The market is up 29. The SFE Futures suggested a 60 point rise in the market this morning.

The Dow Jones was up 153 – It moved in a large 211 point range and closed higher for the third consecutive session on the back of better-than-expected earnings results, in what was another very volatile session overnight. The Dow index was up 190 points and then fell into negative territory in the last hour of trading on talk that Goldman Sachs Group would release a negative announcement (presumably about hedge funds). When the company said the rumour was false, Wall Street then rallied closing up over 150 points.

Busy day

  • Telstra (TLS) DOWN 15c to 456c this morning (-3.18%) – Their final results are out. Profit $3.28bn (up 2.9%) – disappointing – bottom end – forecasts were for $3.23-3.49bn with consensus for $3.36bn up 5.7%. Final dividend 14c as expected – BUT they make no promises for future dividends. Most shareholders are in there for one reason, the dividend. They will not enjoy the lack of certainty.
  • The Adelaide Bank (ADB) and the Bendigo Bank (BEN) have announced a merger . Market cap of BEN is $2.285bn. Market cap of ADB is $1.559bn. In other words BEN is 50% bigger than ADB. The announcement has given the banking sector a rocket – as it did when BOQ had a crack at BEN earlier in the year. ADB now up 245c to 1685c. BEN up 35c to 1685c. Bank of Queensland (BOQ) has jumped as well…up 3,6% or 60c to 1718c.
  • Wesfarmers have announced some enhancements to the Coles offer and provided some reassurance on dividends and capex. Coles say they will consider the proposal. The announcement tends to suggest that both parties are keen to pursue the deal and should take some of the doubt about the deal not progressing out of the equation and reduce the Coles discount to the current offer. WES up 76c to 4073c. Coles up 30c to 1437c. The bid is worth 1544c.
  • Westpac Bank (WBC) have announced they are planning to list the BT Financial Group, their investment management division. WBC up 23c to 2640c.
  • PMP Ltd (PMP) have announced their FY07 NPAT – up a big 38% to $46.4m from $33.2m last year. PMP down 6c to 154c.
  • Centro Properties (CNP) up 22c to 839c after announcing a better-than-expected FY07 NPAT of $335.3m, analysts had expected $329m.
  • Biota (BTA) up 3.5c to 180c after they reported a profit, up from a loss a year ago.
  • Futuris Corp. (FCL) announced a 15% in FY07 NPAT to $100.7m. FCL up 5c to 242c.
  • Coca-Cola Amatil (CCL) announced a 23% increase in 1H07 NPAT of $140.9m. CCL down 24c to 880c.
  • News Corp (NWS) had their 4Q profit result overnight – profit up 4.5% to $890m from $852m a share. NWS 4c to 2654c.
  • The jobless number is out – 4.3%…steady from June and stronger (lower) than expected. On the back of that the A$ has ticked up (strong economy tends to suggest higher interest rates).
  • Macquarie Bank (MBL), the bellwether of attitudes towards the credit crunch is down 89c to 7760c this morning. Babcock & Brown is down 50c to 2555c.

We have a list of CHEAP STOCKS in the newsletter today – stocks in the ASX 200 and their one year forecasts, PE’s and yields.

Market comment: Have to say that despite the fact the market had a good day yesterday (marked up and then went up instead of down as it has done every mark up recently) the volatility in the US markets is still a sign that come a bit of bad news everyone is ready to hit the exits. It is a dangerous market, you never know what you are going to wake up to, when the bomb is going to go off. I wouldn’t even be buying for the long term yet. I’d prefer to pay more with a higher level of confidence than buy now with my fingers crossed and trusting to luck. Anyone who claims they know what is going to happen is lying. Brokers saying “Trust me” are lying. No one knows. Wait until you see tears in the eyes of traders or blue sky on the credit crunch before doing anything decisive.

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

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