The market is down 55. The SFE Futures suggested 36 point fall in the market this morning.

The Dow Jones closed unchanged overnight unable to extend the momentum from the 145 point gain the day before – It moved in a 129 point range and closed unchanged in what was a volatile session overnight. The Dow initially rallied and then pulled back towards the close as uncertainty over credit markets continued. Bank of America Corp. announced they would invest $2bn into Countrywide Financial Corp (CFC) to help them better manage problems with defaulting subprime loans. CFC was up 20% at one point but closed up 1%, the investment was seen as more symbolic than a genuine attempt to make money and it didn’t help to hear the CFC CEO say that there was “still a tremendous liquidity problem”. And that the housing slump could lead to recession. The Federal Reserve injected another $17.25bn into the banking system overnight to help liquidity taking the total to $41.25bn since the start of the week. In company related news, Home Depot fell 2% after investment banks showed reluctance to finance the sale of their wholesale supply division. Limited Brands, the owner of Victoria’s Secret, finished 6% higher after it announced a better-than-expected earnings result. The S&P 500 index finished in the red for the first time in six sessions and the NASDAQ closed down 0.4%.

A bit of steam coming out of resources today after yesterday’s big gains. BHP down 67c to 3703c and RIO down 184c to 8916c. Metals mostly up, Copper and Zinc both up 1.4%, Aluminium up 0.7% and Nickel down 1.3%. Zinifex down 21c to 1694c. Oil price up 56c to $69.86. Worth pointing out that the oil price is being affected more by global stock, bond and currency swings rather than fundamentals such as supply and demand. Woodside up 40c to 4200c. Gold down 30c. Newcrest down 27c to 2532c.

Main results:

  • Billabong International (BBG) getting sold off on results, down 70c or 4.3% to 1562c after announcing a 15% increase in FY07 NPAT to $167.2m, up from $145.9m last year and slightly below analysts expectations of $169.4m. Revenue was up to $1.23bn, up from $1.03bn and management maintained their forecasts for EPS growth of 15% in the current year. BBG shares down 4% this month but up 15% in the past year.
  • Insurance Australia Group (IAG) have suffered a 27% fall in FY07 NPAT to $552m compared to $759m last year – not good. Analysts expected $619m. Management expects 10-12% revenue growth in the current year and says overseas expansion is on track. (IAG bought Hastings Insurance Services, Britain’s fifth-largest car insurance broker last year for $350m) IAG shares down 19c to 553c but up 7% in the past year.
  • Consolidated Minerals (CSM) doing well today, up 4% to 374c after announcing a solid FY07 NPAT of $31m, up from $6.5m last year. Revenue up 27% to $271.4m, up from $213.8m and announced a final dividend of 4.5c on top of their 1.75c interim dividend. Nickel business looks to be the key growth area; they have budgeted $23m in exploration this year. CSM great performer in the short term and long term, up 12% this week and 88% in the past 12 months.

In other news:

  • The Yen Carry Trade survives a potential savaging from the bank of Japan meeting on interest rates. They left everything unchanged. Interest rates unchanged at 0.5% (“appropriate to leave rates unchanged”), assessment of the economy unchanged at “moderate expansion”. The Yen appears to have peaked for now…relieving fears of Armageddon and helping the Aussie dollar recover.
  • Credit Suisse have upped their recommendation on Babcock & Brown (BNB) to OUTPERFORM from NETURAL and their target price to 3200c from 2900c on the back of their impressive first half result. They now forecast a FY07 NPAT of $603m. BNB down 85c or 3.5% to 2365c.
  • Sonic Healthcare (SHL) down 35c to 1460, they announced this morning they have completed a $400m capital raising via a share placement and have placed the shares at 1420c. Not the biggest carrot in the world, 2.7% discount to current share price but still OK.

We have an article in the Marcus Today newsletter today about Australian population growth. In Australia there is one birth every 1 minute and 56 seconds, one death every 3 minutes and 59 seconds, a net gain of one international migrant every 3 minutes and 15 seconds. That nets out to an overall population gain of one person every 1 minutes and 45 seconds. That’s a gain of 823 people a day, 300,342 people a year for a population growth rate of 1.43% per annum. That adds about 15% to the Australian customer base every 10 years.

Better than the UK, the US and China. Not as good as India. There are 1.321bn people in China and because of the one child policy the population growth is just 0.6%. India on the other hand has almost the same population with population growth of 1.6%. In other words….India will overtake China and their growth will be more sustained.

Also in the newsletter today we have a list of the cheapest stocks in the ASX 200, the highest gross yielding stocks in the ASX 200 and the stocks that have the furthest to rise to regain their year highs.

You have my permission to take the rest of the week off. Have a good weekend.

THE MORNING MARKET REPORT is provided by the MARCUS TODAY daily stockmarket newsletter. You can subscribe for a free five-day trial here.