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Monday, 1 June 2009

A quiet start to the week

by Marcus Padley

The market is up 34. We have rallied on a stronger than expected China PMI number this morning having been down 8 early on. The SFE Futures suggested a 46 point rise in the market. Quiet start to the week on the news front. GM is expected to go bust in the US tonight and there are suggestions the late rally on Wall St was end of month short covering and will be lost tonight.

Dow up 96– Dow up 2.7% on the week – NASDAQ up 4.87% on the week. A late rally was described as an end of month short covering rally that is not representative of “the trend”. In other words that it could reverse tonight. Metals up, Oil up, Gold up and Aussie dollar now over 80c.

A quiet start to the week…

  • ANZ Bank (ANZ) says it has completed 90% of its wholesale term funding task for the year. It has completed $19bn in the fiscal year to date.
  • Rio Tinto (RIO) has extended its deadline by Chinalco must confirm whether it will participate in the second stage of its Yarwin alumina refinery in QLD.
  • Qantas (QAN) and Woolworths (WOW) will begin a loyalty partnership with customers earning one frequent flyer point for every dollar they spend above $30 in a single transaction at Woolworths.
  • Fortescue Metals (FMG) announces a $US1.18bn profit for the first 9 months, compared to a $US767.6m loss last year. Revenue came in at $US1.4bn. Gross profit was $US496.8m. The result was pumped up by $US2bn adjustment to its subordinated loan note.
  • Jabiru Metals (JML) in a trading update.
  • Kagara Zinc (KZL) in a trading halt until Wednesday pending a capital raising.
  • PaperlinX (PPX) in a trading halt - planning to sell Australian Paper.
  • Sedgman (SDM) has secured $80m operating contract for Coppabella and Moorvale mines.
  • Ramelius Resources (RMS) has appointed a new chief operating officer after its MD announces his retirement.
  • Metcash (MTS) announces a 2.6% increase in profit this morning to $202.5m - below analysts’ expectations of $217.8m. Declared a 14c dividend and says trading environment remains volatile.

In other news…

  • RBA meeting and decision on interest rates tomorrow…economists are expecting rates to remain at 3%.
  • Merrill Lynch says the Baltic Dry Index more than doubled since its April low to 4700, offering some hope to economies in recession.
  • Recession - The Q1 GDP number on Wednesday is expected to confirm we are in technical recession with a 0.2% fall adding to the 4th Q 0.5% fall.
  • Australian PMI hits a 7 month high. Up 7.4 to 37.5 in May.
  • Australian Retail Sales numbers up 0.3% in April – below expectations or a 0.5% rise.

The Dow Futures suggest 5 point fall on Wall Street tonight.

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

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