The market is down 5. The SFE Futures suggested a 14 point rise in the market this morning.
The Dow Jones was up 119 on Friday – It moved in a 182 point range and finished higher on the back of encouraging comments from both President Bush and Federal Reserve Chairman Ben Bernanke regarding the subprime mortgage crisis and the Fed willingness to act to head off a credit crunch. Speaking at the annual conference in Jackson Hole, Wyo., Bernanke said the Fed will “act as needed” to avoid the broader economy being damaged by the credit crises, and President Bush said he would assist those borrowers finding it tough paying their mortgage. Energy stocks had a good session after the oil price hit its highest close since early August, and homebuilders finished higher after Bush’s positive speech. In economic news, the Commerce Department announced personal income and spending increased by 0.5% and 0.3% respectively, and factory orders rose 3.3%, ahead of economist’s expectations of 3.1%. Despite the volatile week, the Dow Jones index had just a small fall of 0.16%, the S&P 500 closed down 0.36% and the NASDAQ bucked the trend and finished 0.76% higher. The US market is closed tonight for Labor Day Holiday.
Good start to the week, resources doing well. BHP up 25c to 3867c and RIO up 94c to 9446c. Metals all up on Friday, Nickel up 5%, Aluminium up 0.6% and Copper up 0.8%. Zinc up 2.3%. Zinifex up 16c to 1704c. Oil price up 61c to $73.98 on concerns about a developing storm in the Atlantic Ocean may reach rigs and pipelines in the Gulf of Mexico. Woodside down 17c to 4513c. Gold up $8. Newcrest down 16c to 2434c.
August was an exhausting month for all brokers, clients and analysts. A lot of volatility took away the gloss off what was a pretty phenomenal reporting season. Double-digit profit growth became the norm. Since 2002, August has been a strong month for the market, up for the last 6 years with an average gain of 1.6%. September on the other hand is statistically the worst month for the stockmarket with an average fall of 0.6% since 1936 in the All Ords.
- Company profit and inventory data for the 2nd Q is out this morning and weaker than expected. Suggestions that economists will be downgrading GDP forecasts on the back of it. Nothing to prompt a rate rise at the RBA meeting this week.
- June Q Building Approvals a bit stronger than expected, up 0.4%.
- Aussie inflation gauge numbers up 0.5% in July making +2.9% on the year. Top end of the RBA’s 2-3% band.
- Leighton Holdings (LEI) up a huge 324c or 7% to 47058c after announcing they have taken a stake in Dubai-based construction company Al Habtoor Engineering.
- Gindalbie Metals (GBG) up 8% or 13.5c to 180.5c this morning on the back of a 19% lift in resources.
- A bit embarrassing…Canada’s Brookfield say they might have double counted their stake in Multiplex on August 16 when they said they had 54.9% of MXG. If they have stuffed up, Brookfield’s holding could be less than 50%, the level required for the takeover to go unconditional. The 505c offer still requires clearance from the NZ regulators. Its next closing date is September 28th.
- Storms developing in the Atlantic again as we settle into the US hurricane season will push the oil price around. Oil price was up 63c to $73.98 on Friday.
- There are a number of companies going ex dividend today: AFG, ANG, HSP, QBE, ORG, JBM, DMP, CTX, CIL, SHV.
- US on holiday for the Labor Day holiday tonight – all markets shut.
We have an article in the MARCUS TODAY newsletter titled “The Fat Pitch”, an oldie but a goodie. Also, the Marcus Today stock picking competition is up-dated to the end of August – see who picked what and why.
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