The market is down 17. The SFE Futures were down 9 this morning.

US market down 47.  The Dow was down 92 at worst and up 18 at best. Good ADP jobs numbers were momentarily helped by the People’s Bank of China cutting the one-year yuan lending rate by 0.31% to 6.0% and the one-year deposit rate by 0.25% to 3.0%. But the markets were overshadowed by dour economic outlook comments from ECB head Mario Draghi which accompanied a 25bp cut in the ECB rate from 1.0% to 0.75% and a drop in the deposit rate to 0%. On the back of that the euro fell and the A$ went over 103c. Draghi said the rate cut would have a limited impact on the economy with downside risks now materialising. Spanish and Italian bond yields rose to 6.70% and 5.951%. There is an estimated €800bn sitting in the overnight deposit at the ECB, the rate cut is designed to encourage the banks to withdraw it and lend it to other banks. Metals were all down on the LME despite the Chinese stimulus with Zinc down 2.35%, Nickel down 1.39% and Copper down 0.32%. Gold was down 17$ to $1604.80. Oil was down 96c to $86.70. BHP and RIO ADRs were down 0.62% and 1.62%. BHP is set to open down 25c today on our market. The A$ is at 102.89c.

Main points:

  • Fairfax Media (FXJ) – Gina Rinehart has sold 3.7% of her Fairfax stake to bring her holding down to 15%. Although it looks like she may have given up on the task of becoming a director, on the contrary the move is designed to circumvent one of the hurdles put up by Roger Corbett and makes it more likely. FXJ is down 0.85% to 58c.
  • Woolworths (WOW) is said to be using hard negotiation tactics to cut prices from suppliers to help fund a war with rival Coles. Sources say WOW has given some suppliers two weeks to find cost savings of between 5%-10% or have their products removed. WOW is down 0.59% to 2674c.
  • Telstra (TLS) has increased their mobile phone service charges by putting up the prices on call rates and data allowances. Good news for shareholders but not so good for Telstra customers. TLS is down 0.4% to 371.5c.
  • Qantas Airways (QAN) — Rumours continue. CEO Alan Joyce talked down speculation that the airline could be the subject of a takeover by the company’s former managers. QAN is down 0.45% to 110.5c.
  • Commonwealth Bank (CBA) — has gone Y generation. The bank has developed a system to allow customers to access banking through Facebook and plans to launch an App by the end of the year. CBA is down 0.46% to 5356c.
  • The AIG/HIA Performance of Construction Index remained unchanged at 34.8 in June. This indicates a contraction despite RBA rate cuts. AIG said “The residential and commercial construction sub-sectors continue to be a drag on overall business activity with lack of demand and access to finance both holding these important sub-sectors back.”
  • Ten Network (TEN) and oOh!media have agreed on a sale price for Eye Corp after almost six weeks of discussions. Sources say TEN is looking for $130m-$150m. TEN is up 1.06% to 47.5c.

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