The market is up 66. The SFE Futures were up 37 this morning.
The Dow Jones closed up 134 on Friday. Dow down 221 at worst and up 177 at best. The Dow was up 4.3% for the week — its first weekly gain in over a month. The US market fell early on the back of the much anticipated Jackson Hole speech from Fed Chairman Ben Bernanke. Bernanke said the economic downturn was the worst since the 1930s and the recovery “has been much less robust than we had hoped”. A weaker than expected Q2 GDP revision didn’t help. Metals were up on the LME, oil put on 7c to $85.37 and Gold put on $34.10 to $1797.30. The Aussie rose to 105.68c from 104.34c.
Today’s news and results…
- QR National (QRN) reported an annual net profit of $349.5m, compared with a loss of $36.8m a year earlier. Underlying earnings were up 17% to $813m, which was slightly below consensus estimates of $813m. QRN down 4c to 315c.
- Macquarie Atlas Roads (MQA) reported a $106.4m loss for the 6 months to June 30, up from a $226.1m loss the year before, and in line with analysts’ expectations. They expect revenue and earnings to rise next year. MQA up 2c to 149c.
- Goodman Fielder (GFF) has reported a $166.7m full year loss, down from a $161.1m profit in 2010. The result included $300m in impairment charges. Excluding impairment charges profit was $133.3m. They said they will not provide 2012 guidance. GFF up 0.5c to 77c.
- New Hope Corp (NHC) has offered $2 a share to take full control of Northern Energy (NEC), valuing the company at $261.3m. The cash offer comes 6 months after New Hope built up an 80.83% stake in Northern Energy via a separate takeover campaign. NHC up 3c to 515c.
- Woolworths (WOW) CEO Michael Luscombe said weak consumer confidence will continue to grip retailers this year. He expects a sharp decline in annual profit growth in fiscal 2012 even as food prices start to decline. WOW up 1.5% to 2561c.
- The Australian Financial Review say that ANZ Banking Group (ANZ) is looking to buy Japan’s Tokyo Star Bank or Aozora Bank. ANZ has said it is targeting Asia for growth and expects that by 2013 they will get up to 30% of their profit from the region. ANZ up 2.5% to 2035c.
- Select Harvests (SHV) results were in line with expectations and at the low end of guidance. They said FY12 performance is “expected to be better than FY11” based on standard growing and harvesting conditions. SHV last traded at 158.5c.
- Eighteen companies have gone ex-dividend today. Notables include: Amcor (AMC) – 18c, ASX Ltd (ASX) – 93c, Bendigo & Adelaide Bank (BEN) – 30c, Fleetwood (FWD) – 41c, MacArthur Coal (MCC) – 16c, Origin Energy (ORG) – 25c, Suncorp Group (SUN) – 20c and WorleyParsons (WOR) – 50c.
Bernanke’s Jackson Hole (a ski resort) speech effectively said: “Not my fault … it’s up to the politicians”. Post the speech Wall St moved in a 398 point range.
As predicted by one Professor in the newsletter last week the general tone from Bernanke and the IMF speech was that the central banks had done about all they could do with the monetary policy settings and that it was really up to the politicians to introduce stronger action to support growth and cut deficits: “…most economic policies that support robust growth in the long run are outside the province of the central bank”.
The implication being that the political side of the equation had so far come up short and that the ‘fumbling’ about of the US political system over the debt ceiling had hurt the economy.
Bernanke held out hope for the US economy to return to its long term growth path but only if the politicians took the necessary policy steps. He said: “Without significant policy changes the finances of the federal government will inevitably spiral out of control risking severe economic and financial damage”. Overall it seems Bernanke has put it on the White House and Congress to fix the national debt and stimulate the economy. The focus now goes to an Obama Speech on Labor Day (Monday September 5th) which is expected to announce a new jobs stimulus.
Basically, despite the market rally, there is nothing in the Bernanke speech to inspire confidence in the US economy or instill hope that the US or European debt crisis is any closer to being solved. He appears to have used the speech to say “Don’t look at me … it’s not my fault … we’ve done everything we can”. Now you have to have faith in Obama and Congress to introduce measures to stimulate the US economy and combat the debt issues. Take a free 5 day trial at Marcus Today for more detail.
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