The market is up 28 outperforming the 25 point fall predicted by the SFE Futures this morning. BHP and RIO both down 1.7% and 1.0%. Financials and property both up — banks all up after yesterday’s gains – NAB outperforming — up 4.1%. Macquarie Group down 1.8% today — a couple of brokers suggest it has done its dash — Both Royal Bank of Scotland and Citi cut their recommendation to Hold from Buy due to its recent outperformance. The stock is up 47% so far this month.
The Dow was down 115. Up 21 at best. Down 129 at worst. Held onto most of the gains from Monday’s trading. No positive economic data or corporate data to lift the market. Financials down 6.5% — led the market down. Geithner asks Congress from more sweeping powers to close down failing companies. Energy and tech stocks down 2.2% and 1.6%. Asian markets up. European markets mixed. BHP and RIO both down in ADR form overnight — 5.37% and 2.10% respectively. Metals down. Oil up. Bonds down. A$ flat.
No major announcements this morning.
- The ANZ, at the Asian investor conference, note the following points: Further rate cuts will take place in 2009. Seems likely the cash rate will fall to 2% by 2H09. Their underlying business is performing well. FY09 cash earnings expected to be around FY08 levels. Strong year-to-date deposit growth.
- Murchison Metals (MMX) give a litigation update.
- Woodside Petroleum (WPL) announce a price for their dividend reinvestment plan.
- DUET Group (DUE) said its 79.9% owned Multinet has secured funding to refinance $135 million in medium term notes.
- Citadel Resource Group (CGG) in a trading halt.
- Oil Search, Santos, Beach Petroleum and Eastern Star Gas flying on takeover speculations with consolidation in the Coal Seam Methane (CSM) space.
- Equinox (EQN) up another 5c to 222c this morning. It remains in uptrend and one of the best copper price exposures. Chinese Copper imports were up 44% in February in what looks like stockpiling ahead of the stimulus package kicking it (much like iron ore at the end of last year). The copper price is up 27% from recent lows whilst LME stockpiles have dropped 8%. EQN is up 50%.
- Telstra — Suggestions a major institutional fund manager who lost a mandate has recently sold 200m shares … helping explain the recent share price weakness.
- Some people wondering why CSL has been such a poor performer. It seems 7% shareholders FMR LLC and FIL has been selling relentlessly on market … and they still have 6%.
- Merrill Lynch have downgraded Wesfarmers (WES) from Neutral to UNDERPERFORM on the back of coal prices and the expectation of lower returns from supermarkets after Woolworths “upped the ante … potentially putting its own returns at risk in order to strategically disadvantage its competition — namely Coles… we think a Coles’ turnaround is unlikely”. They say 2010/2011 will be tough years. They have a 1650c target price down from 1750c.
- Merrill Lynch have also downgraded WorleyParsons (WOR) to UNDERPERFORM on expectations that capital expenditure in the oil & gas industry will fall 20% in 2009 and 18% in the metals & mining sector. 85% of EBITDA come from those sectors.
- CPI (inflation) in the UK came in at 3.2% against expectations of 2.6%
- 4Q GDP Number (Final) out in the US tomorrow night. Expecting a 6.2% fall although some brokers forecasting -6.6%. A weak number could potentially pop the recent bubble.
- McKinsey report that with a drop off in capex in the oil and Gas sector over the last year and ahead we risk another oil price spike the moment the global economy starts to recover.
The Dow Jones futures suggest an 11 point rise on Wall Street tonight.
MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.
For a free 5 day obligation free trial of the MARCUS TODAY newsletter (and no, we won’t ask for a credit card number) please START A FREE TRIAL — you will receive two daily emails about the stockmarket, our MORNING EMAIL with all the stuff you need to know ahead of the trading day ahead and a DAILY EMAIL with all the midday events, news, comments and Ideas from Marcus and his Team.
You will also be given a password to the MARCUS TODAY website including access to all the emails as well as Educational, Entertaining and Researched Articles from Marcus and his Team and an archive where you can catch up on a whole week or month in just a few minutes. Or Browse at length. We are sure you will enjoy and profit from what we offer. Find out now. GET STARTED and hopefully one day we will Welcome you onto the Membership List. We have one of the highest re-subscription rates in the financial newsletter industry. Thousands of subscribers enjoy and profit from our services every day. Join us.