The market is down 27 – that compares to the 8 point fall the SFE Futures predicted this morning.

The Dow closed up 9 – Up 89 at best. Down 73 at worst. Financials made up some recent loses but Energy and commodities fell the hardest on a sharp drop in the gold and oil price and a sharp rise in the US dollar after comments from Bernanke about inflation concerns which are expected to lead to a US interest rate rise before September 31st. Lehmans dropped further due to broker downgrades after yesterday’s announced losses and capital raising. JP Morgan up 2.08%, Citigroup up 3.37%. Some economists and experts say the credit crisis will extend into 2009. They say the $25bn put aside by Wall Street firms to cover future losses won’t cover the potential $170bn required. Prime mortgages to credit cards and the resultant packaged securities sold on and traded on Wall Street, could comprise the next wave of the credit crisis. The NASDAQ closed 0.4% down.

  • BHP and RIO both down in ADR form overnight, 2.66% and 4.63% respectively.
  • Metals mixed overnight – Nickel up a big 6%, Copper down 1.5%, Zinc down 2.6% and Aluminium up 0.1%. Zinifex down 24c to 880c.
  • Oil price down $3.06 to $131.38 after the Energy Department slashed its oil consumption projections. Woodside down 127c to 5993c.
  • Gold down $26.90 to $871.20. Gold stocks thumped. Sino Gold (SGX) down 15%. Newcrest down 2.8%. Lihir down 3.6%. Newcrest down 79c to 2843c.
  • US Bonds down with the 10 year yield up to 4.10%.

The US dollar has had it biggest two day gain since 2005. The excuse overnight are the comments from Bernanke that suggest the US Fed focus has gone from growth to inflation implying interest rates are more likely to go up from here than down. A bit premature to call the end of the rise in the A$ which is up over 11% this financial year and 8% this half year….something that will pain the currency affected stocks during the results season in August.

The WA State Government has released a Paper for public consultation entitled “Pilbara Railways (3rd Party Haulage) Regime“. “Junior miners would be required to pay for upfront costs of expanding BHP’s and Rio Tinto’s rail systems to transport the ore, and will also be charged a haulage fee”. Essentially good for junior iron ore players IOH, BCI, BRM and AGO although a lot of the junior iron ore players are struggling today. Unlikely to impact materially on BHP and RIO.

  • BHP CEO Marius Kloppers told Sky Business News that his company’s growth prospects are more advanced than that of takeover target Rio Tinto (RIO) and that he was confident regulators would give him the green light. BHP down 51c to 4276c and RIO down 322c to 13033c.According to Reuters, small Chinese steelmakers will accept a 95% increase in annual iron ore prices by Australian producers, but Chinese heavyweights like Baosteel are holding out for a more favourable price.
  • Oxiana’s (OXR) Seppon copper plant in Laos is back in full production mode after a small fire late last month. OXR down 7c to 280c.
  • AGL Energy (AGK) said it’s on track to meet EBITDA forecasts for this year of between $830m and $875m with an underlying net profit of $330m-$360m. AGK down 14c to 1336c.
  • Downer EDI (DOW) reiterated its earnings guidance for the year saying there is “no material change to current guidance”. DOW up 6c to 690c.
  • Alumina (AWC) said underlying earnings are expected to be cut by between $12m-$17m due to the gas shortages caused by a fire at a gas plant in WA. AWC down 13c to 525c.
  • Premier Investments (PMV) released their second supplementary bidder’s statement continuing to advise shareholders to accept their takeover offer for Just Group. PMV down 28c to 752c.
  • Karoon Gas (KAR) set to raise $49m from a share placement at 350c. KAR up 2c to 372c.
  • AMP made a bid late yesterday for MacarthurCook (MCK) valuing it at $31m. They are offering 135c cash, a 69% premium to the target’s price of 80c. MCK up 25% to 125c.
  • Leighton Holdings (LEI) has been appointed as an alliance team member to build the Ballina bypass project in NSW. LEI up 31c to 5079c.

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