The market is up 30. Not a lot going on. The SFE Futures suggest a 12 point gain in market this morning.

Dow Jones closed down 16. It was down 100 at its worst and up 23 at its best. LIGHT VOLUME. Managed to hold on to most of the 448 point rally in the last two days which was encouraging. The Dow is 6.9% off its low. The ASX 200 is 4.7% off its low. The Dow Jones fell 17.1% at its low. The ASX 200 fell 25.5%.

The NASDAQ and the S&P 500 were both up overnight achieving their third rise on the trot. The S&P 500 is 6.3% off its 19 month low on 10 March. Goldman Sachs said brokerage houses and hedge funds could report a combined $460bn of credit market losses – four times the losses so far declared. CVRD (Vale) and Xstrata have failed to agree terms of the bid for Xstrata and have called off the deal. “While Vale and Xstrata continue to believe that a combination of the two companies could realize significant value for both sets of shareholders, we have not been able to reach agreement. We have therefore mutually decided to cease discussions”. Consumer confidence fell to 64.5 against forecasts of 73.5. It was a five year low. Six month expectations fell to the lowest since 1973. For the optimists it is the lowest reading since just before the Iraq War started… and the bull market started.

  • Both BHP and RIO up in ADR form overnight, 1.08% and 0.09% respectively. BHP up 97c to 3538c. RIO also up 2% to 11935c.
  • Metals all up overnight – Nickel up 3.4%, Zinc up 2.6% and Copper 2.9%. Aluminium up 2.1%. Zinifex up 38c to 999c.
  • Oil price up 8c to $101.78. OPEC pegged its reference basket of 13 crude oils at $96.15. The basket doesn’t set prices in the market, but provides a snapshot of how OPEC values its output. Woodside up 206c to 5241c.
  • Gold up $16.30 to $935.00. Newcrest up 184c to 3264c. Relief rally… up 6% today having fallen from $40 to $30 in two weeks.
  • Bonds up with the 10 year yield down to 3.50% from 3.53%.

Making the news today…

  • David Jones interim results – Profit up 25% – maintains earnings guidance of 8-13% growth. Made $89m against guidance of $87.5m to $89m and consensus forecasts of $88.3m. Top end. DJS up a healthy 24c to 378c.
  • SP Ausnet (SPN) have upgraded earnings forecasts for 2008/9. They expect earnings up 15% to $147.5m and distributions up 2.5%. SPN up 4c to 124.5c.
  • ConnectEast (CEU) have published an institutional investor presentation. They talk about a strong financial position, an early completion bonus, on budget. CEU up 1c to 126.5c.
  • Babcock & Brown Infrastructure (BBI) have put out a newsletter today. It is an upbeat update. Despite that BBI is down 3.5c to 117.5c.
  • Perilya (PEM) and CBH Resources (CBH) have put out a media release on their merger proposal. A 1 for 3 offer valuing CBH at 34c against the last price at 34.5c. PEM up 10c to 110c. CBH up 5c to 39.5c. The deal is thought to benefit both companies. Perilya has bigger production of zinc and lead, CBH has bigger resources.
  • Westfield Group down a touch after JB Were downgrade to a HOLD.
  • The Goodman Family have sold down shares in the Goodman Group (GMG) – 78m shares at 370c – in order to avoid the need for margin calls. GMG down 16c to 393c.
  • Westpac (WBC) has appointed Peter Clare as Group Executive for its Consumer Financial Services division. WBC down 32c to 2448c.
  • Computershare (CPU) now has 92.36% ownership of QM Technologies. CPU down 33c to 882c. They were up 7.1% yesterday.
  • JB Were talks about an improving earnings outlook for Banks and minimal impact on 2008 earnings. They suggest there is potentially significant upside to 2009 earnings. The sector fell 36.3% at its worst and has bounced 10.3%.UBS on the other hand warns against the very high risk of bank sector “event” risk.
  • Allco Finance Group is up 185% from its low. They are proving to be a bit of a bellwether for market sentiment. They are up 36% this morning and were up 102% yesterday.
  • CUO (CopperCo) goes into the S&P ASX 300 on 21 March. CUO up 3c to 48.5c.
  • Ten Network (TEN) reports tomorrow – JP Morgan expects a 1H net profit of $94.6m, up from $37.5m last year. TEN down 7c to 225c.

In the MARCUS TODAY newsletter today we have an article called Two Buys Two Holds Two Sells as well as all the usual PEs and YIELDS on the ASX 200 and a lot more of the stories and research and ideas doing the rounds.


Peter Fray

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