The market is down 57. Financials down 1.6% and resources down 1.1% on renewed credit crisis concerns and stagflation in the US. SFE Futures down 88.

Dow down 220 (down 1.8%) down all session. Down 245 at worst. Dow down 3.1% for the week – down 5.9% month-to-date. Down 10.3% year-to-date. Options expiry partly to blame. Heavy volume. Financials down 2.5%. Moody’s follows Fitch and Standard & Poors cutting credit ratings on Bond Insurer MBIA and Ambac – assigning them a negative outlook. Merrills reduced earnings for a bunch of banks – sited credit risk, capital raises, and possible dividend cuts. Auto sector down 7.6%. Tech stocks down. Resources down. Nasdaq down 2.7% – large cap tech stocks down with Apple, Microsoft and Google all down. Automobile Manufacturers down 7.6% on outlook downgrades from ratings agencies. Fed policymakers expected to take a tough line on inflation – the FOMC meet this week – they are not expected to move interest rates – 10% chance of a meeting. 30% chance of a rate rise next meeting.

  • Both BHP and RIO down in ADR form on Friday, 3.63% and 0.10% respectively. BHP down 75c to 4390c. RIO down 315c to 13545c.
  • Metals all up on Friday – Copper up 1.2%, both Nickel and Zinc up 0.9% and Aluminium up 2.1%. Zinifex flat at 820c.
  • Oil price up $2.90 to $134.78 – The US and other consuming countries say that oil production is not keeping up with oil demand, Saudi Arabia and other OPEC countries say there is no shortage of oil and that speculators are the ones driving the price higher. Woodside up 122c to 6415c.
  • Gold down 50c to $903.70. Newcrest up 15c 2736c.
  • US Bonds up with the 10 year yield down to 4.16%.

Valad Property Group (VPG) joins property and infrastructure companies in announcing earnings downgrade and adjusting business model. Underlying EPS to be down 11.1c for the year. Will change policies so as distributions come from cash earnings not underlying earnings. Is a warning sign for the whole property trust sector coming into results season. VPG down 5.4% to 79c.

  • Babcock & Brown (BNB) – rumors that KKR and HSBC have been eyeing off BNB and satellites, given their sharp falls in market prices the last few weeks – no party making comments at this stage. BNB down 22c 620c.
  • Babcock & Brown Infrastructure (BBI) reported by Sydney Morning Herald to be looking at outside financing for part of its GBP335m Northern Gateways Container Terminal – BBI looking to reduce its debt-to-equity levels. BBI down 3c to 77c.
  • Indophil Resources (IRN) has been surprised by Xstrata’s turn around yesterday at 8am, deciding they would match the $1.28 per share bid from the Richard Laufman/Crosby/Alson’s consortium Friday. Under its pre-bid agreement with Lion Selection (who meet this morning to vote on the sale of their stake in Indophil), Xstrata will seek to acquire Lion’s 17.8% blocking stake. IRN up 1.5c to 140c.
  • Tatts (TTS) and Tabcorp (TAH) face possible competition for Victoria’s gaming license with JV partners UK group Ladbrokes and Irish group Paddy Power potentially looking to bid for the $700m wagering and betting license. TTS down 2c to 246c. TAH down 44c to 1028c.
  • James Hardie (JHX) disputes a proposed US tax authority ruling saying JHX needs to pay $49m for withholding tax rates payments from the US to the Netherlands in 2006 and 2007. JHX down 25c to 447c.
  • Macarthur Coal’s (MCC) major shareholder Ken Talbot resigns from the board, giving him more flexibility over his 19.8% stake – trading halt remains.
  • Tatts Group (TTS) will write off the value of its Victorian gambling license in FY08 – said the write off won’t affect the consolidated profit or balance sheet.
  • Ramsey Health Care’s (RHC) maintains FY core EPS guidance of 10-12%. RHC down 33c to 939c.
  • Charlie Aitken at Southern Cross Equities tells us in his daily email that the next credit market fall out will come from Private Equity not meeting interest payments and revaluing assets and the uncertainty of which banks have exposure to those funds.
  • Perilya and CBH Resources in a trading halt. Perilya expected to reduce the terms of the merger for CBH shareholders.

We have an article in the MARCUS TODAY Newsletter today called “Respect the Trend”. Don’t read it unless you want a miserable day. It is a reflection of current market sentiment.