The market is in positive territory — up 3 — bit better than the 15 point fall predicted by the SFE Futures this morning. Very quiet — no major company news.

The Dow was down 79. US Financial up 2.2% — The Bank of America said they could raise capital in the private markets. US Energy stocks up 0.5% in anticipation of an OPEC production cut. All other sectors down. US Material stocks down 1.1%. Warren Buffett said the economy had “fallen off a cliff”. Merger activity in the healthcare sector was unable to lift the broader market. Merck and Co are merging with Schering-Plough Corp for $41.1bn. BHP and RIO both down in ADR form overnight — 2.10% and 6.16% respectively. Metals down, gold down, oil up, bonds and A$ flat.

Nouriel Roubini, a professor at New York University who predicted the financial crisis, says the US is in the 15th month of recession and that unemployment in the US will hit 10% and growth zero next year — said “most of the U.S. financial institutions are entirely insolvent”.

Warren Buffett was on CNBC overnight and says the US economy has “fallen off a cliff”. Predicts further short term pain.

Not a lot going on today…

  • Telstra (TLS) unveiled its super fast cable broadband. Will upgrade its broadband cable network in Melbourne to triple the speed by Christmas.
  • Boral (BLD) to convert US$500m of its US$700m term credit facility to A$.
  • Worley Parsons (WOR) said TSE have had a joint contract win in New Caledonia.
  • Australian Agricultural Co (AAC) have been suspended from official quotation pending the announcement on unfinished negotiations regarding a significant transaction.
  • Newmont Mining (NEM) released an independent community relationship review.
  • TPI Industries (TPI) in an update on its capital structure review said it was continuing talks with its bankers and that a data room had been established as they search for a “corner-stone” investor to assist in the lowering of their debt to $2.18bn.
  • Mincor Resources (MCR) delivered an open briefing on financial results and gave a stronger outlook.
  • Jabiru Metals (JML) released record production numbers and a debt repayment update.
  • Hastie Group (HST) release shares from voluntary escrow.
  • Eastern Star Gas (ESG) in a trading halt.

Other…

  • The World Bank says global economic growth will contract for the first time since World War 1.
  • RIO is selling a coal mine in Wyoming USA for US$761m — part of RIO’s asset sale program. UBS retains a BUY recommendation and a $60 target price. Macquarie say they are selling a non-core asset at a discount to valuation.
  • Macquarie have downgraded Insurance stocks restating investments on a mark to market basis.
  • ABN AMRO have upgraded Macquarie Group from HOLD to BUY. Cut NAB to SELL from Hold on risks associated with their UK operations and exposures in their CDO portfolio. Westpac upgraded to BUY from Hold.
  • Australian business confidence bounced in February on the government’s household focused stimulus measures.
  • February business conditions at a new 17-year low — the 18-year ‘great expansion’ of uninterrupted growth is looking like it might come to an end.
  • February’s Australian Job Ads down 10.4% — the biggest fall in the 10-year life of the index. Signals a collapse in labour demand. Unemployment forecasts likely to be revised higher and GDP expectations to be scaled down.
  • The Dun & Bradstreet survey showed that 27% of executives are looking to cut staff in the 2H.
  • Notable companies going ex dividend today: CSL Ltd (30c), IRESS Market Technology (19c) and Connect East (1c).

The Dow Jones futures suggest a 3 point rise on Wall Street tonight.

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

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