The market is down 12 after being up as much as 35. The SFE Futures were up 44 this morning. Our market has lost a 35 point gain this morning with the falling starting with the release of the weaker than expected jobs numbers which saw unemployment up from 5.1% to 5.3% in August. The A$ dropped on the news. The numbers tend to confirm the recent post RBA Meeting impression that interest rates have already peaked. Brokers are now firming up on their hopes for an October interest rate cut…much to the annoyance of all those investors now looking towards term deposits.

The Dow closed up 275 points overnight. Financials were up 4.8% after losing 8% over the past 3 days. European markets were up as a German court rejected a lawsuit seeking to declare German participation in EU bailouts as unconstitutional. The Fed’s Beige Book found that “Economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity”. Obama’s jobs speech is scheduled for tonight — he is expected to propose $300bn of tax cuts and government spending to boost jobs. The oil price was up $3.32 to $89.34 and the gold price was down $55.70 to $1817.60. The Aussie dollar was up at 106.54¢ from 104.86¢.

Today’s news …

  • Total employment fell by 9,700 jobs in August with 12,000 fewer full time jobs created and 2,900 more part time jobs. Total employment was forecast to rise by 12,000.
  • On the back of the weak jobs numbers one of the worst performing stocks this morning is Seek (SEK) which is down 3.4%.
  • Foster’s Group (FGL) – The takeovers panel has decided that it won’t act on issues raised by SABMiller about Foster’s outlook statements. FGL up 2¢ to 486¢.
  • Ausenco (AAX) has received two Letters of Intent to deliver $70m of engineering services for two separate copper projects. The combined installed capital value of the projects is in excess of US$3 billion. AAX up 1.2% to 257¢.
  • Stockland (SGP) has gained approval from Queensland’s Urban Land Development Authority to build a residential community centre comprising about 700 homes.  SGP down 1¢ to 293¢.
  • Anti-mill group Pulp the Mill has launched legal action in the Hobart Magistrates Court to prevent further works on Gunns (GNS) Tamar Valley pulp mill in northern Tasmania. The group argue that Gunns no longer has planning permission to build the mill which is an offence against the Land Use Planning and Approvals Act.  GNS last traded at 21¢.
  • Aquila Resources (AQA) has gone into a trading halt as they prepare to make an announcement in relation to their Eagle Downs Hard Coking Coal Project.  AQA last traded at 603¢.
  • Stocks hitting 52-week lows: AJA, BCS, CNP, CTY, FPH, PPX, SXE, TAH.

Which stock you buy for a ‘market bounce’ rather than a stock story specific bounce is down to what sort of investor you are. The more timid will be buying the banks, Telstra and BHP and that will be where the brokers focus… telling people to buy the ‘moron stocks’ is easy stuff and easily defended on a ‘long term opportunity’ basis.

The ‘hair on fire’ people amongst you will be buying the disaster stocks…the worst performers, the profit warning stocks, the big fallers…they include:

  • Macquarie (MQG)
  • Goodman Fielder (GFF)
  • Wotif (WTF)
  • Caltex (CTSX)
  • Bluescope (BSL)
  • Seven West Media (SWM)
  • QBE Insurance (QBE)
  • Billabong (BBG)

But from a Marcus Today point of view… sorry… can’t buy into it yet… I won’t put up a trade I wouldn’t do myself… and I’m happy not to gamble in this volatility… I can’t lead anyone into this mess and anyway… technically the move is too quick to trigger any reliable buy signals. Join Marcus Today to read more.

For a five day FREE TRIAL of the MARCUS TODAY newsletter Click Here. You will receive our renowned and popular Daily email about the stockmarket with all the stuff you need to know ahead of the trading day including:

  • Overnight developments, news, comments, rumours, broker recommendations and ideas from Marcus and his Team.
  • Our Portfolio recommendations which is actively managed on behalf of subscribers…no “set & forget”. Everything you need to effortlessly managed your own long term investment portfolio.
  • Daily Technical Trading ideas and data, including daily scans of the ASX 300 for stocks changing trend.
  • Stock Database – all the numbers with comments on the top 300 stocks and more.
  • Educational section — Marcus’s Educational and Entertaining articles.

Subscribe to MARCUS TODAY.  We are sure you will enjoy and profit from what we offer…we have one of the highest re-subscription rates in the financial newsletter industry.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.


Peter Fray
Editor-in-chief of Crikey