A good end to the week. Market up 65. The SFE Futures suggested a 22 point rise in the market this morning.

The market is reacting mid morning to a speech from Bernanke which suggests that interest cuts are on the agenda and is likely to send the Dow higher tonight. Dow Futures up 85.

The Dow Jones closed up 22.  It moved in a 132 point range and finished the session slightly higher, one day after posting its best two-day gain in almost 5 years, despite economic data sending mixed signals about the state of the economy. In economic news overnight, initial jobless claims increased last week by a higher than expected 23,000 to 352,000; new home sales registered a small rise in October but the selling prices fell 13% from last year; and a revised reading of economic growth showed 3Q GDP increased at an annual rate of 4.9%, the fastest pace in four years.

Resources outperforming today, up 1.5% (market up 0.8%). BHP up 88c to 4285c and RIO up 314c to 14239c. Metals mixed overnight: nickel down 4.3%, aluminium down 0.2%, copper up 2.4% and zinc up 0.8%. Oil price up 27c to $90.88 after a fire along the Enbridge Energy Partners Lakehead pipeline in northern Minnesota raised supply concerns. Woodside up 73c to 4822c. Gold down $5. Newcrest down 44c to 3355c.

Very quite today…not much going on. A few AGMs, but that’s about it.

  • Tattersall’s (TTS) told investors this morning at its AGM that business was going well and recovering after the outbreak of equine influenza but earnings will be down around $5m. In another positive, gaming machine revenue was up 3.7% so far this year, the best start to a year since 2002. CEO Dick McIlwain reaffirmed guidance for the Lotteries division of $90m EBITDA. TTS up 9c to 398c.
  • Centennial Coal (CEY) down 2c to 468c after trading as high as 505c on the back of its AGM today. Management told shareholders that the $1.1bn gained from the sale of its Anvil Hill and Austral mines that Xstrata bought earlier in the year will be used to pay off debt and get its balance sheet in order. They believe thermal coal demand will continue to grow but expect 2Q production not to be as strong as the September quarter.
  • Sonic Healthcare (SHL) up 7c to 1687c on its AGM. Its CEO told investors to expect sales growth of between 20-25% and EPS growth of more than 12% next year. He is also expecting a strong 2H to the year as it reaps the rewards of its US and European acquisitions earlier in the year. SHL has had a strong year, up 26% compared to a 17% rise in the ASX 200.
  • Fosters Group (FGL) announced they have completed their $100m on market share buy-back. They bought back 15.95m shares at an average price of 627c a share. The initiative was first announced in August this year. FGL up 11c to 363c.
  • Publishing & Broadcasting (PBL) ceases trading tonight after the market close. Were’s have run the numbers over both Crown (CWN) and Consolidated Media Holdings (CMH). They value Crown at 1541 per share with a FY08/FY09 PER including investments of 30.5x/25.4x, and value CMH at 383c a share with FY09/FY09 PER of 18.8x/15.1x. PBL down 6c to 2099c. CMH will have a small staff and board and is more of a holding company than an active business entity.
  • Iron ore stocks doing OK as India’s Tata Steel say “While the sudden jump in raw material prices such as iron ore happened because of the rise of capacity not matching increasing steel demand, prices have continued to rise. We see new prices stabilising and settling down in 3-4 years”. Tata have a 35% stake in a Riversdale project. RIV up 3.6%.
  • ABN AMRO maintain their BUY recommendation on Woolworths and 3750c target price after the NZ High Court gave them and Foodstuff the green light to take over The Warehouse Group. WOW up 35c to 3328c.
  • Companies going ex-dividend today include ABB, CPB and MPB.

We have an article in the MARCUS TODAY newsletter today called The Magnificent Seven. It looks at how seven stocks have accounted for 79% of the ASX 200 index rise this year. BHP alone has accounted for 40% of the markets rise this year. BHP and RIO over half. Twenty stocks have accounted for over 100% of the rise. In other words if you didn’t hold the top twenty stocks in the ASX 200 this year to date, for you the market is down.

MARCUS TODAY – “Inform, Explain, Educate, Entertain”

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Peter Fray

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