The market is down 43. The SFE Futures were down 43 this morning.

Dow Jones down 161 — down 184 at worst. US markets were all down as Europe deteriorates and as Pending home sales fell 5.5% in April, the lowest level since December. European markets were well down. Spain’s banking crisis is getting worse. Spanish 10 year bond yields are ripping up rather than creeping up – now at 6.656%. Spain was down another 2.6% (nine year low), UK FTSE down 1.7%, France down 2.24% and the German DAX was down 1.8%. A German 2 year bund (no typo) auction went off at a zero yield – Germany is the safe haven in Europe clearly and it is a worry that Europeans are looking for one and are prepared to give their money to the German government just to hold it and not lose it. Gold was up $13.40. Oil was down $3.37 to $87.39. BHP and RIO were both down 2.5% and 4.1% in London. BHP and RIO ADRS’s are down 3.84% and 4.86%. Metals were all down with copper down 2.57% and Nickel down 1.48%. Aussie dollar at $97.16 – a six month low. The euro continued to fall.

Main points:

  • 12 points of the market fall is thanks to NAB going ex dividend.
  • Gillard quote at the Minerals Council yesterday doing nothing for resources – maybe they should just regulate them like a utility – allow an 8-10% return and take the rest – put them out of their misery – it’s a worry for all resources shareholders:
  • “And here’s the rub, you don’t own the minerals, I don’t own the minerals. Governments only sell you the right to mine the resource – a resource we hold in trust for a sovereign people. They own it and they deserve their share.” 
  • David Jones (DJS) reported a 2.9% decline in 3rd Q sales as challenging retail markets continued to weaken consumer confidence. The result also due to increased online shopping.  Sales for the 3 months to April 28 slid to $399.8m from $411.7m. The 2.9% decline was slightly lower than a consensus forecast of 2.3%. In spite of this the company stuck to their guidance for a 35%-40% fall in profit. DJS is also on track to clear all excess inventory by the end of the financial year. Overall an ok result but surprisingly the stock is trading on very thin volumes. DJS is up 0.67% to 226.5c.
  • UGL has won a $190m contract to supply and maintain freight locomotives to Rio Tinto, Xstrata Coal, QR National and Pacific National Rail. UGL is unchanged on 1193c.
  • Goodman Group (GMG) is in discussions over a possible US expansion into industrial property markets.
  • Private new capital spending on buildings and equipment rose 6.1% to $40bn in 1st Q12 from the 4th Q11. The median market forecast was for a rise of 4.0%.
  • If you had a 2x ATR (average true range) weekly stop loss on all ASX 200 stocks then in the last month 106 have triggered them and 12 out of the top 20 stocks would have been sold – all the banks and resoruces basically. Unsold – SUN, TLS, WES, WOW, WDC, ORG, CSL, NWS.
  • Australian residential building approvals fell 8.74% to 10,330 units in April compared to 11,312 units in March. Economist had forecast a 0.5% rise in approvals in April.

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