The market is up 1. SFE Futures were up 15 this morning.
US markets up 15. The Dow was up 28 at best and down 26 at worst. A disappointing August nonfarm payroll number, which also included a downgrade to the July figure, added to expectations that a QE3 would be announced at the 12-13 September FOMC meeting (bad news is good news). Over the week the Dow Jones was up 1.6%, S&P 500 up 2.2% and the Nasdaq was up 2.3%. Gold up $34.90.
US non-farm payrolls came in below expectations of +125,000. The unemployment rate is now 8.1% down from 8.3% this was mainly due to the workforce participation rate falling from 63.7% to 63.5% (31 year low). China also released disappointing data showing industrial production up 8.9% (expectations +9.1%) in the year to August, the slowest pace in three years. CPI came in at 2.0% in line with expectations.
Worst Sector — Telecoms (-0.6%), Consumer Goods (-0.4%) and Utilities (-0.3%). Best Sector — Basic Materials (+2.6%) and Energy (+1.6%).
European markets up — UK FTSE up 0.30%, German DAX up 0.66%, France up 0.26%, Spain up 0.26%, Italy up 2.09% and Greece 2.14%.Metals up — Copper was up 3.45%, Nickel 2.75% Aluminium up 2.21% and Zinc up 3.13%. Spot iron ore up $2.00 to $89.00 – enough for the bulls to declare (prematurely) that the price has bottomed for good. A$ is at 103.73c.
- Home loans approved in July fell 1.0% to 44,804. Economists were expecting no change.
- Chinese trade balance figures due today.
- Iron ore price trend — The Chinese infrastructure initiative on Friday has potentially put a floor under the iron ore price for a moment — certainly the sector jumped on Friday and it followed through in the BHP and RIO prices on Friday night. Iron ore price up $2 on Friday to $89.00.
- Rio Tinto (RIO) — Has doubled their holding in Richards Bay Minerals (RBM) following the completion of a $1.9bn acquisition of BHP Billiton’s entire interests. RIO is up 3.97% to 5445c.
- Boral (BLD) – Has appointed Mike Kane as their new CEO. Mr Kane will take over at BLD from October 1, replacing interim chief executive Ross Batstone. BLD is down 0.58% to 343c.
- Origin Energy (ORG) — A joint venture led by Apache Corp has discovered natural gas off the coast of Kenya, increasing the chances that there may be commercial reserves. ORG is down 0.26% to 1173c.
- Qantas Airways (QAN) — CEO Alan Joyce says the Emirates alliance will increase competition in the Australian market and competitors such as Virgin will need to raise their game. There are some doubts the ACCC will allow the alliance. QAN is up 2.58% to 129.25c.
- Lend Lease (LLC) has begun investigations on their Abigroup business over discrepancies in profit reporting. LLC says the misreporting of profits and costs on two of Abigroup’s projects shouldn’t impact their financial position. LLC is down 4.56% to 805c.
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