The market is up 23. The SFE Futures were up 29 this morning.
The Dow Jones closed up 45 overnight. Dow up 46 at best and down 15 at worst. Financials were best, up 0.9% on results from Bank of America and Morgan Stanley. Both Spain and France held successful bond auctions continuing the recent trend post the ECB’s 489bn 1% loan facility being launched. Good jobs numbers and results in the US. US jobless claims hit their lowest in four years. We have an FOMC meeting next week. Hard to see what they can say that will improve things — too early for QE3. Metals were up on the LME, the oil price fell 3c to $100.56 and Gold dropped $2.40 to $1657.50. The Aussie dollar increased to 104.25c from 104.18c and just hit its highest level against the UK pound in 27 years.
Main points…quiet day on the news front.
- After hours yesterday Nexus (NXS) signed an initial deal to form a new joint venture with Royal Dutch Shell and Japan’s Osaka Gas to develop the Crux natural gas field offshore Australia. Shell will own 80% of the venture with Nexus holding 17%; Osaka Gas with the remaining 3%. Nexus have a 12-month option to a sell a 2% stake in the JV to Shell for $75 million. That values Nexus’ 17% share at $637 million…while their market cap is $384 million and $201m worth of debt. NXS up 3c to 27c.
- Equatorial Resources (EQX) – They have a 19% stake in African Iron (AKI) that has been bid for and the talk is that they too might be bid for by Anglo America. EQX unchanged at 232c.
- BHP’s full year underlying earnings forecasts four months ago were hovering around US$25.6bn for this year. They are now down to $21.5bn which is below last year’s $21.7bn prompting comments that he profit cycle has peaked. BHP up 19c to 3753c.
- News Corp’s (NWS) British newspaper division, News International, has agreed to settle a group of lawsuits related to its phone hacking scandal. NWS up 25c to 1920c.
- ASIC have alerted the market of a fraud which involves the hacking of dormant on-line retail broking accounts and trading in stocks. ASIC will make an announcement about it today.
- Thomson Reuters say world equity markets average PE is 12x versus the long term average of 17x since 1973.
- Ben Bernanke’s salary — US$199,770. The highest paid hedge fund manager last year earned four times more than all the Federal Reserve’s 17,000 employees put together. The FOMC made $79bn last year … basically by creating money (zero cost) and lending it out. Not bad business if you can get it.
- We have the Australia Day Holiday on Thursday — the ASX close the market for the day.
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