Presented by Michael Hevern
MDS Financial
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Stocks finish flat after recovering from early sell-off. Euro recovers from 4 year lows, giving support to European markets.
The SPI Futures is below key level of 4600 the ASX is set to open lower as the SPI closed up 29 points (or 0.6%) at 4524, and overseas weakness still unsettling.
US Markets
Recovery after a shaky start; Energy Stocks Weigh
SP500: up 0.1% at 1,137
DOW up 0.1% at 10,626
Broadly Lower – Investors Nervous
NASDAQ: up 0.3% at 2,354
Dollar Index: Strong 18 month highs as Euro Weakens A$ up 86.87c
FTSE: down 0.1% at 5,262
DAX down % – Euro Currency Struggles (up 6.0% for week)
Oil: down 1.5% at ($70.51) (down 19% in past 2 weeks). Recovery falters and the focus is still on the oil spill in Gulf of Mexico
Gold: UP 0.2% at ($1,226)
Commodities Weigh;
SPI: below key 4600 ASX
SPI up 29 (0.6%) at 4524
ASX News
The SPI Futures is below key level of 4600 the ASX is set to open lower as the SPI closed up 29 points (or 0.6%) at 4524, and overseas weakness still unsettling.
LEI – rebuffs merger proposal for controlling shareholder Hoctief AG two months ago.They reported 9 month profit almost doubling to 31 Mar’10, NPAT rose to $400million (vs $220m in pcp). They forecast a FY profit of $600m with work on hand of $37.5m. Shares dropped 2.8% on the news.
RIO – Loses Chinese appeal re bribery and spy case. Australian Stern Hu chose not to appeal. All now face prison sentences of at least seven years with Hu receiving 10 years and Wang 14 years. The prisoners may be released early on parole.
AXA – AXA Asia Pacific is expected to renew its support for the NAB $14bn takeover bid. NAB is in discussions with ACCC re their concerns. AMP is still in the picture.
BHP – Mr Jac Nasser breaks his 7 weeks of silence in a letter and email drop, saying the proposed tax ”fundamentally, abruptly and unfairly changes the rules of the game”. The letter went on to say: ”Historically, the stability and competitiveness of Australia’s tax system has been central to providing resources companies and investors with the confidence to invest billions of dollars in long-life projects exposed to the risk of significant commodity price movements”. BHP wants the new tax to apply only to new projects.
MYR – Australia’s #1 department store chain reports 3Q Flat Sales. Share lost 1.3%
Market volatility will continue to rise near term, as world investors come to terms with the ramifications of the ECB $1 trillion rescue package.
We the suggest trading strategy is to get small, reduce you exposure to equities. Be prepared to open/hold short positions.
MARKET SUMMARY
ASX – to open higher
US & UK/Europe – subdued leads
U.S. ADRs – Broadly Flat!!!…
BHP down 1.2% & RIO down 3.2%; AWC down 1.2% ANZ down 1.7% & NAB down 0.7% NEM down 1.1%, JHX down 0.2%, NWS up 0.4%
Commodities Stock Index down 0.9%
Gold Stocks Index down 1.9%
Oil Stocks Index down 0.4%
