The market is up 26 after opening up 45. SFE Futures were up 52 this morning.
US market up 245. The Dow was up 247 at best. S&P 500 up 2% to a four year high and the Nasdaq up 2.2% to the highest level since November 2000. Volatility Index (VIX) down 12%. Bank of America up 5.03%, Citigroup and JP Morgan both up around 4.5%, Morgan Stanley and Goldman Sachs up 3.64% and 3.27%.The European Central Bank has agreed to launch a new bond buying program called Outright Monetary Transactions (OMTs).
European markets up – UK FTSE up 2.11%, German DAX up 2.91%, France up 3.06%, Spain up 4.91%, Italy up 4.31% and Greece up 0.58%. The Stoxx Europe 600 benchmark was up 2.4% with Financials (+3.7%), Basic Materials (+3.5%), Industrials (+2.6%) and Energy (+2.6%). Deutsche Bank +7.1% and Barclays +6.9%. Good US numbers – The US ADP survey indicates that 201,000 private sector jobs were created in August, well above forecasts of around 140,000.
New claims for unemployment insurance fell from 377,000 to 365,000 in the latest week. And the ISM services index rose from 52.6 to 53.7 in August, above forecasts for a result near 52.5. Metals mixed – not really responding much to the Draghi news — Copper was down 0.49%, Nickel down 0.25%, Aluminium up 0.23% and Zinc up 1.06%. Iron ore up 40c to $87. BHP and RIO up 3.63% and 4.71% in the UK.
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- Australia’s trade deficit widened in July, the balance of goods and services was a deficit of $556m in July compared with a deficit of $227m in June. Economists were expecting a deficit of $300m.
- Consolidated Media (CMJ) — News Corp (NWS) has lowered their 350c takeover offer for CMJ by a few cents to 345c. CMJ is down 0.3% to 343c and NWS is up 1.66% to 2391c.
- Commonwealth Bank (CBA) will cut interest rates by up to 0.4% on new one, three, four and five-year fixed-rate home loans their lowest level in 3 years. CBA is down 0.24% to 5459c.
- Billabong International (BBG) — Bain Capital has matched a $695m takeover offer by TPG which could start a bidding war between the two companies. BBG is up 2.93% to 140c.
- Fortescue Metals Group (FMG) — The Company says they may need to resort to an equity raising or more asset sales to boost the balance sheet. A raising will dilute Andrew Forrest’s 32% holding. FMG’s company secretary resigned yesterday. FMG is up 3.8% to 308c.
- Rio Tinto (RIO) – Has warned that they may need to write down the value of their aluminium division further despite already unveiling write downs of US$8.9bn this year. RIO is up 3.17% to 5175c.
- Coca-Cola Amatil (CCL) has completed their $58m takeover of Fiji Bitter. CCL holds 89.6% of Pacific Beverages. Under the terms of the sale of CCL’s previous beer business to SABMiller, CCL cannot sell, distribute or manufacture beer in Australia until the end of 2013, but can in other markets. CCL is down 0.22% to 1378c.
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