The market is down 12. The SFE Futures predicted a 15 point fall in the market this morning. MQG released its FY result – in line with expectations and not too much with the numbers.

Dow closed up 41. Up 150 at its best and down 23 at its worst. Encouraging Leading indicators suggest H2 economic recovery possible, poor tech sector on SanDisk sales warning and Warren Buffett said credit crisis “far from over”. Microsoft have put up a new deal to Yahoo! Not a takeover. Microsoft fell 1.7%. Yahoo! up 0.07%. Competitor Google fell 0.44%. It involves Microsoft buying the search engine business only. Microsoft also to take a stake in the residual Yahoo! business after it sells its Asian assets (40% of China’s Alibaba and Yahoo Japan. Deal not finalised but described as an “outline”. Warren Buffett said “I’ll talk about the United States. I don’t think the effects of the credit crunch are far from over at all. I think there will be rippling secondary, tertiary effects”. Google have launched Google Health giving people access to their medical records and in economics, Leading Economic indicators for April up 0.1%. Second small rise on the trot after 5 months of falls. Suggests the economy is getting ready to recover as most economists predict in the 2nd half of the year.

  • BHP and RIO both down in ADR form overnight – 1.59% and 1.50% respectively. BHP down 66c to 4890c and RIO down 131c to 15477c.
  • Metals all down – Copper down 1.5%, Nickel down 1.1%, Zinc down 3.4%, and Aluminium down 1.5%. Zinifex down 22c to 1052c.
  • Oil price maintained its record breaking ascent, settling at $127.05. Closed higher on OPEC’s comment on Monday that it would not increase production before its next meeting on September 9th. Woodside down 207c to 6743c.
  • Gold up $5.90 to $905.80. Newcrest up 39c to 3321c.
  • US Bonds up slightly with the 10 year yield down 0.4%.

Better to travel than arriveMacquarie Bank down 5% on results a touch below expectations (although there are a lot of fiddly bits which could have pushed it either way). Tax rate is below normal and has helped in the 2nd half. Outlook is “challenging”. It would help if the stock wasn’t up 48% in the last two months. Profit taking today. Nothing in the result to disturb long term investors. MQG down 4.3% to 6326c.

Making the news today…

  • Bonds down (yields up) on the news the Government are going to sell an extra 10% of bonds next fiscal year or $25bn to boost liquidity. 66% of the bond market is held overseas at the moment.
  • Lion Nathan (LNN) up 3% early on better-than-expected 1H net profit. NPAT (before significant items) came in at $167.7m compared to $156.8m last year – above the $157.9m analysts’ expected. Result ahead of GSJB Were’s expectations, but FY guidance remained in line. LNN up 23c to 865c.
  • GrainCorp (GNC) MD Mark Irwin has put the blow torch to takeover target Ridley (RIC) to start negotiations and get their act together for the benefit of their shareholders. GNC down 12c to 1189c.
  • Aristocrat Leisure (ALL) has reached a conditional settlement over a $396m class action. ALL will incur a net cost (after expenses and tax) of up to $40m and says the payout will have no material impact on its financial strength. According to the Sydney Morning Herald, ALL has agreed to pay $150m-$170m, suggesting it had insurance to cover the cost. ALL up 45c to 852c.
  • Macquarie Airports (MAP) announces traffic at Sydney Airport in April increased 3.2%. CEO Kerrie Mather said traffic across the group’s portfolio of airports was up 6.6%% for April. GSJB Were says the figures are “in-line”. MAP is on a yield of 7.9%. MAP up 1c to 328c.
  • Mitchell Communication Group (MCU) announced the acquisition of the remaining 49% of Mitchell & Partners WA, which it doesn’t currently own, from Workhouse Advertising. The acquisition cost is $6.174m cash and equates to an EBIT multiple of 6x. GSJB Were are a fan of the stock, they have a BUY recommendation and 125c target price, 66% above the current share price. MCU is on a yield of 2.7% and trading on a PER of 15.9x. MCU unchanged at 75c.
  • Sino Gold Mining (SGX) will raise around $204m in order to gain full exposure to the high gold price. It will close out gold forward sales totaling 278,657 ounces at average delivery price of US$525/oz; wise idea considering gold currently trading at around US$905/oz. SGX unchanged 532.
  • James Hardie (JHX) has appointed David Harrison as a director. James Hardie has results on Thursday. JHX up 7c to 596c.
  • JB Hi-FI (JBH) has announced Craig Mackie will be joining the company in the position of General Manager Hardware. JBH down 24c to 1072c.

Reuters invited executives from the world of technology, media and telecoms to talk about their businesses and issues surrounding their industries. This has prompted a comment from Telstra’s CEO Sol Trujillo who says “In Australia, we have the worst regulatory climate in the world.”…”Telecoms is like Cheerios. It is a mature industry but still has growth if you can differentiate yourself. General Mills saved Cheerios by adding honey and developing many different flavours over the years.”