The market is up 18. SFE Futures were up 29 this morning.

Dow Jones was up 116. The Dow was up 130 at best and down 3 at worst on signs that the Democrats and Republicans are moving closer to announcing a deal to resolve the fiscal cliff which includes a solution for the debt ceiling as well. Two birds with one stone. Obama has apparently agreed to compromise on the tax threshold issue in an effort to move the two parties closer. Republican John Boehner has kept the support of his Republican colleagues in talks with President Obama. The latest plan is to raise the threshold at which higher rates kick in to households earning $US400,000 a year and above, up from the $US250,000 level on which Obama had earlier insisted. Obama’s new proposal offers $US1.2 trillion in revenue hikes and the same in spending cuts designed to trim the deficit. US bond yields and Gold down. European markets up — UK FTSE 0.40%, German DAX 0.64%, France up 0.29%, Spain up 1.60%, Italy up 0.94%. The blue chip Euro STOXX 50 index was up 0.6% to a 17-month high. Metals mixed — Copper down 0.54%, Nickel up 1.11%, Aluminium down 3.26%, Lead up 0.79%. Spot iron ore unchanged at $132.20.

  • The WBC/Melbourne Institute leading index of economic activity fell to 2.9% in October down from 4.1% in September. Westpac chief economist Bill Evans said the data was disappointing compared to the previous reading.
  • Billabong International (BBG) — Profit downgrade and proposal update — The Company will meet with a consortium led by Paul Naude to discuss a 110c per share takeover bid. In a statement BBG confirmed Mr Naude’s $527m confidential, non-binding bid. The group said a condition of the bid stated that if the confidentiality of the proposal was lost, for any reason, the offer would be withdrawn with immediate effect. The takeover offer is at risk of being withdrawn after details of his proposal were reported by media before the company informed the market of the details. BBG also cut their FY guidance and expects earnings for the year to June 30 of $56 million-$63 million down from their previous guidance of $100 million-$110 million. BBG is down 12.24% to 86c.
  • Whitehaven Coal (WHC) — Chinese Shenhua Group has approached Whitehaven about buying some of their NSW assets and has been advised to return with a full takeover bid. Rumours are a bid would need to be near 450c a share to be considered. Shares closed at 321c yesterday well below their high of 562c in the past year because of a fall in the coal price and uncertainty surrounding Nathan Tinkler’s 19.4% stake. A 450c a share bid represents a nice 40% premium to yesterday’s closing price. At 450c a share Tinkler would make $885 million, enough to pay off his $700 million of debts with enough left over to make a very nice broker’s client. My number is 03 8888 0007. WHC is up 5.61% to 339c.
  • Sims Metal Management (SGM) – Downgraded their first-half earnings guidance by 20% amid weak market conditions. The company now expects earnings to be in the range of $88m-$96m down from $110m-$120m in the six months to Dec. 31. SGM is down 3.56% to 897c

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