The market is down 179. It was down 220 earlier. The SFE Futures were down 153 this morning. The Dow Futures are currently down 217.

The Dow Jones closed down 634 overnight and is back below 11,000 for the first time since November. The fall came in response to the S&P downgrade of US debt to AA+ from AAA. The ECB announced that it would buy Italian and Spanish bonds in order to help them avoid default. The oil price fell $5.57 to $81.31, and gold was up $61.40 to $1711.60. The A$ dollar is buying 99.59c down from 104.26c. Metal prices down.

In the news today…

  • China’s CPI rose 6.5% in the year to July 30, just above the forecast of 6.4%. The PPI was inline with forecasts at 7.1%.
  • National Australia Bank (NAB) has posted a trading update with cash earnings of $1.4bn that were in line with analysts’ estimates and up 27.3% from 3Q 2010.  But they warned of subdued credit growth and fragile consumer confidence. NAB down 93c to 1998c.
  • Coca-Cola Amatil (CCL) – first half profit down 28% to $153.6m. CCL will consolidate its three SPCA Ardmona manufacturing sites into two. CCL down 3.8% to 1012c.
  • The Environmental Protection Authority recommended environmental approval for Aquila Resources’ (AQA) mine and rail facilities for the West Pilbara Iron Ore Project in Western Australia. AQA down 11.6%.
  • Leighton Holdings (LEI) has signed a heads of agreement to sell the HWE Iron Ore business and assets that provide iron ore contract mining services for BHP Billiton (BHP) to BHP for about $705m. LEI down 4.9%, BHP down 157c to 3500c.
  • Bradken (BKN) reported annual net profit for the year to June 30 of $67.56m, down 4.1% although the company expects strong earnings growth in 2011/12. Revenue was up 14.4% and the MD said the company had experienced “strong, ongoing recovery post the global financial crisis”.  BKN down 9.8%.
  • Cochlear (COH) – FY profit up 16% to a record $180.1m. The company says there will be ongoing demand for its hearing implant products from developed and emerging markets. COH down 3.1%.
  • St. Barbara Ltd. (SBM) said they will hedge production from one of their three mining operations, as they shift away from the recent trend of gold miners capitalizing on volatility in the gold price. SBM up 1.4%.
  • Coal & Allied (CNA) was downgraded to Neutral from Buy by UBS following Mitsubishi and Rio Tinto’s (RIO) $122 a share bid for the 14% of the company they don’t already own. CNA down 3.4%, RIO down 6.1% to 6645c.
  • One broker (The Clown of Collins St) came in yesterday saying “capitulation over….now’s the time to buy…..expect a short term rally of 3-4%”. Dickhead. Typical of the “guess, guess and guess again” value add of some financial ‘professionals’. He’ll be down at Bunnings kitting up for his new career as a landscape gardener by Christmas along with any other brokers telling you that this is the time to buy. This is not an opportunity in the medium term, it is a falling knife – some brokers can’t help themselves but try and cover their pathetic and costly track record with continued buy calls and hollow gambling advice. There is no reason for a bull market to start.
  • For those of you sweating on what to do now…truth is you’ve missed the bulk of the short term correction. It’s hard to sell right now. Hopefully our stop loss comments of the last week and our realistic, rather than optimistic, comments in the last months have saved you from the worst of it. The popular conversation you will probably hear from your broker and the media this week and weekend is “What to buy” (typical). But I wouldn’t be buying for a short term bounce… Visit Marcus Today to read why.

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