The market is down 43. Our futures were down 25 this morning. The Dow Jones finished down 139 on below-average volume. The Dow was down 153 at worst as commodities and materials stocks (resources) lost ground on the back of yesterday’s Chinese Manufacturing PMI number (50.6 actual, 50.9 prior, 51.0 consensus), weak ADP employment numbers and the FOMC meeting that hedged their bets on the recovery theme and rate rises. The Federal Reserve said they will continue the open-ended program of buying $85 billion per month of bond and mortgage-backed securities.

Best sectors — consumer discretionary, consumer staples. Worst sectors — energy, materials, utilities. European markets mixed — UK FTSE up 0.33%, Spain was down 0.38%, Italy down 0.96%. There is growing speculation that the ECB will cut interest rates 25bps to 0.50% tonight when they meet.

Spot iron ore was unchanged at $133.00. Gold was down $15.80 to $1456.30. Oil down $2.47 to $90.99.

  • Resources and commodities the weak point overnight with oil down 2.7% on the back of crude stockpiles hitting their highest level since 1982 according to the EIA in the US. Gold down $15. Copper and nickel both down 3.7%. The Aussie dollar down to 102.80. All that comes on the back of a number of factors suggesting that US recovery is fading in the second quarter. Alcoa also announced the possible curtailment of its smelting capacity in another sign of sluggish global growth. The mining services sector particularly weak today.
  • AGL Energy (AGK) — Has issued a profit downgrade cutting their expectations for FY profit citing stronger competition in sales of energy to customers. They now expect profit to be at the lower end of guidance which is in the range of $590 million to $640 million. AGK is down 3.35% to 1515.5c.
  • Graincorp (GNC) — ADM has confirmed plans to acquire GrainCorp after they completed due diligence and will now proceed with the sweetened $3.5 billion deal first announced last week. GNC is up 0.31% to 1285c.
  • Westpac and Macquarie report interim and final results tomorrow. Both stocks have been running into the results.
  • Flight Centre (FLT) — Has issued a profit upgrade and raised their profit forecast to $325 million — $340m from previous guidance of $305 million –$315. FLT is up 1.57% to 3877c.
  • SMS Management & Technology (SMX) — Has released a weak trading update. The company says significant projects expected to commence in second half have slipped and will not make an expected contribution to the 2H result. SMX is down 2.69% to 470c.
  • Bank Bubble — Making a fewer headlines today is a research report from UBS out yesterday entitled Welcome to the great bank bubble of 2013. It says that banks are low-growth companies heavily exposed to a housing market downturn and unemployment although it hedges the title by saying “As with all asset bubbles they can go higher and for longer than many expect”, although “as Chuck Prince (the former CEO of Citigroup) famously said ‘As long as the music is playing, you’ve got to get up and dance’. All we can say is buyer beware.”