The market is up 24. The SFE Futures suggested an 18 point rise in the market this morning.

The Dow Jones closed down 16 overnight – It moved in a relatively narrow 97 point range and finished slightly lower in what was a dull session on Wall Street. The main issue was the oil price hitting record highs; it put on another 2% and hit a new intraday record over $80 after the Energy Department announced inventories fell by 7.01 million barrels, analysts had a 2.7 million barrel drop. The oil price is up 31% this year and has lifted the energy sector 7% in the last month. In other news, McDonald’s lifted their annual dividend by 50% to $1.50-a-share after activist investor William Ackland criticized the company for not increasing returns to shareholders, and Wal Mart, whose stock is down 7.5% this year, introduced their first new companywide slogan in 19 years – “Save Money. Live Better”. The NASDAQ had a quiet session and finished slightly lower, the S&P 500 was unchanged.

Resources doing well today … BHP up 39c to 3889c and RIO up 67c to 9889c. Metals mixed overnight, Copper and Aluminium both down 0.7%, Nickel up 0.4% and Zinc was unchanged. Zinifex up 20c to 1588c. Oil price up $1.69 to $79.85. Woodside up 66c to 4648c. Gold down 30c. Oxiana up 9c to 343c. Newcrest is in a trading halt for the rest of this week, it last traded at 2480c.

  • The AFR today highlights the corporate governance issue – CEO’s of listed companies are expecting an 8.7% pay rise this year, more than twice that of average workers.
  • Babcock & Brown (BNB) announced this morning they intend to list their first ever vehicle in the US. They expect to offer American Depositary Shares at around US$22 – 24 for their airline leasing unit, Babcock & Brown Air Ltd., indicating a market cap. of US$773m. BNB will keep around 13% of the company after the listing. B&B Air intends to use the proceeds to fund the acquisition of 47 aircrafts from companies managed by BNB.
  • The ACCC said the sale of Southern Cross Broadcasting (SBC) to Fairfax Media (FXJ) and Macquarie Media (MMG) raised some concerns about the supply of advertising opportunities and would seek further comment. FXJ up 10c to 443c and MMG down 2c to 431c. SBC’s didn’t like the announcement, down 46c to 1707c.
  • Another twist to the long-running Consolidated Minerals (CSM) takeover. Palmary have now lifted their offer to 450c a share valuing the company at $1.03bn, topping Pallinghurst’s 410c a share offer. Palmary’s new offer involves a lock up agreement and a 1% break fee. CSM received their first offer from Pallinghurst back on 23 February this year originally at 168c cash for each CSM share and 2 shares in what would have been a new ASX listed company for every 5 CSM shares held.
  • Merrill Lynch has initiated coverage on RAM Home Loans (RHG) with a BUY recommendation and 120c target price. They say there is a 70% chance that RAMS will continue as a standalone franchise and that its underlying asset, loan book, indicates a “salvage value” of 55c to 82c if bought by a bank. The stock is down 72% since listing last July.
  • Aussie dollar expected to strengthen supported by global risk appetite and stronger commodity and metal prices.
    CSR Ltd (CSR) have completed their placement of $150m. Plenty of research around. A lot of NEUTRAL recommendations at best.
  • The Reserve Bank of New Zealand left interest rates unchanged at 8.25%. “High enough to contain inflation”.
  • Companies going ex-dividend today include – AUI, CXP, DBS, DUI, EQT, GCL, LMW, SBC, SMX.

We have an article in the MARCUS TODAY newsletter today about the 136 million dollar man who has put all his money in one stock. Despite that he gets more reliable returns, over $4m in dividends pa and probably more sleep at night than any of us.

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