The market is up 17. BHP down as rumours about the Chinese looking at a 19% stake through a London book build at $53 fade. Financials slightly down. Industrials up 1%.

Dow up 66. Up 161 at its best and down 7 at its worst. Volume was 24% below average. Financials up 0.9% with mortgage lenders Freddie Mac up 9.17% on better than expected results. Housebuilders up on the Freddie Mac results (better mortgage lending hopes).. Retailers up on better than expected sales numbers from Macy’s (up 3.62%). CPI numbers better than expected. Up 0.2% in April compared with +0.3% in March and forecasts for +0.3%. Inflation was up 3.9% on the year (down from 4.0%). Energy stocks down on a 1.3% fall in the oil price despite a rise in inventories. Foreclosures in April were up 65% on April last year.

  • Both BHP and RIO up in ADR form overnight, 2.74% and 1.61% respectively. BHP down 69c to 4787c. RIO up 138c to 15248c.
  • Metals all down – Nickel down 1.9%, Zinc down 1.5% and Copper 1.4%. Aluminium down 0.2%. Zinifex up 8c to 1034c.
  • Oil price down $1.62 to $124.21 on the back of traders taking profit. Woodside up 29c to 6169c.
  • Gold down $3.10. Newcrest up 44c to 3030c.
  • US Bonds up with the 10 year yield down to 3.9%.

Rumours of a bookbuild in BHP propelled the share price up 6.1% in Australia yesterday. The story was that Morgan Stanley were doing a bookbuild out of London to buy a 10% (or 19.9%) stake in BHP at $52-53.20 for Chinalco. Overnight nothing has materialized. Morgan Stanley have denied the rumour, they are after all conducting the RIO defense. Chinalco have declined to comment. Marius Kloppers fed the rumours yesterday after he refused to answer the question whether BHP have held talks with Chinalco. BHP added 47 points to the 60 point rise in the ASX 200. Today it has taken 12 points off the index.

The Commonwealth Bank are up against the sector trend on the back of a 3rd Q trading update – Growth challenging in the short term,. Equity markets will affect 2nd half growth, expect slowing credit growth, funds under administration down 5.4% in the 3rd Q, tentative signs of an improving credit market, good volume and market share growth in the banking business in the 3rd Q, credit quality remains good, in excellent position to continue to grow. 21.4% off its lows and 26.4% off its highs. Yield 5.9%. PE 12.1x.

  • The NAB say they can’t rule out a counterbid for St George. Most of the banks down a bit. Bendigo Bank and Bank of Queensland extending their recent gains. NAB down 10c to 3360c.
  • Looks like the ANZ have missed out on buying the Wing Lung Bank 53% stake being sold by the Wing Lung family. The China Merchant Bank is reported in the Wall St Journal as the front runner. ANZ down 14c 2258c.
  • Leighton Holdings’ wins new $1.55bn contract in Dubai and confirm 3Q net operating profit up 37% and they are on track for 30%+ full year growth. LEI have put on $10 in a month. Now 5245c. Yield 2.7%. PE 25.1x.
  • Ansell Ltd (ANN) confirms earnings guidance for year to June 30 and expects EPS to be in the range of US 60 -64 US cents. Ansell down 2% but Fosters up 3.9%.
  • Perpetual (PPT) up a bit after it says the Exact Market Cash Fund has stabilized losses and mark-to-market losses in the fund totaled $26.2m at April 30 vrs $26m at March 31. PPT up 68c to 5668c.
  • ABN AMRO initiates research coverage of Primary Healthcare (PRY) with a BUY recommendation and a 710c target. “The key to Primary’s near-term performance will be bedding down the Symbion acquisition.” Now 580c.
  • AMP are unmoved by their AGM. Wealth Management having a challenging year, but confident about the medium term. Will carry dividend policy through despite market volatility. AMP up 10c to 795c.
  • Coca-Cola Amatil Ltd (CCL) trading update highlights expectation of high single-digit NPAT growth for both half and full year. Share price up 4%. Yield 4.5%. PE 15.8x.
  • Suncorp Metway (SUN) said it has securitized $2.6bn in residential mortgage-backed securities for contingency liquidity purposes. Hasn’t done much for the share price. SUN down 7c to 1533c.
  • Indophil Resources (IRN) up 40% after a bid from Xstrata. They have rejected the offer calling it opportunistic.

In the newsletter today Patersons tell us the most likely stock to be taken over in the iron ore sector and we have an article about dentistry, sleep, continuous positive airway pressure and the modern need to be perfect.

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