The market has started the week slightly lower – down 11. The SFE Futures predicted a 2 point rise in the market this morning.

The Dow Jones closed up 5 points – It moved in a 67 point range and finished the session slightly higher after the Labor Department announced 94,000 jobs were created in November, above the 80,000 new jobs some had been predicting and suggesting a recession is less likely and the need for sharp rate cuts is reduced. The unemployment rate remained steady at 4.7%. In other economic news, the University of Michigan’s preliminary reading of consumer confidence showed consumers are worried about the high oil price, the index fell to 74.5 from 76.1 last month, economists had predicted a reading of 76. It was a good week for all three major indexes, the Dow Jones put on 1. 9%, the S&P 500 closed up 1.59% and the NASDAQ finished 1.7% higher.

Resources outperforming today. BHP up 24c to 4374c and RIO up 24c to 14572c. Metals all up on Friday, Nickel up a big 5.1%, Copper up 2.7% and Zinc 1.4%. Aluminium up 1.3%. Zinifex down 1c to 1574c. Oil price down $2.02 to $88.23. Woodside down 64c to 4771c. Gold down $6.90. Newcrest up 45c to 3337c. We have a busy week ahead – The FOMC Meeting is on Tuesday – we will wake up to the decision on Wednesday. After recent comments from Bernanke that “renewed turbulence in the financial markets over the past month has affected the economic outlook” it is pretty clear that further rate cuts are on the way, the question is how many and how soon.

It has been a busy start to the week…

  • Resources are the talk of the town today. Friday was a strong day for metal prices and there has been a break out of takeover rumours globally – it seems the BHP bid for RIO has kicked off a gold rush and everyone is trying to get set in the sector for the next ten years before all the opportunities get snapped up by someone else. Talk in the Times in London that “unidentified sources” say CVRD has hired investment bankers to look at an A$88bn (£38bn) bid for Xstrata and will be approaching the company. Similar story in a Financial Times blog.
  • SP AusNet (SPN) announced this morning it has abandoned plans to buy the $8.3bn worth of ex-Alinta assets due to the credit crunch. Chairman Ng Kee Choe said if they went ahead with the acquisition, current conditions in the debt market would have increased the cost considerably and would have affected the company’s ability to meet forecasts. SPN is up 7% to 128c on the news.
  • Looks like the bid for Nufarm has fallen over …see announcement below. Reuters quote a source as saying “You just have to put it all in the context of the global credit markets right now. It really has taken a nosedive for the worse in the last three weeks”. The stock came up from $14 before to bid to 1625c. The price has fallen 10% to $15 initially.
  • BT Investment Management lists today (code BTT). This is the funds management arm of Westpac which they appear to have been pretty much forced to float in order to deliver equity in the business, and a market for it, to the funds management team who presumably looked at the Platinum Asset Management float (which created a billionaire fund manager and a few millionaires) and decided they wanted the same and if Westpac didn’t arrange it they would walk.
  • Allco Finance Group have their AGM on Wednesday – quite interested in AFG after two brokers upgraded to a BUY last week after recent falls. They have a 1269c target price. Now 750c up from a low of 646c last week but down 5c today to 745c.
  • Kingsgate Consolidated – KCN was suspended last week having dropped 19% last week on fears that the Thai government were going to suspend 52 exploration and production leases on their main Chatree project. It is back trading again today and is up 16% to 453c. They say the media articles (Bangkok Post) were misleading and incorrect and that the normal processing of the mining leases is unaffected.
  • Pacific Brands (PBG) is selling its New Zealand foam, flooring and bedding businesses to Vita New Zealand. No amount was mentioned but figures will be released when the deal is completed, expected to be in early 2008. PBG up 9c to 335c.
  • Macquarie Infrastructure Group (MIG) say they have no idea why its share price put on 22% last week. It hit an 8 month high on Friday, but MIG responded to a price query from the ASX saying it was not aware of any undisclosed information that could explain the increase or turnover. MIG down 12c to 339c. The talk is that Macquarie Group are thinking of taking the company private and that speculation caused short covering. It was up 16% at one point on Friday and closed only marginally up.
  • Lion Nathan goes 21c ex dividend today.
  • 2.5% of the population now manage a self managed super fund. SMSFs in Australia have $1.5 trillion of assets. The market capitalisation of the ASX 200 is $1.303bn.

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