The market is up 40 — a little disappointing considering the 72 point rise predicted by the SFE Futures this morning. BHP has been holding up the market all morning — boosting the index 28 points alone at midday.
The Dow was up 149. Up 253 at best. Up all session. All sectors bar financials up. Market rallies after 5 days of selling. US Market up on the details of the Government’s plan to assist up to 9m borrowers stay in their homes as part of the Homeowner Affordability and Stability Plan. ISM services index was in-line. Government jobs data due out Friday is expected reveal 7.9% unemployment. The Fed’s Beige Book gave depressing news about the deterioration in the broader US economy. Financials closed 3.5% down. Diversified banks down 10.2% on investor concerns about news that Bancorp (Minneapolis-based bank) will cut its dividend by 88%. Gold and bonds down.
GOOD NEWS FOR FINANCIALS…..ASIC HAVE EXTENDED THE SHORTING BAN ON FINANCIALS in Australia – it was supposed to expire on Friday (March 6th) but has been extended to the 31st May.
Australian Resources impressing on the back of expectations the China’s National People’s Congress will significantly increase their US$585m stimulus package after comments from the Chinese Premier who reiterated the 8% GDP growth target for 2009 in a speech to lawmakers. Oil jumped 9% overnight on the back of the news and metals rebounded strongly. The February Chinese Purchasing Mangers Index (PMI) was also up for the third month on the trot. Chinese stockmarket up 6.1% yesterday.
- Lihir Gold (LGL) out of a trading halt this morning having completed their US$325m institutional placement at $3.00 /share.
- Goodman Fielder (GFF) said their strategic review is well advanced with no significant writedowns planned and said they were well within their banking covenants.
- Worley Parsons (WOR) wins a trans-Canada Keystone pipeline contract.
- Santos (STO) announced Apache as operator of the Reindeer Project Joint Venture has signed up Clough Projects Australia (CLO) for the engineering. Clough shares up 18% on the news.
- OMH Holdings (OMH) make a substantial increase to resources and reserves.
- Bank Dividend Forecasts Cut – Goldman Sachs JB Were have cut their dividend forecasts for the major banks for 2009 – they cut CBA’s dividend forecast by 12%, the NAB and WBC 20% and ANZ by 26%.
- Media – Credit Suisse says the advertising and media industry won’t recover until 2011.
- The front page of The Australian business section tells us that RIO are talking to BHP about a potential merger of their WA iron ore operations.
- Citigroup says Boral is not considering a capital raising and believes the US market will bottom this year. Despite that they retain a SELL recommendation.
- January dwelling unit approvals fell by 3.7% – a rise of 1.75% was expected. The weak number only supports the idea the Australian economy is already in recession.
- January’s trade surplus was down to $970m verses the $1.1bn forecast, with trade dropping sharply – imports were down 7% and exports down 5%.
MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.
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