The market is down 113 at 11.47am. Trading on its lows in a quiet day for news. That compares to a 48 point fall suggested by the Futures this morning. Dow down 157 on Friday. Up 313 at best — down 173 at worst. Dow Futures are DOWN 165 this morning. Suggests another fall on Wall St tonight.

Main Points in US on Friday:

  • Bailout package passed but failed to lift the market. “Not enough” seems to be the economist response with suggestions that the US cannot recover the credit crisis alone and that we will need a cross country collective approach to rescue measures before things can stabilise and any confidence return.
  • Non-farm payroll numbers weaker than expected. They were down for the ninth consecutive month. Fell 159,000 against the 105,000 expected. Economy weaker than expected.
  • Financial sector lost a 4.9% gain to close down 4.0%.
  • Wachovia up 58% on a bid from Wells Fargo that topped Citibank’s bid and sent Citibank into legal action, they thought it was a done deal with the FDIC. Wells Fargo bid at an 80% premium to the market price.
  • Germany forced by the pre-emptive decisions by European Union members Ireland and Greece to also guarantee government bank account deposits.
  • There are expectations the Fed will cut rates at their next meeting (instead of raise them) and that they may even convene early to cut rates early.
  • ISM non-manufacturing index for September came in at 50.2 and was largely ignored.

MAIN AUSTRALIAN STORIES TODAY … pretty quiet if you ignore the fact that we continue to fall into a hole:

  • Speculation confirmed by Suncorp-Metway that they have received approaches. Market thinks the CBA may be the bidder and may make an all scrip bid for the company although its got to be said — no-one should be in a rush to buy financial assets at the moment — probably get them cheaper later. SUN up 6.1%.
  • ABN says BUY banks — “We believe the impending bailout is likely to accelerate the process of recognition of losses and, in conjunction with the diminished counterparty risk, should see confidence return to global funding markets”. Falling on stoney ground today. Perpetual fund a manager says “Growing market share is a positive for banks and although bank share prices are likely to remain volatile, the situation will stabilize and current market valuations may represent some of the best buying opportunities in the cycle for the patient investor”.
  • PaperlinX (PPX) in a trading halt still as they put together a “well supported” $200m institutional share placement. Expect to raise $100m from retail shareholders.
  • A$ down to 76.08c down 0.75c.
  • Kevin Rudd says: “It is perhaps time now to admit that we did not learn the full lessons of the greed-is-good ideology. And today we are still cleaning up the mess of the twenty-first century children of Gordon Gecko”.
  • RBA injects $131m in daily liquidity operations.
  • Volumes subdued with holiday in NSW. Volumes are running at about $4.7bn a day. In the bull market they were averaging $6.7-7.0bn a day. The ban on shorting thought to have further impacted on some businesses.
  • Last week was the worst week for the Dow Jones since September 2001.
  • Some of the bigger fallers: NAB down 4.0%, RIO down 2.8%, BHP down 1.1%, Fortescue Metals down 6.4%, Oz Minerals down 6.4%, Western Areas down 6.5%. Property Trusts down 4.4% as a sector.

Main events this week:

  • It’s a public holiday in NSW, SA and NT. Non-settlement day on the ASX. Clocks have gone forward but not in WA so the market is now opening at 7am in WA for three weeks.
  • RBA Meeting tomorrow — 100% chance of a 25bp interest rate cut and 94% chance of a 50bp cut. The general expectation is that the RBA will cut 50bp but that the banks, struggling with higher interbank lending rates (where they get half their funding) will only pass on 25bp.
  • US Results season starts this week: Alcoa on Tuesday and General Electric on Friday the most keenly watched this week.
    • Monday: Thor Industries
    • Tuesday: Safeway, Alcoa, YUM Brands
    • Wednesday: Costco, Monsanto
    • Thursday: Infosys
    • Friday: General Electric
  • Main US economic events: FOMC Minutes tomorrow, Home sales Wednesday, Trade Balance Friday
  • Fed Chairman Bernanke speaks at National Association for Business Economics annual meeting on Tuesday.

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