The market is up 68 on the back of an 89 point rise on Wall St and a 53 point rise in the Futures this morning. Our market is following the US lead with financials up 1.7% and resources up 2.2%. Macquarie Group is holding up today (up 1.7%) after yesterday’s 9.6% fall as UBS cut their target price to $48 from $60 and warned about “impairment” charges against associated investments. QAN down 6.5% as it goes ex dividend 17c and falls 24c, IAG is ex 9c and OZL 5c. Ex dividend tomorrow — AGK, COH, DOW and SUN. BHP goes ex dividend on Monday along with Woodside and Woolworths.
The Dow Jones had a good session — up 89. Up 141 at best. Down 31 at worst. The main driver was durable goods up much more than expected boosting confidence about the economy. Oil and energy up strongly. Resources up. Financials outperformed on positive news about Fannie Mae and Freddie Mac. 9 out of 10 sectors up – volumes even lighter than yesterday – once again, the lowest level for the year as the US runs into a long weekend for the Labor Day holiday on Monday. Financials up 1.7% — Fannie Mae and Freddie Mac up 15% and 20% after Standard and Poor’s reaffirmed their debt ratings and Bank of America and American Express both up over 2% as the Commerce Department report increased expectations that the economy was recovering. The NASDAQ closed up 0.87%.
- The SFE Futures suggested a 53 point gain in the market.
- Both BHP and RIO up in ADR form overnight, 1.79% and 1.60%.
- Metals mostly up overnight – Nickel up 4.78%, Zinc up 3.34% and Copper 0.86%. Aluminium down 0.15%.
- Oil price up $1.86 to $118.17 — third straight day of gains — on concerns that tropical Storm Gustav could enter the Gulf of Mexico and disrupt oil and natural gas production.
- Gold up $5.90 to $830.10
- Bonds up with the 10 year yield down to 3.77% from 3.78%
Another busy day on the announcement front, not long to go before life returns back to normal and the reporting season comes to a close.
- AMP — AMP Ltd — Report a net profit (excluding accounting mismatches) of $278m, down 50%; analysts’ were expecting a 47% fall of $296m. Declared an unchanged dividend of 22c – market expected a dividend of 22.5c with forecasts ranging from 21c to 24c. Reaffirmed its current dividend payout policy, which is helping the share price. Up 4.5%.
- ALL — Aristocrat Leisure — IN LINE — Announce a 1H net profit of $71.4m, down 43% and in line with its recently downgraded guidance of around $70m. Credit Suisse expected $72.8m, GSJB Were $70.1m. Up 4.3%.
- ORG — Origin Energy — IN LINE – Announces a FY net profit of $516.7m and an underlying profit of $443m. Analysts’ had expected $441.6m. Will pay a final dividend of 13c. Reiterates 10-15% underlying EPS growth target. Up 0.2%.
- FLX — Felix Resources — GOOD — Said profit quadrupled to $188.26m from $46.96m. GSJB Were expected $178.7m. The result may end up being irrelevant after it announced last month that it had received takeover proposals by several parties. Up 3.7%.
- TTS — Tattersall’s Group — Announce an 11% fall in FY08 net profit to $257.6m, slightly below analysts’ expectations of $259.6m. Announce a special dividend of 10.5c, says businesses are offering good prospects into FY09. Key now is future growth opportunities after the government put the kybosh on their gaming duopoly. Down 0.8%.
- AUB — Austbrokers Holdings — SLIGHTLY AHEAD OF EXPECTATIONS — NPAT up 17% to $15.7m, slightly higher than the $15.3m GSJB Were expected and $15.3m analysts’ expected on average. Up 2.5%.
- SBM – St Barbara — BELOW EXPECTATIONS — Announce a $17.3m loss. Underlying loss weaker than what GSJB Were had expected. No change to production guidance of 295-315koz for FY09. Down 2.4%.
- PNA — Pan Australia — OK — Announce a 1H net loss of US$389,000. Result better than expected. No interim dividend. Up 2.8%.
- QGC — Queensland Gas — Underlying profit comes in at $30.6m. FY net profit of $244.6m. No final dividend. Up 0.47%.
- FKP — FKP Property Group — FY net profit down 25% to $145.3m. Operating profit (excluding property revaluations and other non-cash items) up 11% to $150.2m. Declared a final dividend of 15.7c, down from 16.5c last year. Up 6.75.
- MCC — Macarthur Coal — BELOW GUIDANCE — Announce a FY net profit of $72.7m, up 9.3%, below company’s guidance of between $80m-$90m and GSJB Were’s expectations of $83.5m. Down 7.5%.
- IGO — Independence Group — Announce a net profit of $51.5m and declared a final dividend of 5c. Up 3.3%.
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- Sedgman (SDM) announces its metal division has been awarded a 5 year operations contract at Xstrata’s Handlebar Hill mine in Mt Isa. Take the value of Sedgman’s order book to over $700m. Up 4.2%.
- Sigma Pharmaceuticals (SIP) announced it has no definitive plans to break up the company. Down 5.85.
- Babcock & Brown Capital (BCM) has provided a review of management arrangement and a share buy-back update. It has begun talks on management internalization and deferred off-market buyback. Down 6.25%.
- We are waiting for ABC Learning (ABS) to restate its results for at least the past 2 years and announce a bigger-than-expected loss from the partial sale of its US business. Still in a trading halt.
- Macquarie Group (MQG) doing OK – up 1.0% – after falling 9.6% yesterday after UBS Warburg downgraded the stock to Neutral. Citigroup says the balance sheet worries are overdone.
- Brokers maintain their BUY and OUTPERFORM recommendations on Woodside Petroleum (WPL) – after its profit result yesterday. Up 2.5%.
Tomorrow we have another busy day on the reporting front with the results from Harvey Norman, Sims Group and Babcock & Brown Power. It is the last day of the Results season (HOORAY!). See the website today for the mass of research post results in the last week – go to the Broker Archive link on the “Broker Stuff” page for over 2,000 broker recommendations in the last year showing the performance since the recommendation….a lot of them miserably embarrassing considering the Bear market and the inability of brokers to write the word SELL.
MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.
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