The market is up 34. The SFE Futures were up 55 this morning.

The Dow Jones closed up 330 overnight at its session high. US and European markets were higher after German Chancellor Angela Merkel held talks with French President Nicolas Sarkozy in Berlin on Sunday where they agreed to find a sustainable solution to the eurozone debt crisis. Metals were up on the LME. The gold price put on $41.50 to $1677.30. The oil price put on 3.5% to $85.88. The euro had its biggest gain against the $US in 15 months. The Australian dollar moved back above parity overnight, rising more than US 2.5 cents. It is currently buying 99.81 cents, up from 97.52 cents. Earnings season kicks off in the US tonight.

  • Extract Resources (EXT) emerged from its trading halt and confirmed recent speculation that it has restarted discussions with the China’s Guangdong Nuclear Power Holding. EXT was up 10% Monday before entering the trading halt. EXT down 2.6% to 863¢.
  • Kagara (KZL) – lead, zinc and nickel production rose in the September quarter and some operating costs fell, in line with its newly outlined strategy. KZL up 2.3% to 44.5¢.
  • Decmil Group (DCG) has been awarded a $70 million contract for Chevron-operated Wheatstone LNG Project Fly Camp on Western Australia’s Pilbara Coast. DCG up 11.3% to 217 cents.
  • The FIRB will not progress Hanlong Mining’s $1.65 billion takeover bid for Sundance Resources (SDL) until it has a better understanding of the findings of the ASIC investigation into insider trading by Hanlong executives. Sundance directors recommended the bid after Hanlong upped its offer by 7 cents to 57 cents a share. SDL unchanged at 43.5 cents.
  • BHP Billiton (BHP) is expected to commit to a staged $30 billion expansion of its Olympic Dam copper/uranium/gold mine in South Australia early in 2012 after receiving securing government environmental approvals yesterday. BHP up 17 cents to 3727 cents.
  • Woolworths (WOW) new chief executive Grant O’Brien, who replaced Michael Luscombe on October 1, will be paid $1.9 million in his first year in the job, but that could more than double with performance-based incentives. WOW down 32 cents to 2453 cents.
  • The NAB Business Survey showed that business conditions rose 5 points to +2 points in September, moving above the zero level that separates expansion from contraction. The improvement was thanks to a falling Australian dollar and talk of an interest rate cut.
  • We have been in a bear market for six months and suddenly, after four days ruminating some pretty woolly promises from the French and German governments we are in a bull market. The reaction on the desk ranges, as you might imagine, from “sell into strength you can’t trust it”, to “who knows what to do in this volatility”, to “go with it”, to “this is the start of a long term bull market, get on board”. It is certainly a short term rally, the market is in uptrend on MACD on a daily basis. But the daily data is highly volatile making the short term trend effectively uninvestable — in this volatility it can “whipsaw” in the other direction just as quickly on little excuse.

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