The market is up 49. The SFE Futures were up 20 this morning.

Dow Jones down 17 — Not much to go on overnight — London closed for the Diamond Jubilee celebrations (so no LME trading). Factory orders fell for the third time in four months (-0.6% versus Est +0.2%). US market still weighed down by last Friday’s jobs numbers. Dow up 25 at best and down 83 at worst. BHP fell 0.3% in ADR form but was up 55c on last nights close in Australia. Banks in the US had a rough night — JP Morgan, Citigroup and Goldman all down around 2% on talk of a credit rating downgrade for Morgan Stanley (down 2.91%). European markets up — Spain up 2.88% on some softening in the Merkel stance with pressure on her to agree to EU support for European banks and Spanish banks in particular. Spanish 10 year bond yields hit a high of 6.569% before closing lower at 6.41%. European commission debating giving EFSF money to Spain. Oil up 75c. Gold down $8. Aussie dollar down buying $97.22.

Main points:

  • Wayne Swan has given a press conference this morning the main point of which appears to be the statement that a Budget surplus gives the RBA “maximum flexibility” at its meeting today. In other words he is giving as direct a message as he can to the RBA to cut rates — surely he would do that behind closed doors, in which case he is playing politics — laying the groundwork to claim the credit for any rate cut.
  • RBA Meeting today 2.30pm – nine economists expect no change, 14 expect a 25bp cut, 4 expect a 50bp cut.
  • Qantas Airways (QAN) has put out a profit warning. They now expect a fall of up to 91% in their FY profit due to European economic volatility, high Aussie dollar and increased fuel prices. Profit is expected to be in the range of $50m-$100m down from $552m in the previous financial year. The loss will also include a one off cost of $100m which is associated with industrial action that occurred this year. The international arm is expected to post a loss of earnings of $450m whereas the domestic arm is forecast to deliver earnings of more than $600m, up from last year. QAN shares are down 40% in the last 11 months and have hit an all time low today. QAN is down 15.49% to 120c. It will not he the last profit warning before the results season.
  • Sundance Resources (SDL) have finalised terms on the development of their iron ore project with the Cameroon Government and takeover suitor China’s Sichuan Hanlong Group. SDL is up 3.13% to 41c.
  • Australia recorded a current account deficit of $14.89bn in the March Q resulting in a 0.5% drag on growth in the March Q GDP. The market consensus forecast was for a deficit of $14.65bn in the quarter.
  • Virgin Australia (VAH) announced that the Abu Dhabi owned Etihad Airways has taken a 3.86% stake. The Arab Emirates-based airline acquired the holding through a series of on market purchases. The strategic move will help strengthen an alliance between the two companies which was formed in 2010. VAH is trading on a PE of 9.5x which is lower than their competitor Qantas (QAN) on a PE of 11.6x. VAH is up 1.22% to 41.5c.

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.