The market is up 46. Financials have rallied 1.3%. Resources recovering some of the ground lost yesterday up 1.3% and industrials UP 0.2%. The ASX200 is above the 5000 mark again – no technical cataclysm yet. SFE Futures up 14.

Dow up 73 in a half session. Up 122 at best. Down 58 at worst. Dow Jones up 0.65%. S&P500 up 0.11%. Nasdaq down 0.27%. Half Day session ahead of Independence Day holiday tonight. Jobs numbers not as bad as worst fears (and had the Dow Futures up 64 before the open). Resources hold up – BHP closed 42c above last nights close in equivalent ADR form. US Steel stocks up – panic averted after a 13% fall yesterday. NASDAQ down a touch after a 30% fall in NVIDIA after results. Energy sector down 0.5%. June ISM number a bit weak (below 50) – had its 6th monthly fall. ECB raised rates by 25bps as expected. US$ up. Oil price up $1.57 hitting yet another new high mid session. Zinc fell 4.6%. Dow Jones didn’t fall off the “Technical Precipice”. Fed says their investment (bail out) in Bear Stearns assets have fallen in value by 3.7%.

  • BHP down 0.59% in ADR form overnight, RIO up 0.77%. BHP up 72c to 4055c. RIO up 295c to 12490c.
  • Metals all down overnight – Zinc down 4.6%, Nickel down 1.4% and Copper 0.9%. Aluminium down 0.5%. Zinifex flat at 820c.
  • Oil price up $1.57 to $145.31 – the price of oil is up 50% since the start of the year. Woodside down 59c to 6251c.
  • Gold down $12.90 to $933.60. Newcrest up 15c to 3015c.
  • US Bonds down with the 10 year yield up to 3.98%.

COAL FALL A STORM IN A TEA CUP – Merrill Lynch calls the sell off in coal prices in Europe just profit taking “and is unrelated to fundamental drivers” and that prices have only returned to the prices hit mid last week and that they had run ahead of themselves. They say the fundamentals are intact and that markets are still “incredibly tight” and “there is no cause for panic. We expect buying opportunities to arise in coming days, as the market settles.” After the fall out yesterday the Patersons analyst commented that Gloucester Coal (GCL) is his least preferred stock. Felix Resources (FLX) remains his preferred. NEC and Cockatoo Coal (COK) also liked. COK is on the biggest discount in the sector compared to his NPV.

COMMENT ON THE BANK SECTOR from UBS this morning – “Australian banks look to be at compelling valuations following harsh treatment handed out to global banks in recent weeks. We examine a series of reasons why we regard Australian banks as a compelling proposition right now. We see the upcoming CBA result on 13 August as a positive sector catalyst”. They prefer ANZ and CBA. They note the banks will be a big beneficiary on any rotation out of resources.

  • Dow Jones analyst says CBA is the best placed bank to buyout HBOS’s Bank West for a tipped circa $48.7bn, were HBOS to change their mind on their desire to sell some Australian assets.
  • Metcash’s bid for the former Symbion assets being auctioned off by Primary Health Care has been rejected by a major chemist chain – the AFR reported the Terry White drug-store chain which generates substantial revenue as part of Primary’s pharmacy distribution, has said it won’t support Metcash’s planned logistics JV with Sigma. Metcash may withdraw its circa $470m bid as a result. MTS down 5c to 369c.
  • Murchison Metals (MMX) – said it is continuing with its $1.53bn merger plan with Midwest despite the iron company’s recent share price depreciation. Murchison needs 50.1% of Midwest shareholders to vote in favour of the proposal. Sinosteel is in a strong position to block the deal, now holding a 43.6% stake. MMX up 2c to 298c.
  • Newcrest Mining (NCM) announces that Beadell Resources’ capital raising, which was going to be used to buy NCM’s 70% interest in Cracow, has been unsuccessful due to recent difficult market conditions. NCM up 14c to 3014c.
  • Origin Energy (ORG) has advised shareholders to reject the hostile $13.1bn British Gas bid. ORG has also agreed to buy BBP’s 640 MWatt gas-fired Uranquinty Power Station for $700m. ORG down 11c to 1617c.
  • IAG down ahead of a company briefing next week which is thought likely to lead to a cut in the dividend. IAG down 12c to 361c.
  • Citibank says BUY Oxiana – They have a 340c target price. The stock is down 32% since they bid for Zinifex. OXR up 5c to 228c.
  • Babcock Power’s (BBP) shares surge 13% on the news it sold its 640 MWatt gas-fired Uranquinty Power Station for $700m to Origin. Will use the proceeds to deleverage its balance sheet. Says FY09 earnings and distributions outlook remains unchanged.

We have an article in the newsletter today looking at the Stockbrokers Foundation Awards Night including some examples of the best and worst of the research in the last year along with 8 of the most tipped resources stocks for the year ahead. FOR A FREE TRIAL OF MARCUS TODAY CLICK HERE.

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