The market is down 100 having bottomed down 121. Resources down 5% with big falls in coal prices overnight (biggest fall in Europe since 2005) and a collapse in US steel stocks (Steel sector down 13%) on fears that a global economic slowdown will impact steel demand. It has created a lot of sellers in the small coal and iron ore sectors this morning. Resources have been the safe haven in a terrible market. People now questioning their faith.

SFE Futures were down 97 this morning.

Dow down 167. Up 52 at best. Down 168 at worst – closed on its low. All ten sectors down. Dow Jones down 1.46% – down 14% in 2008 so far and down 21.46% from the top. S&P500 down 1.85% – at lowest level since July 2006. Nasdaq down 2.38%. Resources down 5.2% amidst concerns about slowing growth and dragging demand. BHP and RIO significantly down in ADR form overnight, 6.17% and 8.17% respectively. Steel and coal stocks thumped — Nucor down 14.25%, US Steel down 12.52%, US S&P Steel index down 13%. US $ down ahead of an expected interest rate rise from the ECB tonight. The US$ is down 14% against the Euro so far this year. Financials down 1.4% but outperformed on the news Deutsche Bank expects to report a quarterly profit. GM down 15% and at the lowest level in 54 years. Talk it could go bust. A broker cut estimates on Merrills and Citigroup. ADP jobs numbers were much weaker than expected raising concerns about tonight’s official jobs numbers. Oil rockets to $143.74 on lower than expected inventory numbers. Factory orders better than expected.

  • Both BHP and RIO significantly down in ADR form overnight, 6.17% and 8.17% respectively. BHP down 240c to 4049c. RIO down 801c 12431c.
  • Metals mixed overnight – Zinc down 3.4%, Nickel down 1.9% and Copper up 1.2%. Aluminium up 1.4%. Zinifex flat at 820c.
  • Oil price up $2.68 to $143.74 on the back of lower-than-expected weekly inventories and the threat of conflict with Iran. Woodside down 199c to 6365c.
  • Gold up $2 to $946.50. Newcrest down 130c to 2971c.
  • US Bonds up with the 10 year yield down to 3.95%.

AIG-Commonwealth Bank PSI index (Performance Services index — equivalent of the US ISM index) down 4.3 points to 45.4 in June from May — third consecutive month of contraction (under 50). Banks outperforming – Financials up 0.6% and Resources down 4.9%. Seeing rotation out of resources to financials for the first time in eight months. Coal stocks and iron ore stocks taking it on the nose.

  • Newcrest has closed out its hedge book for a higher cost than expected. They now become an unhedged gold play (they always moved with the gold price anyway — now their profits will as well).
  • Oxiana (OXR) have put out a run-of-the-mill update on the Prominent Hill project. It will make copper 50% of the OZ Minerals revenue. OXR defying the trend after a 32% drop last month. Down 6c to 228c. They have also signed an MOU in Indonesia.
  • David Jones (DJS) has reassured investors they’ll hit their guidance target of 8%-13% this half and between 5%-10% in FY2009. DJS are accelerating cost reduction programs and reducing inventories. DJS down 3c to 286c.
  • Babcock & Brown (BNB) continues to cut deals as their North American Infrastructure fund buys two natural gas distributors for US$910. BNB down 8c to 695c.
  • Ten Network (TEN) announced an on-market buyback of up to 10% of issued shares and is up 5%. TEN is down over 30% in a month. Ten up 7c to 143c.
  • Herald Resources (HER) unchanged after Indonesia’s PT Bumi Resources upped their takeover offer to 285c per share or $563.5m — beats rival offer — extends the bidding war beyond 6 months.
  • Straits Resources (SRL) down 6.5% after it announces a significant Porphyry Copper-Gold mineral resource at the 100% Goldminco owned Temora NSW project. SRL down 46c to 648c.

We have an article in the MARCUS TODAY newsletter today looking at TAKING LOSSES — see if you can get to the bottom of the list without taking them. We also have a lot more comment on the market and the two questions on everyone’s mind today “Do I buy?” and “Do I sell?”.

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