 10 years highlights the rise in volatility during the Asian crisis, the LTCM collapse, the Russian debt crisis, 9-11, the build up to the Iraq War and now. It also shows how the bull market over the last 4 years has seen increasing confidence and reduced volatility until recently. The recent rise in volatility also highlights that the current correction is the biggest threat to the bull market since it began in 2003 and dwarves all the corrections in the last 4 years in terms of significance.

THE MORNING MARKET REPORT is provided by the MARCUS TODAY daily stockmarket newsletter. You can subscribe for a free five-day trial here.