The market has done well this morning compared to Wall St and despite the 142 point rally yesterday – up 42 this morning. The SFE Futures suggested a 21 point rise in the market this morning reflecting a better performance from commodities overnight and a small drop in financials.
Dow Jones down 49 after 3 days in positive territory. It was up 42 at its highest and down 99 early in the session after Bernanke’s comments about a possible recession. Volumes were much lower than in the rally yesterday. Bernanke told Congress that 1H might result in a “slight contraction”. See separate page for more – main points – bonds hardly moved suggesting the testimony had little impact on the outlook for interest rates – he talked about the Bear Stearns collapse – it is clear the Fed couldn’t allow them to collapse and are unlikely to let anyone else collapse – the Fed in other words have underwritten the survival of financial institutions. The International Monetary Fund has cut its forecast for global growth this year and said there’s a 25 percent chance of a world recession. The White House said their forecasts were “over blown”. In economic news, ADP Employment Report better than expected – reported a gain of 8000 private sector jobs in March, better than the expected loss of 45,000. February’s figures were also revised down from 23,000 to only 18,000 payrolls lost, and February factory orders came in worse than expected down 1.3% but not a big market factor. US Bonds down with the 10 year yield up to 3.59% from 3.55%.
- Both BHP and RIO up in ADR form overnight, 1.37% and 2.28% respectively. BHP up 3% to 3782c and RIO up 339c to 12870c.
- Metals mixed overnight – Copper up 2.4%, Zinc up 1.5%, Nickel down 3.5% and Aluminium down 0.9%. Zinifex up 17c to 937c.
- Oil price up $3.91 to $104.83 after the Energy Information Administration inventories fell by 4.5m barrels last week, twice the drop expected by analysts. Barclays Capital says the oil price could easily reach $US135 a barrel in the next 18 months. Woodside up 132c to 5613c.
- Gold up $12.30 to $895.20. Newcrest up 110c to 3318c, Lihir Gold up 11c to 348c and Pan Australia down 1c to 97c.
The OPES saga continues with two court cases in train that every victim will be watching. You might remember the letter from a victim of OPES we carried on MARCUS TODAY on Tuesday. David Regensburger – the guy who wrote the letter was on ABC Lateline last night – hit the link here and click on the top story (brown icon “OPES shares sale halted”) on the right hand side of the ABC Lateline website.
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Making the news today…
- The ANZ have been ordered by the NSW Supreme court to stop selling shares in one of Opes Prime’s companies – Gindalbie Metals – after a Sydney judge found the OPES’s legal agreement with clients appeared to conflict with its marketing brochure and presentations. ANZ down 11c to 2343c.
- Asciano (AIO) sells its 3.4% stake in Brambles (BXB) – A parcel of 46.8m shares in BXB were traded at 1010c this morning before market open, 34c discount to yesterday’s closing price, and another parcel of 1.9m were also traded at 1024c. BXB down 17c to 1027c, AIO up 24c to 436c. It is ultimately good for the BXB share price to get rid of the overhang although this morning it looks like some of the long term investors they placed the stock with are flippers.
- Leighton Holdings (LEI) announced it has secured two contracts worth around $1bn collectively over 20 years to develop and operate an open-cut coal mine in India’s northeastern coal field. LEI up 3.2% or 119c to 3794c. They were up 3.8% yesterday.
- Mount Gibson Iron (MGX) in a trading halt – we are expecting an announcement about a potential transaction involving a material shareholding in the company. MGX last traded at 293c a share. It is down from a high of 378c in the last month.
- Fleetwood (FWD) has been awarded a contract worth around $48m to supply and install a 1,000 person accommodation village in WA. FWD up 20c to 877c.
- According to The Australian, Babcock & Brown (BNB) is one of a consortium buying into stockbroking firm Tricom. BNB down 14c to 1530c.
- SL Nominees has acquired a 10.8% stake in Australian Pharmaceutical Industries (API). It holds around 27.8m shares after buying 15m shares for $21m. API down 6.5c to 146c.
- APN Property (APD) down 12.7% to 82c after announcing a profit downgrade. They now expect a net profit of $9.5m-$11m, down from $17.4m last full year.
- Macquarie Equities cuts its EPS forecast for the banking sector by 4.6% for FY08 and 1.6% for FY09. CBA up 14c to 4443c, NAB up 69c to 3119c, WBC up 38c to 2530c and ANZ down 8c to 2346c. It also cut its recommendation on CBA to UNDERPERFORM with a 3071c target price, well below the current share price.
- Talk is that ABC Learning (ABS) will finalise the deal with Morgan Stanley involving its US assets by the end of this week. ABS down 0.5c to 161.5c.
- Magma Metals has revealed plans to list on the Toronto Stock Exchange, joining around 20 other WA companies that have already done so. MMB down 2.5c to 34c.
We have a list of all the ASX 200 PEs and YIELDS on the MARCUS TODAY website every day and today we re-launch the “Rumour File” – a list of potentially price sensitive stories tracking how the stocks have performed since the story came up.