The market is down 3 after being up 19 points earlier in line with the 13 point rise predicted by the SFE Futures this morning. Financials down 2.2% taking a breather today after consecutive days of gains, not helped by US Financials which went backwards overnight. Resources up on higher metals and commodity prices. US$ down — Aussie dollar up.

The Dow was down 85. Up 62 at best. Down 117 at worst. Market down after a two-week 14% rally.

Down on fears relating to the $1 trillion the government will inject into the financial system through buying treasuries, and buying assets and debt from the balance sheets of Fannie Mae and Freddie Mac. Financials down 8% after a 60% rally in two weeks — led the market lower. Citigroup down 12.7% and JP Morgan down 7.9%. Citigroup said they will do a reverse share split. Energy (+1.4%), materials (+1.4%) and commodity index up (+5%) on higher metal and oil prices and a lower US$. GE up on saying it will book profits this FY. Fed Ex posted 3Q profit down 75% — plans more job and cost cutting. Oracle and Nike beat Qrly expectations. BHP and RIO both up in ADR form overnight — 5.23% and 3.93% respectively. Metals and commodities up strongly on the lower US$. Gold up $69.70. Bonds flat. A$ down slightly.

Fortescue Metals — The FIRB have extended the consideration period for the Hunan Valin investment in FMG for another 30 days. Hunan Valin Iron and Steel has committed to acquire 260 million shares to be issued by FMG for consideration of $644.8 million ($2.48/share). Analysts comment that the extension to the timeline of Valin funds being received places FMG in a tight position in terms of working capital although they’re not in breach of covenants. One analyst moves valuation down to $2.02/share versus last trade at $2.32/share and will revisit this recommendation following iron ore price negotiations and receipt of Valin funds.

  • Mirvac (MGR) will cut their distribution ~40% to 8-9c for FY09 to strengthen their balance sheet. Already paid 7.8c in the 1H so won’t pay a distribution for the March quarter.
  • Goodman Fielder (GFF) announce a new $100m loan facility. Said they’re comfortable with banking covenants.
  • Macquarie Airports (MAP) said global traffic was down across its international airports in February — Traffic at its key Sydney Airport down 7.8% on-year. Declines were more severe across its European airports.
  • Murchison Metals (MMX) in a trading halt pending an announcement on WA Port and Rail.
  • Mineral Deposits Ltd (MDL) in a trading halt pending the outcome of a placement of ordinary shares of which proceeds will be used for the partial repayment of a US$35m working capital facility provided to MDL by RMB Australia Holdings and Macquarie Group.
  • Gloucester Coal (GCL) yesterday received FIRB approval for Whitehaven (WHC) merger – WHC have requested review of the Takeovers Panel decision.
  • Mirabela Nickel (MBN) completes C$120m offering of subscription receipts.
  • IBA Health Group (IBA) announce their retail entitlement offer.
  • Energy Resources Australia (ERA) said at their GM that long term uranium demand remains strong.

Other…

  • Macquarie Group struggling this morning following their recent 55% bounce of their lows — still down 76% off their high. Other financials having had a big run are Challenger FSG (CGF), AXA Asia Pacific (AXA) and QBE. QBE off over 4% this morning.
  • UBS Warburg cut James Hardie to Neutral from Buy — 420c target price — they say the 30% fall in housing starts over the last three months is yet to be reflected in JHX earnings. “44% rally from one-year low … and we think 27% in one month seems about enough for the time being.”
  • Credit Suisse keep Telstra at Neutral with 390c target price — “Despite the small scale of the contravention, we believe the timing of the proceedings around the Federal Government’s announcement on the National Broadband Network (NBN) is more negative for TLS than the legal action itself. The breach by TLS enhances the Government’s argument on the need for a true open access NBN.”
  • The Australian government is telegraphing lower growth forecasts and a deteriorating budget deficit for the May 12th Budget release as the IMF sharply lower the global growth outlook. Wayne Swan says a deeper global recession will mean Australian GDP will be lower with the jobless rate higher. Kevin Rudd said a greater global contraction will “obviously have an effect on our budget bottom line”.
  • Barclays raises their gold price forecast to average $940 /oz during 2009 and $925 /oz in the 2Q. Says gold will shine on weak US$.

The Dow Jones futures suggest a 35 point fall on Wall Street tonight.

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