The market is up 130 points outperforming the 83 point rise predicted by the SFE Futures this morning. Resources up 7.1% with a 7.9% and 10% rise in BHP and RIO — RIO outperforming on the back of a conformation that they won’t be pursuing a much speculated rights issue. Telstra down 6.5% early as the Commonwealth exclude TLS from the National Broadband Network request-for-proposal on the basis TLS didn’t include a plan for how to involve small and medium enterprise in the building of the network. Macquarie Group up 5.5% as brokers upgrade their wholly owned subsidiary Macquarie Office Trust (MOF) to BUY after the announcement of their capital initiatives including raising up to $508m and cutting their 2Q distribution. MOF up 34.2% early on. Property sector up Banks all up between 2% and 3% — ANZ outperforming — up 3.1%.

The Dow was up 64. Up 117 at best. Down 218 at worst. 9 out of 10 sectors up — broad-based gains. The Senate knocked back the $14bn auto manufacturer bailout bill. Caused early selling. Metals down on Friday. Oil price down $1.50 to $46.27. Gold down $6.10 to $820.50. Bonds up with the 10 year yield down to 2.57%. A$ at 67.15c, up 2.34%. Financials up 2.1% — JP Morgan up 3.3%. Technology sector up 2.4% — outperformed — Apple and Amazon up 3.4% and 6.2%. Retailers up 1.1% – relatively solid performance despite the 1.8% fall in November retail sales.

It a relatively quiet week ahead with the main event being the FOMC meeting on Tuesday. We have CPI tomorrow and the RBA Minutes on Tuesday. The ANZ and the NAB hold there AGM’s on Thursday, as well as the Ten Network. Incitec Pivot hold theirs on Friday.

Making the news today… quiet start to the week.

  • United Group (UGL) has signed a property services contract that will generate $190m in revenue for the company.
  • Macquarie Office Trust (MOF) has announced a $800m capital management initiative that will ensure its survival. Brokers up to BUY.
  • APA Group (APA) will use the $647m it raised from the sale of assets to pay down debt.
  • Aquarius Platinum (AQP) is suspending operations at its Everest platinum mine in South Africa for six months due to subsidence that is causing mine instability.
  • Australia Wealth Management (AUW) and IOOF Holdings (IFL) have completed due diligence on their merger.
  • Babcock & Brown Wind Partners (BBW) has set a sale date for its Spanish assets.
  • Centro Retail Group (CER) has requested a trading halt.

Broker Stuff today…

  • Credit Suisse has initiated coverage on Harvey Norman (HVN) with an Outperform recommendation and 353c target price saying although there is plenty of earnings risk through calendar 2009, it appears that it’s already factored into the share price.
  • Macquarie Equities upped their recommendation on Leighton Holdings (LEI) to Outperform from Neutral and maintain their 2940c target price saying the share price is factoring in a 40% reduction in work in hand from current $35bn levels.
  • Citi cut their target price on Crown (CWN) to 880c from 980c after reducing the value of CWN’s stake in US casino investments to zero in its sum-of-the-parts valuation due to high leverage and downturn in industry revenue. They maintain their Buy recommendation.

Other stuff today…

  • The FOMC starts a two day meeting tonight with an interest rate decision tomorrow night. Expectations for a 50bp cut with some forecasts for 75bps.
  • RIO’s chief economist, in an interview with the Dow Jones newswires, says he has cut his Chinese GDP forecast from 8-9% for next year to 7-8%.
  • The Dow Futures suggest a 46 point rise on Wall Street tonight.

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