The market is up 75. The SFE Futures were up 60 this morning as the US market fell less than expected.

The Dow closed down 101 points overnight and was down 308 at worst. The Swiss franc fell 10% against the euro as Switzerland said they will peg the franc to the euro.  A positive outcome from an inspection by the IMF, ECB and European Commission is required before Greece receives further financial aid. The VIX volatility index was up 9.4% – its biggest gain in nearly 2 weeks. The oil price lost 43¢ to $86.02 and the Gold price was down $3.60 to $1873.30, but hit a new record high of $1920 during the day. The Aussie dollar fell to 104.86¢ from 105.42¢.

Today’s news …

  • Australia’s GDP rose 1.2% in the June quarter, after a revised 0.9% fall in the March quarter. This was higher than the 1.1% expected. In the year to June 30, GDP grew by 1.4%, against expectations of +0.7% and Treasury’s forecast of 2.25% made in the May budget.
  • Macquarie Group (MQG) – Profit Warning – says their first-half 2012 profit will be lower than for the year-earlier period as they battle “difficult trading conditions”. However, they still expect the full year 2012 result to be improved on 2011 but this depends on “conditions not deteriorating”.  Macquarie also announced that they are working with a consortium on a potential bid for Royal Bank of Scotland’s aircraft leasing business which is reportedly worth more than US$6 billion. MQG down 7c to 2309c.
  • Banks are up today on a better than expected interpretation of the Basel III capital requirements by APRA which appear to negate the need for banks to have a round of capital raisings.
  • News International, a unit of News Corp (NWS), is cutting 110 staff jobs in Britain, hitting all three of its publications. The company also said that 89 former employees of News of the World had accepted settlements to resign. NWS up 3.02% to 1571c.
  • Bradken (BKN) have announced the planned retirement of CFO, Mr Bruce Arnott, from the Company in December 2011. Mr Steven Perry will replace Bruce as CFO. BKN up 3c to 726c.
  • The AIG-HIA performance of construction index (PCI) fell 4 points to 32.1 in August – its lowest level in almost 2½ years and it 15th straight month of falls. They blame say the fall is largely due to a lack of new work and tender opportunities.
  • The RBA decided to leave interest rates on hold at 4.75% for the 9th consecutive month at its monthly board meeting yesterday. The general consensus is that they have moved to an even more neutral bias from a tightening bias and have taken a further step towards easing.

So we’re waiting for Thursday night to see what the German Courts and Obama come up with. No-one in their right mind would be launching into the market ahead of the German Court decision, except to take a bet on the outcome….the odds are in favour of a good outcome but the price of getting that wrong will keep most people from making the bet in the first place and even if it is OK, there is still some significant uncertainty in the markets to keep you from doing anything more meaningful than trying to snag the odd dollar in the short term.

Worth re-iterating from a Marcus Today point of view, we are not so stupid as to paint ourselves into a permanently bearish corner, we are making no grand long term declarations (the Achilles heel of any adviser). Making money in equities is about playing probabilities and there are no definites. At the moment the probability is that the market is going to remain in downtrend and that’s where we are…..but it can change at any time. We will continue to assess it every day and you can read that assessment at Marcus Today.

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