The market is down 35. It was up a rather pathetic 4 at best. Pretty rum return for Australians following a 200 point rally in the US. Financials down 0.4% and resources still falling — down 1.3%. SFE Futures were up 37 this morning.

Dow up 207. Up 208 at best. Down 29 at worst. Closed on its highs for the second consecutive day. 2 day advance on the Dow of 484 points – biggest 2-day rise since 2002. The Dow Jones is out of technical bear-market territory — now less than 20% down from the high. 3 stocks up for every 1 down. High volume — higher than yesterday. Financials up 4.3% — the index was up 12% yesterday. Merrills has had a poor set of results after hours. Better-than-expected results in other financials. JP Morgan, United Technologies and Coca-Cola posted stronger-than-expected results with good post results commentary. Housing starts and jobless claims were better than expected. Oil fell yet again — boosting consumer stocks, retailers and housebuilders — down another $5 on fears about a slowing US and Chinese economy — down over $15 in three days. Natural gas was down 7% on higher than expected inventories — also weighing on the oil price. Fannie Mae and Freddie Mac jumped 18% and 22% after Fitch Rating Agency confirmed long-term issuer default ratings on both companies. Dollar mixed against other currencies — but was up yesterday.

  • Both BHP and RIO down in ADR form overnight, 3.28% and 0.8% respectively. BHP down 29c to 3725c. RIO down 168c to 11631c.
  • Metals all up overnight — Zinc up 2.6%, Nickel up 1.85% and Copper up 1.03%. Aluminium up slightly — 0.20%.
  • Oil price down another $5.20 to $129.43 — now down 12% since Monday and more than 20% since the 4th July holiday. The fall comes on concerns for a weakening global and possibly Chinese economy. Woodside down 256c to 5595c. It is down from $70 in May.
  • Gold up $8 to $970.70. Newcrest down 75c to 3145c.
  • US Bonds down with the 10 year yield up to 4% from 3.96%.

The press tells us the 2Q CPI figures due on July 23rd are likely to keep the RBA on hold.

Woodside’s (WPL) being kept at BUY by most of the brokers after yesterdays broadly in-line 2Q production numbers. Woodside’s Don Voelte is saying the government is coming under strong criticism from business for its planned carbon reduction scheme which will threaten the development of huge LNG plants in Queensland over the next few years.

Some of the worst hit credit crisis stocks having a bounce: GPT Group (GPT) up 6.6% early as they appoint Jones Lang Lasalle to sell $900m of assets from their hotel and tourism portfolio in order to cut debt after last months surprise 27% cut to profit forecast and distributions cut. Babcock and Brown Power (BBP) up 7% early as they agreed to divest 73% of their interest in Ecogen power generation business for $87m to assist in paying down debt.

  • CSL up 6.6% early as competitor Baxter posts better-than-expected 2Q EPS of US$0.85 per share.
  • Virgin Blue (VBA) up 5.2% helped by talk of becoming a takeover target since Toll’s announced plan to spin-off the airline.
  • Qantas (QAN) has announced a cut of 1500 jobs as part of Dixon’s attempt to fight rising fuel prices. QAN won’t be implementing their planned expansion in flight capacity and new jobs. Down 2c to 332c.
  • Some Iluka recommendations upgraded by brokers after yesterday’s soft production figures — sales revenues were actually a bit better-than-expected given the WA gas shortages and an inventory drawdown. ILU up 8c to 428c.
  • Macquarie Airports (MAP) said core portfolio of airports recorded slowing core traffic growth of 3.6% down from an average of 6.4%. MAP down 6.1%.
  • Nufarm (NUF) has lifted guidance on tax-paid-operating profit for FY ending June to between $155-$160m essentially in line with consensus. Follow-up rains after planting recent crops hasn’t been great but they said conditions for next FY are “very positive.” Up 4.84% or 77c to 1646c.
  • Macquarie Infrastructure Group (MIG) down 2.7% after posting a 2Q net loss of $8.8m compared to the $11.2m net gain a year ago.
  • Mincor Resources (MCR) set to meet output at its McMahon nickel mine and will meet full-year record production of 16,500 metric tones of concentrate — up 28% on-year. Operational NPAT for the FY should be a strong $168m. Stock up 8% to 218c. The nickel producers have been nailed recently. Today’s move suggests that they are oversold and that results are more likely to cause a price rise than fall.
  • New Hope Corp (NHC) up 13% early after selling $2.5bn New Saraji coal project in QLD to BHP/Mitsubishi alliance — will use the cash in its expansion of the New Acland mine and port facility.

We have an article in the MARCUS TODAY NEWSLETTER today called Flip Flop telling you which stocks to buy and not to buy on a flip flop in the market from fear to greed.

For a FREE TRIAL OF THE MARCUS TODAY NEWSLETTER click here.

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Peter Fray
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