The market is down 40. SFE Futures were down 55 this morning.
US markets down 55. The Dow was up 2 at best and down 114 at worst. S&P 500 down 0.12% and the Nasdaq up 0.26%. Volumes were light again with disappointing economic data released early in the day. The US ISM manufacturing index fell from 49.8 to 49.6 in August — the lowest number in three years. US construction spending was also weak, down 0.9% in July below consensus for +0.4%. The weaker than expected numbers strengthen expectations that the Fed will further mention QE3 initiatives at the upcoming September 12-13 FOMC meeting although the less optimistic expectation is that they will wait until the fiscal cliff negotiation period (likely to be moved from post election to Q1 2013) before making a move although they may do something smaller before that.
European markets mixed — UK FTSE down 1.50%, German Dax down 1.17%, France down 1.58%, Spain up 0.73% Italy down 0.29% and Greece up 1.46%. Moody’s lowered the outlook on the European Union’s Aaa long-term bond rating to negative from stable on budgetary concerns in Germany, France, the UK and the Netherlands. ECB president Mario Draghi mounted his strongest case yet for sovereign bond intervention in a closed door meeting with European law makers (European bond yields down and Euro up) although it looks like he lacks the support of the Bundesbank. The ECB Council meeting on Thursday is the market focus – we are expecting a bond purchase program to be announced although there are some doubts it will happen ahead of the September 12 German Constitutional Court decision on the EFSF. There is a possibility they will not ratify it in which case the ECB cannot really decide to buy bonds yet — they will need a vehicle beyond the ESM.
Metals mixed — Copper was down 0.57%, Nickel down 1.68%, Aluminium up 0.94% and Zinc up 0.20%.
- Australia’s GDP grew by 0.6% in the three months to June slightly below expectations. This took GDP growth for the year to June to 3.7%. Economists were expecting GDP to rise 0.8% rise in the June Q. The 1st Q was revised up to 1.4% compared with an originally reported 1.3%.
- The AIG/CBA Performance of Services Index fell 4.1 points to 42.4 in August. This means the country’s services sector contracted for the 7th straight month in August due to a high Aussie dollar hurting the sector and cautious customers. Sales and new orders declined in August.
- Rio Tinto (RIO) has completed the sale of the North American portion of their Alcan Cable business to General Cable Corp for $151m. RIO is down 2.6% to 4905c.
- BHP Billiton (BHP) plans to invest $6.5bn in their petroleum business to help boost oil production by 8%. BHP is down 2.47% to 3078c.
- Fortescue Metals Group (FMG) has sold the power station at their Solomon mine in the Pilbara WA for US$300m to a subsidiary of TransAlta Corp. UBS downgraded FMG to a Neutral recommendation this morning and have cut the target price 380c. FMG is down 9.5% to 308c.
For a five day FREE TRIAL of the MARCUS TODAY newsletter Click Here. You will receive our renowned and popular Daily email about the stockmarket with all the stuff you need to know ahead of the trading day including:
- Overnight developments, news, comments, rumours, broker recommendations and ideas from Marcus and his Team.
- Our Portfolio recommendations which is actively managed on behalf of subscribers … no “set & forget”. Everything you need to effortlessly
- managed your own long term investment portfolio.
- Daily Technical Trading ideas and data, including daily scans of the ASX 300 for stocks changing trend.
- Stock Database — all the numbers with comments on the top 300 stocks and more.
- Educational section — Marcus’s Educational and Entertaining articles.
Subscribe to MARCUS TODAY. We are sure you will enjoy and profit from what we offer … we have one of the highest re subscription rates in the financial newsletter industry.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.