The market is up 68. The SFE Futures suggested a 28 point rise this morning. Bit of a quiet day on the news front.
WALL ST UP 46 – Wall St. moved in a 212 point range and closed up for the first time in four sessions on the back of bargain hunters stepping in and better-than-expected earnings results. The Dow was up over 100 at one stage before the Labor Department released the initial jobless numbers. Claims fell by 22,000 to 356,000 on the week, down from a 2 year high of 378,000 last week. Retailers had a strong session after both J.C. Penny (up 8%) and Gap (4.5%) announced 4Q profit guidance ahead of expectations. PepsiCo also put on 5%, it announced a 17% increase in sales to $12.3bn, higher than the $11.6bn Wall Street had expected, and Wal Mart said same-store sales increased by only 0.5% last month after heavy discounting failed to attract shoppers. JP Morgan Chase finished strongly – its CEO Jamie Dimon said banks profits will not be affected by downgrades of bond insurers and that a default by a bond insurer isn’t likely because guarantors have funds to pay claims. BNY ConvergEx Group say it might be a good time to buy as stocks are now priced at about 14 to 15x earnings, when historically they trade at 18 to 24x. The NASDAQ closed down 1.3%.
European markets had a bad night. The Bank of England cut rates by 25bp but the European Central Bank didn’t cut. BHP and RIO down 3.36% and 3.60% in the UK although they weren’t so bad in the US withy the ADR prices up 0.38% and 1.91%.
In the news today:
- NAB up on OK research about yesterday’s AGM. NAB up 61c to 3341c.
- Rams up as NAB buys $1bn of their mortgages. RHG up 4c to 27c.
- Biota up on good Relenza royalties. BTA up 9c to 119c.
- Wesfarmers roofing it on new Coles appointment from UK. WES up 142c to 3862c.
- AED down on creditor request for payment. AED down 16c to 156c.
- Coca-Cola to buils a brewery in NSW. CCL up 11c to 911c.
- ResMed results not good. RMD down 33c to 464c.
- Suncorp-Metway sells a business. SUN up 46c to 1539c.
- Macquarie Airports Traffic figures OK. MAP up 10c to 394c.
- Primary has 48% of SYB. PRY up 8c to 1060c.
- Allegiance waiting for Zinifex to say if they are extending their bid. ZFX up 12c to 937c.
A number of brokers are downgrading “wealth management” stocks this morning scared off perhaps by the disappointing update from funds manager IOOF this week. AMP, AXA, PPT downgraded amongst others.
We address the subject of Behavioural Finance in the newsletter today which is about your only guide to a market driven by fear not fundamentals. Behavioural Finance attempts to get a handle on “the herd” and although it appears to explain why it doesn’t appear to have any reliable predictive quality. Looks like we are on our own.
We also have the results Diary for next week in the newsletter today and the yields and PE’s of all the ASX 200 stocks listed by Highest Yields and by cheapest PE’s.
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