The market is being buoyed entirely by BHP this morning – 1 point down. The SFE Futures suggest a 45-point rise in the market this morning.

Dow Jones down 36. Traded below its open all session and fell 87 at its lowest. Financials down 1.7% . The earnings results season has got off to a wobbly start. Alcoa missed EPS forecasts and Advanced Micro Devices advising on lower quarter earnings. March 18 FOMC minutes said most Fed officials agreed that economic contraction was “likely” and that some feared a “prolonged and severe” economic downturn. Only two Fed members were concerned over inflation and voted against the 0.75% rate cut – the biggest singular cut in 25 years. Fed economists have “substantially revised down” their forecasts for GDP this half, and estimate a “slow rise” in the 2Q, with growth trending “somewhat above” the economy’s long-term potential pace in 2009. The IMF said losses from subprime could amount to $945 billion, a lot more than the current $232 billion. Overall though, the market behaved more calmly and didn’t react with frenzied selling. All 15 homebuilders down with larger than expected decline in pending home sales. Sector down 4.3%.

  • Both BHP and RIO up in ADR form overnight, 5.24% and 3.28% respectively. BHP carrying the market, up 182c to 4222c. RIO up 152c to 13892c.
  • Metals all down – Copper down 2.2%, Zinc down 2.8% and Nickel down 0.5%. Aluminium down 0.4%. Zinefex up 15c to 1000c.
  • Oil price down 37c to $108.54 – The head of ConocoPhillips said the oil price will be supported despite the US going into recession because developing nations such as India, China and the Middle East will continue to demand oil. Woodside down 125c to 5545c.
  • Gold down $8.80 to $918.00. Newcrest down 64c to 3385c.
  • US Bonds down with the 10 year yield up to 3.56% from 3.54%

All eyes are on BHP Billiton today – up 3.7% to 4188c – up 5.4% in ADR form overnight and up 4.5% in London after the front page of The Australian cited unidentified sources in Beijing, that China is planning to buy a stake – larger than the 9% stake aluminium producer Chinalco acquired in Rio Tinto (RIO) in February at a cost of $15bn. No comment or announcement from BHP as yet. Some are seeing it as an attempt to intervene in BHP’s takeover of RIO. The relationship with the Chinese hasn’t exactly been the best. Kevin Rudd said the Chinese government and the industry will have to accept higher coal, iron ore and natural gas prices and that they can’t expect the Federal government to intervene with such negotiations in the commodity markets. Rudd arrives in Beijing today. The plan to buy a stake in BHP is still not finalized with Chinese authorities still deciding which state-owned financial institution will take the leading role. Talk is that it will be Baosteel Iron and Steel, China’s biggest steel maker. Market would been down close to 50 if not for BHP gains.

  • Western Areas (WSA) said it will ‘announce an upgraded reserve at its Forrestania project’. WSA down 4c to 722c.
  • Transfield Services (TSE) doing well after announcing a 5 year alliance contract with Western Power for its $3.5bn expansion of its transmission and distribution network in southwest WA. TSE up 30c to 1200c.
  • Pan Australian Resources (PNA) had increased its average annual production forecasts for its Phu Kham copper gold mine in Laos after increasing the size of the reserves at the mine. PNA up 1.5c to 106c.
  • Macquarie Office Trust (MOF) has sold its 505 Little Collins Street property for $83m. Registered as a $40.4m gain. MOF down 0.5c to 107c.
  • Austin Group (ATG) – which has a $5.7m market cap – wants the ANZ Bank to clarify exactly what percentage of the company they own. ANZ claim they own nearly half of the groups shares. ATG unchanged at 9.1c.
  • Babcock & Brown Infrastructure Group (BBI) has cut its stake in Natural Gas Pipeline Company of America to a 26% from 32%. BBI down 1c to 117c.

In the MARCUS TODAY newsletter today we have an article called “Necessary Financial Impoverishment”.

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