The market is up another 125 or 2.2% today after a strong session on Wall Street overnight. We are now 550 points or 10.6% up from the low on Tuesday and but still down 16.2% from the November high.

The SFE Futures suggested a 76 point rise in the market this morning. The market is peacefully quiet apart from the growing confidence that this week’s selling was overdone. We have a rare opportunity to buy value for the long term, which is still true even if we did miss the absolute bottom on Tuesday.

Wall Street closed up 108 – It moved in a 158 point range and finished higher for the second consecutive session on the back of better-than-expected earnings results and jobless claims unexpectedly falling. Bloomberg tell us 61% of S&P 500 companies that have announced results have beaten analysts’ expectations.

The FOMC Meeting is next week – we have already had our 75bp interest cut and another one is forecast. Interest rate futures are suggesting a 100% chance of another 50bp cut.

It has been revealed that a SOC GEN trader in Paris has caused a $8B+ AUD loss for his employer…he was basically long the euro markets. The bank discovered this at the end of last week (last Saturday) and closed out the positions early this week, seemingly a major contributing factor to the European market falls on Monday that triggered “Black Tuesday” in Australia. It would be interesting to know how much the market falls in Europe on Monday (which at the time were unexplained and were not replicated in the US) were caused by the close out and how much that contributed to the Fed’s decision to cut rates in an emergency move on Tuesday.

Quiet on the news front heading into the long weekend. Australia Day on Monday – Stockmarket closed.

It is a busy week for the markets next week. The FOMC Meeting is on – bond markets tell us there is a 100% chance of a 50bp rise, US 4th Q GDP (all important considering the recession fears) and other economic numbers in the US such as new home sales, durable goods, consumer confidence, personal income, unemployment and the ISM manufacturing index. In Australia, we have quarterly production reports from Lihir, Centennial, Macarthur Coal, quarterly Sales numbers from Woolworths and the interim results season gets underway with Alesco on Tuesday and Alumina on Thursday.

  • MFS Ltd (MFS) announced this morning that two companies it is associated with have sold 23m securities of Babcock & Brown Communities Group (BBC). BBC said the stake was subject to voluntary escrow and had been sold on the market. MFS still in a trading halt, BBC up 8.6% to 64c.
  • Qantas (QAN) down 8c to 465c despite announcing November passenger numbers were up 4.5% on the year and that they filled 82.5% of the seats.
  • Fortescue Metals (FMG) announced its iron ore project is on track and will load its first ore in mid-May. It has told investors the overall project in 82% complete and that the forecast cost of the project has increased by $17m to $2.7bn. FMG up 49c to 613c.
  • Jeff Pollock has been appointed as Australian Infrastructure Fund’s (AIX) new CEO effective April 21. AIX down 1c to 271c.
  • Valad Property (VPG) up 5.4% to 119c, after saying it has raised GBP150 million for its U.K. property fund.
  • UBS Warburg cut their target price on Billabong (BBG) to 1880c from 1635c and maintain their BUY recommendation saying US sales in 2H08 are likely to fall to 5% growth from 15%. “The share price already incorporates lower expectations for earnings from the Americas”. BBG down 9c to 1242c.
  • ABN AMRO upped their recommendation on Zinifex (ZFX) to BUY from HOLD after the recent share price fall. “We believe there is significant upside for ZFX through both M&A activities, developing exploration projects and potentially higher-than-forecast zinc prices,” Despite their BUY recommendation, they have cut their target price to 1153c from 1466c. ZFX up 57c to 1045c.
  • UBS Warburg upped their recommendation on Santos (STO.AU) to BUY from NEUTRAL saying the stock looks cheap. “Although we believe Santos continues to lack near-term production growth, we also think Santos looks inexpensive and therefore we consider it to be a relatively attractive ‘value’ stock in comparison to its large cap peers,” They upped their target price to 1556c from 1505c. Despite taking a hit recently, the stock is still up 26% in the past 12 months.
  • ABN AMRO is expecting Woolworths (WOW) to announce a 10.1% increase in 2008 sales to $12.5bn next week. They maintain their BUY recommendation and 3750c target price saying, “We expect strong trading results from all retail operations, particularly Australian Food & Liquor”. WOW up 26c to 3001c.
  • Companies going ex-dividend today include Djerriwah (DJW) and Lion Selection (LST).

We list the stocks that have fallen the most in the Marcus Today newsletter today along with their PEs and Yields. We also have an article summing up all the reasons we think you should now be buying the market and give you a few recommendations. Sign on here for a FREE TRIAL.

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