Our market is struggling – down 54 compared to the 8 point fall the SFE Futures predicted this morning. Resources struggling, giving up all of yesterday’s gains, financial recovering after initially going backwards.

The Dow Jones closed up 32. Up 57 at best. Down 167 at worst. Financials finished up 1% – choppy trading – down 2.8% at worst on fears of write-downs and the upcoming results season, but resources struggled. RIO gave back its 8.15% gain the day before and fell 5.41%. Concern that rising energy costs will impact on profits in upcoming results season.

Fund managers are saying the housing market is nowhere near the bottom and that inflation is the biggest fear in the markets, and A KBW research report suggested banks will need to raise a further $30bn in capital. In economic news, June ISM Manufacturing activity expanded– rose to 50.2 – topped expected 48.5, and May construction spending down 0.4% on-month. Economists expected a 0.6% downturn. The NASDAQ closed up 0.5%.

  • Both BHP and RIO down in ADR form overnight, 2.7% and 5.4% respectively.
  • Metals mixed overnight – Copper up 1.2%, Aluminium up 1.3% and Nickel down 1.9%. Zinc down 0.2%.
  • Oil price up $1.10 to $141.06 on the back of increasing tension in the Middle East and supply concern.
  • Gold up $16.20 to $944.50
  • US Bonds down with the 10 year yield up to 4%.

Lot of press about the RBA – main message after yesterday’s interest rate decision is that “Interest rates have peaked” as evidenced by a fall in the A$ yesterday.

Eddy Groves’ holding in ABC Learning is now just 3186 shares worth $2692. It used to be worth $325m. They announced after hours yesterday that they plan to salary sacrifice in return for options (costing 23c with a 92c strike) in the company that would deliver them 8.3m shares next year. The options are in the money at 115c. Now 84.5c down 15.5c yesterday. In other words Eddy now has an incentive to make the company perform again….which is a good thing. ABS up 5c to 89.5c.

  • Billabong (BBG) has acquired Californian-based skateboard brand Sector 9 for an undisclosed sum. BBG down 34c to 1025c.
  • Bluescope Steel (BSL) completed a US$325m debt raising in a U.S. private placement. BSL up 5c to 1117c.
  • Talk is that James Packer’s Consolidate Press Holdings is considering privatising Crown (CWN). CWN up 8c to 929c.
  • Westfield Group (WDC) has reached an agreement with UK governments and 2012 Olympic agencies to continue with one of Britain’s largest regeneration schemes. WDC down 4c to 1576c.
  • Takeover target Just Group (JST) has announced a profit warning this morning, music to the ears for Solomon Lew’s Premier Investments. JST down 32c or 10% to 286c.
  • Babcock & Brown Wind (BBW) said it has shortlisted potential buyers for its European wind farm assets. BBW down 5% to 156.5c.
  • Merrill Lynch estimates Qantas (QAN) Frequent Flyer program is worth just $1.6bn, well below the $2bn- $3.5bn range CEO Geoff Dixon outlined yesterday. QAN down 5c to 319c.
  • Ansell (ANN) has acquired the Hawkeye Glove Company for US$10.8m. Hawkeye has a 10% share of the US military glove market. ANN up 11c to 951c.
  • Coffey International (COF) announced it has signed contracts to provide English and technical training in the Middle East. COF up 10c to 190c.
  • CNBC Mad Money’s Jim Cramer has talked up Resmed (RMD) and believes the stock could go as high as US$50 in the US. RMD up 9c to 397c today.

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