The market is down 45. The SFE Futures suggested a 61 point fall in the market this morning. The market was down 75 earlier on.

The Dow Jones was down 143 overnight – It moved in a 195 point range and finished lower for the first time in four sessions on the back of disappointing housing numbers and continued concerns over the subprime mortgage market. The housing market continues to suffer; the National Association of Realtors announced pending sales of existing homes fell by 12.2% in July to the lowest level in nearly six years. The Federal Reserve’s Beige Book said although the overall economy hadn’t suffered from recent volatility in financial markets, the housing market had continued to go backwards. Financials finished lower on concerns their earnings will suffer because of losses associated with subprime mortgages, Citigroup cut their 3Q earnings estimates for both Morgan Stanley and Lehman Brothers. Lehman Brothers downgraded Deutsche Bank and Morgan Stanley. The NASDAQ lost most of yesterday’s gains, Apple Inc. closed down 5% after disappointing the market with their newly announced versions of the iPod digital media player. They also cut the price of their iPhone by $200.

Resources mostly down today…BHP down 13c to 3831c and RIO up 264c to 9834c. Metals all down overnight. Nickel down a big 5.1%, Zinc down 4.6% and Copper 2.1%. Aluminium down 0.2%. Zinifex down 68c to 1627c. Merrill Lynch says Nickel and aluminium are their preferred metals with copper and zinc the least preferred. Oil price up 67c to $75.74 on expectations the government will report a decline in US fuel inventories. Woodside up 22c to 4542c, their CEO, Don Voelte, was seen at a press conference about to be held by John Howard and China President Hu Jintao. PetroChina have signed an agreement to buy gas from WPL Browse gas project. Gold down 80c. Newcrest up 16c to 2426c.

Very quiet on the news front this morning.

  • Jobs numbers are out – +31,900 jobs in August. Unemployment unchanged at 4.3%. Strong numbers. Combined with the GDP numbers yesterday it justifies the recent rate hike and gives the coalition plenty of economic election ammunition. Heeps the pressure on the RBA for rate hikes rather than cuts.
  • The RBA have announced they will broaden the type of securities they will take as part of repurchase agreements. The 50 and 90 Day Bank Bill yields have fallen 15bp. All good but it highlights that there is still tension in the credit markets even in Australia.
  • RIO BID TALK – RIO is up 8.9% in the last week. BHP is up 4.5%. RIO has outperformed BHP by 4.4% in a week therefore. A lot of the buying coming out of the UK. The new (old) story is that BHP and CVRD are going to make a joint bid for RIO. BHP and CVRD decline to comment. RIO now 9834c. Last time this story popped up RIO was $83 and it topped out at $105. Its on a PE of 11.5x with 21% earnings growth…its cheap anyway.
  • Wesfarmers (WES) won board support for their record $18.2 billion cash and stock bid for Coles Group (CGJ) yesterday. Under the revised offer, the cash and dividend component does not change, but the scrip component does change and now includes a new listed security offering some downside protection against the WES share price. Both trading lower this morning, WES down 15c to 3866c and CGJ down 30c to 1445c. The current WES bid is worth 1460c taking a few non official items into account.
  • There is a report in the AFR today that Woolworths (WOW) are planning on overhauling their shopper-docket system. Apparently a new electronic card system, Everyday Rewards, which is currently being trialed in the Central West of NSW, will result in customers swiping their card at the checkout and at the petrol outlet to receive their discount. WOW down 7c to 2293c.
  • Consolidated Minerals (CSM) announced this morning that Pallinghurst Resources have declared their all-cash off-market $882.4m takeover unconditional. The CSM board has unanimously recommended the $902.4m cash offer from Palmary Enterprises, the offer ends on September 13. CSM down 3c to 405c.
  • Seek Ltd (SEK) up 13c to 839c after announcing the renewal of their partnership with ninemsn by signing a new exclusive 3 year agreement. SEK up 61% in the past year and has been an exceptional performer since listing thanks to average profit margins of over 40%. It’s wonder new competitor jobsjobsjobs wants a piece of the action.
  • The European Central Bank and the Bank of England are expected to leave interest rates unchanged in the wake of the credit crunch. The ECB said they would consider steps to curb recent euro money market upheaval – which runs counter to the prospect of a rate rise.
  • Ahead of the US jobs numbers tomorrow the closely watched ADP data estimated 65,000 non farm jobs were created in August, the slowest in 4 years and well below the 110K forecast for tomorrow’s number.

NSW has an APEC inspired holiday tomorrow. The ASX is open but it is a non-settlement day and the market is likely to be quiet. Any company that has anything of significance to announce would be better to wait until Monday if they want to be paid any attention. Marcus Today will cover the overnight markets early in the morning tomorrow and then call it a day.

We have a fascinating chart in the Marcus Today newsletter today….if everybody sees it it will be self fulfilling and its not pretty.

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