The market is up 9 points. Dow Jones up 62 — despite the US Government shutdown, stocks rebounded from yesterday’s fall. The market is speculating that any economic impact will be minimal and could be offset by Federal Reserve stimulus.

The Dow was up 79 at best and down 19 at worst.

Treasuries and commodities fell as the dollar weakened against most major currencies.

President Obama has told members of the military he will work to get Congress to re-open the government as soon as possible. He accused Republicans of holding the government hostage. He has blamed the government shutdown on an “ideological crusade” by Republicans to derail his healthcare program.

The US market shrugged off the shutdown. US stock movers — Merck & Co up 2.6%, Walgreen Co. up 4%, Under Armour Inc up 3.5% and Ford Motor Co up 2%.

The ISM Index unexpectedly rose to 56.2 the strongest since April 2011. Median forecast was 55.

The Aussie dollar went up to 93.93c as the US dollar slipped on concerns about when the government will reopen.

Spain’s 10-year bond yield fell 13 basis points to 4.17% and Portugal’s bond yield fell 9 basis points to 6.59%.

In Japan — Confidence in large manufacturers rose to the highest level since the early stages of the GFC in 2007. The Q Tankan index rose to 12 in September from 4 in June.

Metal prices down.

Gold down 3.08% to $1286.10.

STORIES

  •  For the first time in 17 years the US government has been partially shut down after Republicans and Democrats failed to reach an agreement on short term funding measures. All non essential services will be cancelled; 800,000 workers will receive a temporary leave of absence (known as a furlough); tourist attractions, museums and national parks will close. The stalemate occurred with Democrat led Senate and Republican led House not being able to agree on a healthcare bill known as “Obamacare”. Republicans will only approve the spending bill in exchange for concessions on the healthcare laws.
  • According to economists the effect of a two week shutdown may cost fourth quarter GDP growth roughly 0.3%. For every week it will cost the economy 0.15% in GDP. A closure of more than two months would likely result in recession. The partial shutdown would cost the US at least $US300 million a day in lost economic revenue.
  • James Packer is behind an investment company called Ratpac-Dune Entertainment. The company has landed a $450 million financing deal with Warner Brothers for production of 75 movies over four years. The deal marks a new direction for the billionaire, who is looking to expand his business in the US and Chinese markets.
  • The ASX is thinking about moving into one of the new skyscrapers fronting Sydney Harbour at Barangaroo.
  • Australians drank and toasted more than 5.4 million bottles of champagne in 2012, making it the seventh-biggest market in the world for French champagne. Sales up 11.2%.
  • Woodside Petroleum (WPL) — Is facing uncertainty over their part in the Leviathan gas project off the coast of Israel. Sources say the project is exploring regional export pipeline options that would see gas sent to Greece and Egypt plants. WPL had landed a $2.4 billion deal to take a 30% stake and to send LNG overseas.
  • ANZ chairman to speak at event in Sydney.
  • CBA boss to speak at event in Melbourne.
  • APA Group (APA) — Is facing shareholder pressure to increase their $1.3 billion takeover bid for Envestra (ENV).
  • TEN Network (TEN) — Morgan Stanley was behind a trade of 26 million shares worth about 1% of the company. They were traded at 28c.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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