Our market is up 81 well ahead of the 16 point gain predicted by the SFE Futures this morning. Resources pumping — up 5.0% led by both BHP Billiton and Rio Tinto after a strong night on the London Metals Exchange. Oil closed up 3% — Woodside up 3.6%. The FOMC decides on interest rates tonight — with US rates basically at zero, all we can expect is a statement on the economy.

Dow closed up 38 overnight. Up for most of the session but was dragged down by sustained fears around the banking sector. Financials down 2.1%. Caterpillar down 10% — announced FY09 profit would be down dramatically on-year and will make hefty job cuts. Biggest pharmaceutical takeover was announced – with Pfizer making a $68bn takeover bid for Wyeth. McDonalds posts strong results. December existing home sales unexpectedly up due to plummeting house prices. December’s economic activity up 0.3% due to government cash injections. Home Depot, Sprint Nextel Corp, Pfizer and General Motors all cutting jobs.

Good news for Wesfarmers — the institutional entitlement offer from WES raised the $2bn they needed with the institutional bookbuild element being placed at $15 against a rights price of 1350c with the company clearly seeing “strong demand”. Good for the market and Wesfarmers to see the support after such a poor share price run.

Tolhurst Group (TNL) has gone into a trading halt — talk is that it has been bid for by another broker having overextended themselves in the bull market — they have been forced into discussions by debt, excessive costs and a dwindling revenue base.

  • Rio Tinto (RIO) announced the sale of the Alcan stake in Ningxia aluminium smelter and said its iron ore ports in WA are closed until Wednesday due to a cyclone.
  • Oil Search (OSH) reported a 13% rise in operating revenue for 2008 at US$811.6m. 2008 oil and gas output was in-line with guidance at 8.58MMBOE.
  • Centennial Coal (CEY) said 2Q production was up 11% on-quarter and up 25% on-year. Said thermal coal exports were strong.
  • Babcock and Brown Capital (BCM) announced it expects a material reduction in investments and expects net assets below $937m in December.
  • Macquarie Countrywide (MCW) will sell 30 US malls for US$427m to reduce debt and meet its refinancing obligations in the 2H of 2009.
  • AGL Energy (AGK) declares the Sydney Gas (SGL) offer unconditional.
  • Macquarie Infrastructure Group (MIG) posted 4Q traffic down 4.1% on-year and revenue down 2%.
  • Lihir Gold (LGL) said production out of its PNG mine has been interrupted by a land dispute.

Broker Stuff today…

  • GSJB Were keep a HOLD on Woolworths with 3145c target predicting sales growth of 6.8% in their food and liquor division.
  • Lihir Gold’s target was cut to 250c from 320c by Credit Suisse due to cuts in their gold price forecasts.

In other news…

  • Citigroup cuts 2009 commodity prices by an average of 35% — copper cut 38%, aluminium by 40%, and iron ore by 30% for 2009/10 contract year.
  • JP Morgan analyst says Valad Property Group (VPG) may be in the breach of its interest coverage ratio due to impairments on its VCS and Crownstone investments — Valad is in talks with its lenders to restructure facilities and covenants.
  • Results season starts this week with diversified industrial groups Alesco and GUD Holdings who report half yearly figures — they’ll be closely scrutinized for the impact of the global financial crisis and the slowing national economy.
  • Australian 4Q PPI up a more-than-expected 1.3% from the 2Q against the forecast of just a 0.3% rise — mainly due to higher import prices on the back of the falling A$.
  • The Dow Jones Futures are predicting a 44 point rise on Wall Street tonight.

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

For a free 21 day obligation free trial of the MARCUS TODAY newsletter (and no we won’t ask for a credit card number) please START A FREE TRIAL — you will receive two daily emails about the stockmarket, our MORNING EMAIL with all the stuff you need to know ahead of the trading day ahead and a DAILY EMAIL with all the midday events, news, comments and Ideas from Marcus and his Team.

You will also be given a password to the MARCUS TODAY website including access to all the emails as well as Educational, Entertaining and Researched Articles from Marcus and his Team and an archive where you can catch up on a whole week or month in just a few minutes. Or Browse at length. We are sure you will enjoy and profit from what we offer.

Peter Fray

Save 50% on a year of Crikey and The Atlantic.

The US election is in a little over a month. It seems that there’s a ridiculous twist in the story, almost every day.

Luckily for new Crikey subscribers, we’ve teamed up with one of America’s best publications, The Atlantic for the election race. Subscribe now to make sense of it all, and you’ll get a year of Crikey (usually $199) and a year’s digital subscription to The Atlantic (usually $70AUD), BOTH for just $129.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW