The market is down 48 — in-line with the 50 point fall predicted by the Futures this morning. Quiet session ahead of Labour Day on Monday.

The Dow was down 281. Down 331 at worst. Fell steadily over the session. US Financials down 9.9% with further concerns over the stability of the big banks. Citigroup dipped below $1. General Motors warned of possible bankruptcy. Moody’s lowered the rating on the Bank of America and Wells Fargo and dropped the outlook for JP Morgan Chase and Co. Friday’s all-important Government Jobs Data not looking good — economists expecting 648,000 lay-offs, more than the 598,000 jobs cut in January — that’s an annualised unemployment rate of 7.9%. Initial jobless claims were down more than expected. 4Q nonfarm productivity was down. Labour costs up more-than-expected. January factory orders down less-than-expected. BHP and RIO both down in ADR form overnight — 6.77% and 5.88% respectively. Metals mostly down. Gold up. Bonds up. A$ down. The European Central Bank lowered its target cash rate to 0.5% from 1% in-line with expectations. The Bank of England said it would buy more assets to further increase Britain’s money supply.

No doubling of the Chinese stimulus package….just a promise to spend and a comment that the global financial crisis “continues to spread and get worse”. The indication is that they think the current stimulus package is enough. Some comments that China risk social unrest if they cannot maintain growth levels of 7-8%.

S&P ASX Index changes have been announced this morning — these changes come into effect on Monday 20th.

Quiet day on the news front:

  • Australian Agricultural Co (AAC) in a trading halt pending an announcement about a “significant transaction.”
  • GUD Holdings (GUD) will buy back up to 5.75m shares.
  • Centro Retail Trust (CER) announces the renewed executive committee.
  • Ausenco (AAX) announce a dividend reinvestment plan.
  • Suncorp-Metway (SUN) up 9% yesterday with 20m shares traded and it is on the front of the newspapers this morning with the story they are looking to sell their banking arm.
  • Merrill Lynch have cut their target price on BHP Billiton (BHP) from $40 to $35 and say “macro outlook is terrible = marginal cost pricing”.
  • Lots of S&P ASX Index changes today – defensives like Coca-Cola Amatil (CCL) and Sonic Healthcare (SHL) replacing the likes of Oz Minerals (OZL) and Alumina (AWC).
  • The extension of the shorting ban on financial stocks from today until May 31st has been criticized by fund managers, hedge funds and commentators.
  • Notable stocks hitting fresh yearly lows today include: AMP (ex dividend today 16c), AWB, Boral, Flight Centre, QBE Insurance, Stockland, Sonic Healthcare, Ten Network, Telstra (14c ex dividend today), West Australian News and Westfield.
  • The Dow Jones futures suggest an 8 point fall on Wall Street tonight. 

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

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