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Monday, 19 October 2009

Dollar and market down

by Marcus Padley

The market is down 58. The SFE Futures were down 14 this morning.

Wall St. closed down 67 on Friday. The Dow was down 1 at best and down 123 at worst. Dow closes below 10,000. It first went above 10,000 10 years ago and has crossed above it 25 times since. The record high was 14,164 in October 2007. Both Oil and Gold finished higher. Gold up 90c to $1052 and the Oil price up $1.01 to $78.59. The Aussie dollar fell to 91.41c. It was weaker than expected results that did most of the damage.

Bernanke talks tonight — thought likely to talk up the US$ but retain a reluctance to raise rates yet to support it. The market is factoring in the first US interest rate rise in the 2nd Q of next year.

Making the news today…

  • Talk of Macquarie Group (MQG) acquiring Toronto-based broking firm Blackmont Capital. MQG down 2.05% to 5396c.
  • TABCORP Holding (TAH) has held its AGM this morning. CEO Elmer Funke Kuppe said sales increased by 4.4% during the 1Q FY10 and that conditions are expected to remain challenging for the remainder of the year. TAH up 3c to 717c.
  • Street Talk makes mention of Primary Healthcare (PRY) buying a minor stake in health insurer NIB Holdings (NHF). PRY now holds 13m NHF shares or 2.6% of the company. PRY down 3c to 619c and NHF up 1c to 126.5c.
  • Energy Developments (ENE) announces it has received a $415m takeover offer from private equity group Pacific Equity Partners but its directors consider the offer inadequate. P.E.P has made an incomplete offer of 265c a share for 100% of the company. ENE up 4.5% to 252c.
  • Marion Energy (MAE) in a trading halt. MAE last traded at 18c.
  • Rates may not go up in November — Alan Mitchell in the AFR (one of the most listened to RBA commentators) suggests that a November RBA interest rate rise is not in the bag and that Glenn Stevens is keeping his options open to raise interest rates “gradually”.
  • The strategist from Credit Suisse, Atul Lele is in the AFR this morning (Page 19) with a negative call on the banks. He says Banks are now as expensive as they have been in 15 years, compared to industrials, and in the case of ANZ, and possibly with others, the market cap, fully diluted for recent issues, is now higher than it was before the GFC. There is talk around that as much as $8Bn of provisioning made by the banks could be ‘reversed’ in the next year.
  • Orica (ORI) reiterated its FY10 underlying profit which is expected to be up 15%. ORI down 47c to 2378c.
  • The Myer Offer closes at 5pm on Friday.

The Dow Futures were down 35 at midday.

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

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