The market is down 26 after being down 53 at its low — underperforming the 81 point rise predicted by the SFE Futures this morning. Resources outperforming — up 0.5%. Financials down 1.2%. Banks all down — CBA down 3.6%.
The Dow was up 36 (0.43%). Up 164 at best. Down 162 at worst. Choppy trading. Main Points: Nasdaq underperformed — down 0.5%. BHP walked away from RIO takeover — volumes trading in BHP were massive. The Fed will provide another $800bn to stimulate the consumer and asset-backed credit markets. 3Q GDP down to a worse-than-expected -0.5% for the 3Q. Consumer confidence up more-than-expected but still critically low. 8 out of 10 sectors up. Small and mid-caps outperformed. A$ down 0.66% against the US dollar. Metals mixed overnight — Zinc up 2.55% and Aluminium up 0.63%. Copper down 1.5% and Nickel down 1.63%. Oil price down 6.7% to $50.05 on the back of uninspiring news about the US economy. Gold down $1 to $818.50. Bonds up with the 10 year yield down to 3.08%.
Big Story of the Day — BHP pulled out of the RIO bid. The announcement came out at 6pm last night. BHP rose 14.51% in ADR form and 7.6% higher in the UK. RIO fell 27% in ADR form and 37% in the UK. Both stocks didn’t trade until 11am this morning. The main reason for the decision to pull out — BHP didn’t believe it could make the asset sales necessary post-merger to reduce the $42bn of RIO debt — would have trouble selling non-core assets. “BHP Billiton is very focused on balance sheet strength”. Cost of the bid was $450m — will be written-off by BHP.
Other news today…
- David Jones (DJS) has announced 1Q sales numbers. Sales down 6.3% but maintain their FY guidance.
- Ausenco (AAX) struggling today on the back of OZ Minerals (OZL) decision to defer capex to 2Q 2009 for its Martabe gold project in Indonesia and Sepon copper expansion project in Laos.
- Atlas Iron (AGO) upgrades its resource at Ridley Magnetite project.
- Albidon (ALB) is no longer in a trading halt. It cut its net debt to US$55m from US$100.
- Babcock & Brown Wind Partners (BBW) says it has no immediate refinancing requirements. It is also in talk with Babcock & Brown (BNB) about their relationship.
- Fortescue Metals (FMG) has suspended construction of the rail line between its Cloudbreak and Christmas Creek iron ore projects in the Pilbara.
- Geodynamics (GDY) has been awarded a $10m in funding by the NSW government.
- Lend Lease (LLC) said its Bovis unit has been named managing contractor for a new office building for Australia’s intelligence agency in Canberra.
- Macquarie Airports (MAP) said Sydney Airport has successfully refinanced $485m of existing capital expenditure facilities and arranged funding for $859m of new capital expenditure.
- Macquarie Group’s (MQG) joint group head of Macquarie Securities Group, Kim Burke announced he will retire.
- QBE Insurance Group (QBE) said it will raise up to $2.1bn in equity to assist in the funding of 5 businesses it has agreed to buy in the US and Europe and to buy back $1.25bn in debt securities.
- Tabcorp (TAH) appoints Larry Mullin as new Casinos Division CEO.
- Kingsgate Consolidated (KCN) said the Chatree North permit process is complete and expects FY09 Chatree output of 100,000-140,000 Oz.
Broker Stuff today…
- Plenty of broker stuff on Harvey Norman (HVN) this morning after announcing a profit downgrade at its AGM yesterday. Both Citi and UBS Warburg cut their target price to 275c and 215c respectively, Macquarie maintained their Outperform recommendation and 303c target price.
- Qantas (QAN) also cut their earnings yesterday — JP Morgan, ABN AMRO and Macquarie Equities all maintain their Neutral recommendation with JP Morgan and ABN cutting their target price to 310c and 245c respectively. They don’t think QAN has turned the corner just yet.
- Macquarie Equities expects the RBA to cut interest rates by 75bps when they next meet.
- The Dow Futures suggest a 30 point fall on Wall Street tonight — their bond market closes early at 2pm because of Thanksgiving Holiday.
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