The market is up 99. The SFE Futures suggested a 3 point fall in the market this morning. The market was down 8.45% from top to the bottom on August 6th. We are still 6.35% down.

The Dow Jones was down 31 on Friday – The market was down 212 at one point but rallied hard after the Federal Reserve’s decision to lend $38bn to banks to help credit markets regain confidence; it was their biggest injection since 2001 and was followed by similar moves in Japan, Canada, Australia and Europe (not the UK). A show of strength. Fridays concerted central bank intervention has returned “The Faith” to a lot of people…for today anyway. The US Fed said they will provide “reserves as necessary” to “facilitate the orderly functioning of financial markets”. For an explanation of what the central banks are doing in layman’s language go to the Marcus Today newsletter today.

  • The RBA gives its quarterly statement on monetary policy today. Comments on the credit crunch will be of interest. Otherwise they are likely to give a pretty much “on hold” statement.
  • There is a full results diary in the newsletter.
  • Crane Group (CRG) full year results are out. They are good. CRG up a big 94c or 5.7% to 1734c.
  • United Group (UGL) is up 3.5% after releasing their full year results. UGL up 33c to 1800c.
  • Telstra (TLS) announced they will launch their own nationwide mobile service in New Zealand. TLS up 2c to 436c.
  • Sonic Healthcare (SHL) have made another German acquisition. SHL up 63c to 1479c.
  • Macquarie have upped their iron ore price forecast – they now expect a 25% rise in iron ore prices this year up from 17.5%. A number of brokers have already raised their iron ore price forecast with some forecasting a 30% rise.
  • Boral (BLD) down 6c to 727c. They announced the acquisition of two building materials businesses in the US for US$80m, they are now the second-largest concrete producer in Oaklahoma City.
  • Sino Gold (SGX) has gone into a trading halt.
  • Fortescue Metals(FMG) is expected to replace Alinta in the ASX 100 on August 17th. FMG up 155c or 5% to 3284c.
  • Energy Developments (ENE) having a bad day, their shares are down 20c or 5% to 389c after announcing a significant increase in materials and labour costs at their West Kimberly Power Project, they expect further commissioning delays.

The market: We have the debate in the newsletter about whether we have seen the bottom of the market. I don’t think we have although I can see the market continuing to rally until the next big bad headline. I think you have to be aware that the central banks are concerned with the health of the banking system….not the subprime mortgage market, not the price of corporate bonds, not the losses people will make in hedge funds, not the level of gearing people have taken on in the bull market, not the unwinding of leverage. They are concerned with the banking system. They are not saying they are a safety net for making losses in bond markets, corporate bond markets, equity markets or hedge funds. They are not going to save people from themselves. They are not here to look after the people who have overgeared themselves to the downside in their pursuit of upside. We are on our own. The market are the markets. The central banks are looking after the integrity of the banks, not the markets. Don’t think they underwrite the hedge fund problems or the equity markets.

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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