The market is up 15. The SFE Futures were up 8 this morning.

The Dow Jones closed up 17 overnight. Dow up 86 at best and down 78 at worst. The quick formation of a new Italian government boosted the mood, while US economic data was also positive. Italian prime minister-designate, Mario Monti, is expected to have formed his new government in less than 3 days but Italian 10-year bond yields surged passed 7% again, a level that is perceived to be unsustainable.

French bonds were also up, jumping to 3.683, more than twice as much as Germany has to pay to borrow. US retail sales increased 0.5% in October, down from 1.1% growth in September and the Producer Price index fell 0.3% in October after rising 0.8% in September. The oil price increased to $1.27 at $99.41 and the Gold price put on $3.70 at $1782.10. The Aussie dollar dropped to 101.79c from 102.04c.

Main points:

  • Commonwealth Bank (CBA) released their 1st Q 2012 Trading Update yesterday. The market was a little disappointed with their outlook comments. The main message was that business will be tough for the next couple of years…at least. The broker commentary this morning is rather uninspiring. We had Citi downgrade to a Sell and no upgrades in recommendations. The general concern is that CBA perhaps doesn’t warrant trading at a premium to the rest of the banks and sector.  CBA down 32c to 4883c.
  • Gloucester Coal (GCL) has upgraded the resources available for mining at the Monash Coal projects in the NSW Hunter Valley. GCL down 2.6% to 700c.
  • Atlas Iron (AGO) has announced they will buy Gondwana Resources’ 90% stake in the Corunna Downs project in WA for $2.1m in cash. Gondwana will retain a royalty of $1.13 per tonne for all iron ore mined at Corunna Downs. AGO down 2c to 317c.
  • QR National (QRN) has announced that all conditions on a 10 year, $900m rail haulage agreement with Gindalbie Metals (GBG) has been finalised. QRN down 2c to 350c.
  • Starpharma (SPL) up 2% to 110c after raising $32m through a share placement to accelerate several of their product developments.
  • iiNet (IIN) has been placed in trading halt this morning. According to the AFR, IIN may be acquiring TransACT. Patersons maintain their Buy recommendation and 320c target price. IIN was down 5c to 236c this morning before shares were suspended.
  • The index of internet job vacancies in Australia fell in trend terms by 1.9% in October from September and fell 6.3% on year. The index currently stands at 84.8 and is 42% below their March 2008 peak

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