The Dow was up 90. Up 176 at best. Down 138 at worst. Stocks up for 6 out of the last 7 days. Dow Jones now up 15.7% from the bear market low hit 7 days ago. S&P 500 spent most of the day above 800 but closed at 794.

FEDERAL RESERVE left interest rates between 0% to 0.25% and SURPRISED THE BOND MARKETS with a plan in its statement overnight that they will buy $1 trillion of US bonds ($300bn of longer term bonds over the next 6 months) to increase money supply, provide liquidity, lower interest rates, lower mortgage rates and end recession. The Fed also said they’d buy an additional $750bn in mortgage backed securities from Freddie Mac and Fannie Mae and would boost their purchase of debt from Fannie and Freddie to $200bn. Housing stocks up again in the US — also Fannie Mae and Freddie Mac both up over 40% — good for Boral, CSR and James Hardie.

BHP and RIO mixed in ADR form overnight – BHP up 2.15% and RIO down 2.30%. Metals mostly down. Oil down. Gold up in after market trading. Bonds up.

Over to our market…

RIO’S CHINALCO DEAL — Main issue in the market yesterday and today is the growing expectations that the Chinalco deal investing $19.5bn and buying 18% of RIO plus stakes in some assets will not be allowed through in the national interest. This follows public advertisements from MP Barnaby Joyce against the deal and now the Senate has voted for its economics committee to hold an inquiry into the issues surrounding foreign investments in Australia. RIO struggling in a rising market.

In the news today…

  • Telstra (TLS) has an all time low of 293c after the ACCC said it’s taking it to court over access to its network. Penalties that the ACCC are seeking are not clear.
  • BHP Billiton (BHP) has raised US$3.25bn in a bond issue to use for general corporate purposes. It issued US$1.5bn of senior notes with a coupon of 5.5% due 2014 and US$1.75m with coupon of 6.5% due 2019.
  • ABB Grain (ABB) is optimistic about 2009 and expects net profit to be between $63-$73m.
  • AXA Asia Pacific (AXA) doing well after appointing Stuart Harrison as CEO of AXA Hong Kong.
  • Commonwealth Bank (CBA) has raised $865m from issue of around 33.3m shares under Share Purchase Plan at 2600c each.
  • Macquarie DDR Trust (MDT) in a trading halt — it will release details of its strategic review.
  • Mineral Deposits (MDL) said gold production at its Sabodala plant in Senegal started this week.
  • Carbon Energy (CNX) says its coal resource upgrade has exceeded expectations.

Other Stuff…

  • Deutsche Bank says the Australian ad market will fall by 6.3% in 2009, more severe than their previous expectations of a 4.7%. They maintain their Underweight rating on the sector with their best pick being Consolidated Media (CMJ), Austereo (AEO) and Austar (AUN).
  • Citi has upgraded its Gold price forecasts to $856 from $825 for 2009, 2010 forecast to $925 from $900 because of stronger-than-expected demand.
  • Promising response from brokers this morning regarding David Jones’ result yesterday — Macquarie Equities maintain their Outperform, Merrill Lynch upped their target price to 328c and both GSJB Were and Royal Bank of Scotland maintained their Hold recommendation.
  • Total number of dwelling commencement of unit dwellings fell by 7.5% in the quarter to December.
  • Sales of new motor vehicles fell 1.1% in February.
  • The Dow Futures suggest a 32 point fall on Wall Street tonight.

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