Morning Market Report, Apr 18, 2008

The market is down 56, not even close to the 11 point gain the SFE Futures suggested this morning. It was down 13 at its best and down 51 at its worst.

Dow Jones flat, up 1.22. It was down 56 at its worst and up 37 at its best. Investors were tentative given the mixed bag of 1Q reports. Brokers and investment banks were up 3% and financials overall up 1.4%, outperforming the other sectors. Earnings results dominated the headlines, Google’s 1Q profits top expectations, allaying fears over conversion of its web servers to advertising viewers, Merrills announced $6.5bn in write downs and posts earnings 21c per share below consensus estimate and Pfizer posted a profit below expectations. In economics news, Philadelphia regional manufacturing activity fell to another 8 points from -17.4 to -24.9. Bad news for the economy. Economists expected it to be at -15, Unemployment claims for last week were not as bad as expected and the Conference Board’s leading economic indicators report for March was up 0.1% in line with expectations from a fall of 0.3% in February.

Both BHP and RIO down in ADR form overnight, 2.05% and 1.98% respectively. BHP taking a breather – down 48c to 4291c after a couple days of gains.
Metals all down overnight – Nickel down 1.9%, Zinc down 1.5% and Copper 1.3%. Aluminium down 0.3%. Zinifex down 13c to 1036c. It gives a talk today and will presumably talk up the merits of the Oxiana bid. Oxiana has its AGM today and will do the same. After a pretty poor run since the merger was announced both offer the opportunity for price enhancing rhetoric. OXR down 5c to 340c.
Oil price unchanged at $114.80 – A government report yesterday showed oil inventories had dropped higher-than-expected last week. Woodside down 2.6% to 5773c after releasing some shabby looking production numbers yesterday.
Gold down $5.40 to $942.90. Newcrest down 94c to 3350c.
US Bonds down with the 10 year yield up to 3.72%.

Rio Tinto held its AGM in London – CEO Tom Albanese said it expects to announce production growth of more than 8% a year until 2015, believing growth projects will lift output considerably. He also said RIO is receiving strong interest for assets that are up for sale and expects to received and reiterated shareholders should reject BHP’s 3.4-for-1 share takeover offer. Rio expects to post double digit GDP growth in 2008 on the back of strong demand from China. RIO down 2.3% to 14262c.

Brambles (BXB) getting smacked after Wal Mart said it will modify the way it sources pallets. Not exactly music to the ears of BXB shareholders. BXB down 13% to 874c.
Macquarie Airports (MAP) announced 1Q earnings at its Sydney airport were up 6.8% from last year. MAP down 2c to 308c.
Macquarie Infrastructure Group (MIG) said underlying earnings at its 30% owned toll road 407 ETR in Canada – its largest road by revenue – was up 14.8%. EBITDA was up to $92.5m Canadian to $C80.6m. MIG down 9c to 270c.
Lynas Corp (LYC) announced it has completed a 75m share placement at an issue price of 126c a share, raising around $94.5m. LYC up 4c to 140c.
ANZ Banking Group (ANZ) has added $150m to its 2013 bonds, bringing total issue size to $1.5bn. ANZ down 30c to 2042c.
Fox Resources (FXR) doing well after confirming a nickel discover close to Radio Hill mine in WA that has potential to hold significant tonnages of nickel and copper. FXR up 5.4% to 68c.
Challenger Financial Services Group (CGF) have released their half year investors report – it expects double-digit EPS growth and aims and to achieve 18% return on net assets. CGF up 1c to 207c.
Arrow Energy (AOE) announced it has been awarded two exploration licenses in India. AOE up 6c to 240c.