The market is up 36. The SFE Futures suggested an 8 point rise in the market this morning.

The Dow Jones down 5.4 overnight – It moved in a 59 point range and closed slightly lower after the Commerce Department announced the latest estimate of 1Q GDP was 0.6%, slightly lower than the 0.8% economists expected and less than half of what the government had predicted a month earlier (1.3%). Solid earnings results supported Wall St overnight; Novell closed higher (6.3%) after announcing a profit result that was five times better-than-expected and Tiffany & Co. said big-ticket items were still in high demand after reporting a 15% increase in 1Q profits. A.G Edwards closed 14.3% higher after Wachovia announced it would buy the company for $6.8bn, and the NASDAQ had a good session finishing 0.5% higher.

Resources having a good day. BHP up 45c to 3198c and RIO up 81c to 9627c. Metals mostly up overnight, Copper up 2.4%, Zinc up 2.8% and Aluminium 1.2%. Nickel down 1.4%. Zinifex up 23c to 1783c. Oil price up 55c to $64.02 after the government announced refineries were running at 91.1% capacity, unchanged from last week and nowhere near the 0.6% increase analysts were expecting. Woodside up 56c to 4356c. Gold up $7.90. Newcrest down 5c to 2195c.

Good month in May…so much for “Sell in May and go away”. The ASX 200 up 2.39% — annualise that and the market is going up 32.7% pa. June is expected to be a good month as sellers go on strike…in other words no-one wants to take a profit before the end of the tax year because no-one has any losses to offset. June is traditionally a weak month followed by a strong July, although over the last ten years it has returned a strong 3.1% on average. Pretty quiet day on the news front otherwise…

  • Cemex is slightly closer to its 50% minimum acceptance level, they upped their holding in Rinker (RIN) to 39.4% from 37.4%.
  • The National Australia Bank (NAB) has gone ex dividend 87c this morning and is down 83c to 4157c.
  • Lots of research/commentary about Marius Kloppers this morning….the soon to be CEO of BHP Billiton (BHP). He starts on 1 October. Some of the adjectives/comments flying around include: smart, young, ambitious and a strategic thinker. Chip Goodyear on the other hand has been seen as “steady”. The hope is that Marius will make the more of the cycle with takeovers (of RIO?) an expectation.
  • ABN AMRO has upped their recommendation on Qantas (QAN) to a BUY and their target price to 655c after taking into the account the value from its frequent flyer and freight businesses. Since listing Qantas has underperformed the All Ords index by 15%. Prior to its rally in ahead of the takeover it was up just 44% since listing…underperforming the market by 93%.
  • Loads of upgrades for Sonic Healthcare (SHL) this morning after they announced the acquisition of Swiss pathology company Medica Labs for $98m yesterday. SHL up 24c to 1480c.
  • QBE Insurance Group (QBE) down 12c to 3110c, they announced this morning the completion of their US acquisitions of Praetorian Financial Corp and Winterthur US after receiving regulatory approval.
  • Property Trusts taking a breather today after yesterday’s big gains, Westfield (WDC) still going strong up 33c or 1.5% to 2178c.

Go to the MARCUS TODAY newsletter and sign up for a free trial to see the changes to the ASX 200 that will come into effect on 15 June 2007 and what they mean. The relevance of index inclusion is that passive (indexed) funds have to buy the stocks going in and sell the stocks going out of their benchmark indices and active fund managers (don’t have to hold all stocks) will have to sell the removals and consider the additions as investments. We also have a wrap up of the last month and a preview of June.

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

Peter Fray

72 hours only. 50% off a year of Crikey and The Atlantic.

Our two-for-one offer with The Atlantic was so popular we decided to bring it back.

But only for 72 hours.

Use the promo code ATLANTIC2020 and you’ll get 50% off a year of Crikey (usually $199) and a year of digital access to The Atlantic (usually $70). That’s BOTH for just $129.

Hurry. Ends midnight this Thursday.

Peter Fray
Editor-in-chief of Crikey

Claim Now