The market is down 7. The SFE Futures were up 5 this morning.

US market down 36. The Dow was down 86 at worst and traded on the lightest volume of the year (5.1bn shares). Lower than expected Chinese inflation numbers leave room for the Chinese to cut rates and lower reserve requirements (no inflation threat) but also indicates that the weak growth profile persists which will be confirmed by industrial production and GDP numbers on Friday. We await trade numbers from China today. There was little in the way of economic data out on Wall St, US consumer credit came in well above expectations posting the biggest gain in 5 months suggesting that consumer confidence may be improving. The US 2nd Quarter earnings reporting season started overnight with Alcoa the first to report. Earnings came out after hours and slightly beat expectations. Alcoa share price down 0.23% in after hours trade. Other results weren’t so good. Metals were all up on the LME with Nickel up 1.51%, Zinc up 0.42% and Copper 0.33%. Oil was up $1.23to $85.68. Gold was up $8.10 to $1587. BHP and RIO ADRs were down 0.94% and 1.81%. BHP is set to open up 4c on our market today. The A$ is at 102.06.

Main Points

  • Chinese trade numbers — show a larger than expected trade surplus with less imports than expected. The market dropped 20 points in half an hour after the release.
  • Telstra (TLS) — An article in the AFR says the company has ruled out the possibility of a Nine Entertainment Co takeover. TLS is up 2.12% to 385.5c.
  • Leighton Holdings (LEI) sold their Theiss Waste Mangement business for $218m yesterday. The market is now asking which assets will be next. LEI is down 1.42% to 1627c.
  • Fortescue Metals (FMG) — The press says JP Morgan has upgraded FMG to their list of takeover candidates after Andrew Forrest’s recent $135m purchase. The Queensland Government has also joined their legal challenge of the MRRT. FMG is up 2.07% to 493c.
  • Primary Health Care (PRY) currently holds a 19.78% stake in Vision Eye Institute (VEI) just below the 20% compulsory takeover rule. VEI is up 1.39% to 36.5 & PRY is up 1.32% to 306c.
  • iiNet (IIN) — is up 10% since the start of June hitting a high of 334c. There are rumours that TPG Telecom is buying through Commsec which has recently traded $1.9m in shares. IIN is down 0.6% to 332c.
  • Hastings Diversified (HDF) — is waiting to see if Pipeline Partners will increase their 235c a share takeover offer as the July 19 deadline draws near. HDF is up 0.84% to 240c.
  • Gunns (GNS) has been slugged with a $42.5m tax bill of over a 2007 deal involving their wood chipping equipment where they sold and leased back the equipment. GNS shares remain in suspension.
  • The NAB Monthly Business Confidence index dropped 1 point to -3 points. Mining conditions remain the strongest. Ongoing global uncertainty and concerns about the MRRT and carbon tax has overshadowed recent interest rate cuts. NAB has kept their GDP forecasts unchanged at 3.1% for 2012.

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