The market is up 68 on the back of an 89 point rise on Wall St and a 53 point rise in the Futures this morning. Our market is following the US lead with financials up 1.7% and resources up 2.2%. Macquarie Group is holding up today (up 1.7%) after yesterday’s 9.6% fall as UBS cut their target price to $48 from $60 and warned about “impairment” charges against associated investments. QAN down 6.5% as it goes ex dividend 17c and falls 24c, IAG is ex 9c and OZL 5c. Ex dividend tomorrow - AGK, COH, DOW and SUN. BHP goes ex dividend on Monday along with Woodside and Woolworths.

 

The Dow Jones had a good session – up 89. Up 141 at best. Down 31 at worst. The main driver was durable goods up much more than expected boosting confidence about the economy. Oil and energy up strongly. Resources up. Financials outperformed on positive news about Fannie Mae and Freddie Mac. 9 out of 10 sectors up – volumes even lighter than yesterday – once again, the lowest level for the year as the US runs into a long weekend for the Labor Day holiday on Monday. Financials up 1.7% - Fannie Mae and Freddie Mac up 15% and 20% after Standard and Poor’s reaffirmed their debt ratings and Bank of America and American Express both up over 2% as the Commerce Department report increased expectations that the economy was recovering. The NASDAQ closed up 0.87%.

• The SFE Futures suggested a 53 point gain in the market.
• Both BHP and RIO up in ADR form overnight, 1.79% and 1.60%.
• Metals mostly up overnight – Nickel up 4.78%, Zinc up 3.34% and Copper 0.86%. Aluminium down 0.15%.
• Oil price up $1.86 to $118.17 – third straight day of gains – on concerns that tropical Storm Gustav could enter the Gulf of Mexico and disrupt oil and natural gas production.
• Gold up $5.90 to $830.10
• Bonds up with the 10 year yield down to 3.77% from 3.78%

Another busy day on the announcement front, not long to go before life returns back to normal and the reporting season comes to a close.

 

• AMP – AMP Ltd – Report a net profit (excluding accounting mismatches) of $278m, down 50%; analysts’ were expecting a 47% fall of $296m. Declared an unchanged dividend of 22c – market expected a dividend of 22.5c with forecasts ranging from 21c to 24c. Reaffirmed its current dividend payout policy, which is helping the share price. Up 4.5%.
• ALL – Aristocrat Leisure – IN LINE – Announce a 1H net profit of $71.4m, down 43% and in line with its recently downgraded guidance of around $70m. Credit Suisse expected $72.8m, GSJB Were $70.1m. Up 4.3%.
• ORG – Origin Energy – IN LINE - Announces a FY net profit of $516.7m and an underlying profit of $443m. Analysts’ had expected $441.6m. Will pay a final dividend of 13c. Reiterates 10-15% underlying EPS growth target. Up 0.2%.
• FLX – Felix Resources – GOOD - Said profit quadrupled to $188.26m from $46.96m. GSJB Were expected $178.7m. The result may end up being irrelevant after it announced last month that it had received takeover proposals by several parties. Up 3.7%.
• TTS - Tattersall’s Group – Announce an 11% fall in FY08 net profit to $257.6m, slightly below analysts’ expectations of $259.6m. Announce a special dividend of 10.5c, says businesses are offering good prospects into FY09. Key now is future growth opportunities after the government put the kybosh on their gaming duopoly. Down 0.8%.
• AUB – Austbrokers Holdings – SLIGHTLY AHEAD OF EXPECTATIONS – NPAT up 17% to $15.7m, slightly higher than the $15.3m GSJB Were expected and $15.3m analysts’ expected on average. Up 2.5%.
• SBM - St Barbara – BELOW EXPECTATIONS – Announce a $17.3m loss. Underlying loss weaker than what GSJB Were had expected. No change to production guidance of 295-315koz for FY09. Down 2.4%.
• PNA - Pan Australia – OK - Announce a 1H net loss of US$389,000. Result better than expected. No interim dividend. Up 2.8%.
• QGC – Queensland Gas – Underlying profit comes in at $30.6m. FY net profit of $244.6m. No final dividend. Up 0.47%.
• FKP- FKP Property Group – FY net profit down 25% to $145.3m. Operating profit (excluding property revaluations and other non-cash items) up 11% to $150.2m. Declared a final dividend of 15.7c, down from 16.5c last year. Up 6.75.
• MCC – Macarthur Coal – BELOW GUIDANCE – Announce a FY net profit of $72.7m, up 9.3%, below company’s guidance of between $80m-$90m and GSJB Were’s expectations of $83.5m. Down 7.5%.
• IGO - Independence Group– Announce a net profit of $51.5m and declared a final dividend of 5c. Up 3.3%.

 

Others news…

 

• Sedgman (SDM) announces its metal division has been awarded a 5 year operations contract at Xstrata’s Handlebar Hill mine in Mt Isa. Take the value of Sedgman’s order book to over $700m. Up 4.2%.
• Sigma Pharmaceuticals (SIP) announced it has no definitive plans to break up the company. Down 5.85.
• Babcock & Brown Capital (BCM) has provided a review of management arrangement and a share buy-back update. It has begun talks on management internalization and deferred off-market buyback. Down 6.25%.
• We are waiting for ABC Learning (ABS) to restate its results for at least the past 2 years and announce a bigger-than-expected loss from the partial sale of its US business. Still in a trading halt.
• Macquarie Group (MQG) doing OK – up 1.0% - after falling 9.6% yesterday after UBS Warburg downgraded the stock to Neutral. Citigroup says the balance sheet worries are overdone.
• Brokers maintain their BUY and OUTPERFORM recommendations on Woodside Petroleum (WPL) – after its profit result yesterday. Up 2.5%.

The market is down 20. That comes on the back of a 27 point rise on Wall St and a 6 point rise in Futures this morning. Pretty quiet day today. Hard to find a feature other than the fact RIO hasn’t done much on the back of what looked like great results (see below). Resources flat and financials down a touch. We are awaiting Woodside’s results.

 

Pretty quiet night on Wall Street – Dow closed up 27 - Up 50 at best. Down 46 at worst. Financials up a touch on an FDIC report saying 98% of companies were well capitalized. Homebuilders down on poor housing data, oil up and energy and resources up. Lehmans speculated to be planning to set up a company funded by third party investors to take on some of its mortgage assets to dispel the fears around its debt and one analysts said Fannie Mae and Freddie Mac had enough capital to last the year – the duo up 8.3% and 20.67%. Energy stocks up 1.8% - up for the first time in 3-days on higher oil prices and Anadarko Petroleum announcing a confident buy-back of $5bn in shares. In economic news, July new home sales were up 2.4%, economists had expected 525,000, and August consumer confidence was up 9.6%, beating analysts’ expectations. The NASDAQ closed down 0.15%.

 

Wall St has a long weekend this weekend for the Labor Day holiday.

• The SFE Futures suggested a 6 point gain in the market.
• Both BHP and RIO up in ADR form overnight, 1.93% and 0.66%. BHP goes ex-dividend 46.9c on Monday.
• Metals all down – Nickel down 4.06%, Zinc down 2.37% and Copper 1.29%. Aluminium down 0.88%.
• Oil price up $1.46 to $116.31 as Hurricane Gustav threatened the oil infrastructure in the Gulf of Mexico.
• Gold up $2.50 to $824.20
• Bonds up with the 10 year yield down to 3.78% from 3.79%

Rio Tinto announced their 1H result late yesterday – They were written up on the website yesterday. The price performance in the US was less than exciting…up 0.66% in the US in ADR form and down 0.5% in the UK. Made US$5.474m against forecasts of $5.133m. Up 55%. EBITDA up 73%. Cash flow up 54%. Capex up 91%. Jury still out on the success of the Alcan acquisition (Aluminium price have been falling since the acquisition) but they say “Rio Tinto Alcan integration is making good progress and remains on track to deliver $1.1 billion of after tax synergies from the end of 2009”. Dividend up 31%. They talked about a positive outlook, strength in commodity demand, low inventory levels and constrained supply. They continue to tell us the BHP offer is too low. RIO down 0.25% today.

 

Results out today…

 

• WPL – Woodside– Results just out. NPAT up 67% to $1.016bn – at first sight its ahead of analyst forecasts of $955m. Expect stronger production in H2. Will meet production targets. Revenue up 45%. Of course they are reporting for six months in which the oil price went up from $60.85 to $139.96 so the results should be good. Since the end of the Financial year the oil price has fallen 17%. WPL up 1.15%.
• WDC – Westfield Group – IN LINE - Net profit down 55% to $1.29bn mainly due to property revaluations - Analysts’ on average expected between $983.8m-$1.004bn. Operating income up 14.7% in constant currency terms to $928m, brokers predicted operating profit of $940m on average. WDC down 20% so far this year, outperforming the REIT sector by 12%. WDC down 1.7%.
• TCL – Transurban – BELOW EXPECTATIONS - Underlying earnings up 19%. Posts a FY net loss of$142.8m. EBITDA up 19% to $489.6m, up from $419.9m last year – analysts’ expected EBITDA of $543m ranging from $492.2m to $573.2. Revenue up 30% to $1.02bn. TCL down 0.7%.
• TPI – Transpacific Industries – UNDER - Report a FY net profit of $175.3m, up 70% after a distribution to step up preference security holders. Analysts’ on average expected $179.5m. GSJB Were expected $174.8m. Declare a final dividend of 10.1c. TPI down 3.3%.
• MMG - Macquarie Media Group– FY net profit up to $273.8m from $37.8m on the back of acquisitions and asset sales. Declared a final distribution of 22.5c, down from 24.5c last year. MMG up 0.5%.
• CEU – Connect East – Announce a FY net loss of $13.6m. Intends to declare a distribution for the period from 1 April to 30 September of 5.25c. Says the EastLink average daily trips in the first month came in at 135,555. While marginally ahead of the 133,722 trips during the first week, it was still well below the company’s forecasts of around 186,000 daily trips during the first month of operations. CEU down 4.6%.
• AIX - Australia Infrastructure Fund – FY net profit up 23% to $206.5m. Final distribution of 8.5c. Expects a satisfactory performance in 2009. AIX down 3.6%.
• MCW - Macquarie Countrywide Trust– Net profit down 79.7% to $100.4m from $493.3m. FY total income down 76% to $150.7m. Declare a final distribution of 7.2c, down from 7.8c. MCW unchanged.
• Gloucester Coal (GCL) – IN LINE – FY net profit up 30% to $23.4m and expects further profit growth this year. Big increase in contract coking coal prices in the 2H helped lift profits. Declared a final dividend of 16c. GCL down 1.3%.
• AUW - Australian Wealth Management – said its net profit was up 13% to $65.2m and said it was well placed for further acquisitions. AUW down 6.9%.

In other news…

• Babcock and Brown Infrastructure looking for investment partners to buy stakes in three of its core assets. BBI down 10.75%.
• Babcock & Brown Communities (BBC) has requested a Trading Halt as it finalizes its response to the previously announced strategic review. Its board expects various agreements to be conducted with Babcock & Brown (BNB). 
• Record Realty (RRT) has provided an update on record Realty Property Transaction loans. Down 2.5%.
• According to Australian Broadcasting Corp.’s 7.30 TV program last night, we can expect some bad news from ABC Learning (ABS) – which remains suspended for a third day ahead of its FY result. The show detailed questionable accounting practices.
• Lots of broker stuff on Woolworths this morning – Merrill Lynch say BUY with a 3500c target price, Citi HOLD, Credit Suisse cut their recommendation to NEUTRAL from Outperform and Macquarie Equities upped their recommendation to Outperform. WOW up 1.42%.
• The response from Brokers on Foster’s Group post results is also mixed – Macquarie expect it to Underperform, Credit Suisse says it will Outperform and JP Morgan have labeled it as Neutral. Fosters up 3.1%.

Just when resources bears had convinced themselves that the China induced resources boom was over, and that the ending of the Olympics would symbolically reflect this, the Chinese have swept over the horizon to let everyone know that they are still here.

You may recall that back in February, Aluminum Corp. of China paid USD$14 billion for a 9% stake in Rio Tinto [ASX:RIO]. Although the shares were bought through Rio’s London listed shares and it was below the 15% threshold set for foreign ownership, Chinalco still went through the process of applying to the Foreign Investment Review Board for approval.

The Treasurer has now given the approval which means Chinalco can buy up to a 15% stake in Rio before it will need to go back to the FIRB.

It would seem likely that Chinalco will pursue taking a shareholding to that level, as there is minimal regulation on the UK side until its shareholding reaches 30% which would trigger a forced takeover bid for the whole of Rio. It’s questionable whether the Chinese have any interest in pursuing the matter that far, as it is more likely they are keen to be actively involved in the takeover discussions between BHP Billiton [ASX:BHP] and Rio, to perhaps gain some business concessions in return for supporting the takeover.

 takes a technical look at the Rio share price below

The stock (ASX:RIO) is still backed by a long-term bullish trend started in early 2007. It has posted low prices during this month of August but found this long-term support and has been bouncing back for 6 days now.

Despite a false break generated by the plunging equity markets one year ago when the subprime crisis blew up, the support line of the bullish trend remains valid. It means that over the long-term, the lows are posted higher. Therefore the slope typically illustrates an increasing price development.

From May 19, which is the historical high price, to August 13, RIO fell by 30%. The fact that the long-term support has been tested and validated twice recently argues for the end of this 30% decrease. The bearish trend is therefore completed. It is likely to open the way to a new bullish trend.

The first bullish indicator is that the price action succeeded to breakout above its resistance line. This resistance line was built by the high prices posted during the 3-months decline (points C, D, E and F on the chart). Each time the price action failed to go higher as there was not enough momentum, not enough conviction from investors to jump further into the stock.

The perspective has changed now as this barrier has been cleared last week. This resistance line was also strengthened by the 40-day moving average which was plot just above and was also acting as a resistance. Last Friday RIO closed at $122.17, well above its 40-day moving average: it’s another bullish signal. The stock has therefore already rebounded by almost 11% since the low of August. There is more to come.

The technical indicators show that a further move on the upside is probable. The MACD has triggered a bullish signal as it has crossed above its signal line. So did the 21-day technical momentum indicator as it jumped above the 100 level. It means that some momentum is building and that more and more money is currently flying into the stock. Both increasing volume and price are creating this bullish momentum.

In this scenario, investors should pay attention to the retracement levels of the recent 3-months decline. Short-term traders may take profit around those levels. The Fibonacci ratios show that the 38.2% level corresponds to $128 and that the 50% level corresponds to $134. These are the first objectives for the current price action.

On the downside, a pull back towards the long-term support line might occur, but only a breakdown below this support level would be a new strong bearish signal.

Midday Market Roundup 13/08/08
August 13 2008 - Australasian Investment Review – (AIR)

 

The market is down 110 – a fair bit worse than the 33 point fall predicted by the futures this morning. Resources down 2.2% despite BHP being up in the US. Financials flogged following the 5.2% fall in the US financials index overnight.

 

Dow down 139. Down all session – down 180 at worst. Resources up. Gold down heavily again. Financials worst performing sector by far - down 5.2% - Morgan Stanley buys back $4.5bn in auction-rate-securities, UBS posted 4^th-straight Qrly loss, Wachovia reported bigger-than-expected 2Q loss, JP Morgan announced a loss of $1.5bn, and Goldmans earnings estimates were cut by Oppenheimer. The Tradedeficit narrowed more-than-expected, the Budget deficit blew out to $102.8bn (triple last year’s number), retail sales growth slowed and consumer confidence remained at all-time lows. Sub-prime losses topped $500bn for the first time.

• Both BHP and RIO up in ADR form overnight, 0.69% and 0.92% respectively. BHP down 85c to 3636c. RIO down 347c to 11050c.
• Metals mostly down overnight – Zinc down 4.4%, Copper down 3.28% and Aluminium down 2.2%. Nickel up 0.75%. Oz Minerals down 7c to 166c.
• Oil price down $1.34 to $113.10 – hit a 14 month low down 23% from its record but still up 58% from last year. Woodside down 47c to 5147c.
• Gold down $13.50 to $810.80 – it was the eighth straight fall, the longest streak since 2001. Somehow Newcrest has managed to go up 61c to 2410c.
• US Bonds up with the 10 year yield down to 3.91% from 4%.

Main stories

 

CBA RESULTS OK BUT NOT GREAT- down 1.8% - results described as “solid” and broadly in-line with no nasty surprises - posted full year net profit up 7% to $4.79bn. Cautious outlook for FY09. All-important cash profit up 5% to $4.733bn on strong business lending and robust fund management business - was slightly above the consensus of $4.729bn. Operating income up 10% with some impressive statistics around new deposits and gains in market share. Final dividend at $1.53 compared to the expected $1.55. Higher-than-expected loan impairment charges jumping to $930m from $434m last year – bit above broker’s forecasts, but are low compared to peers and doesn’t seemed to have upset anyone.

 

TESLTRA RESULTS A BIT FLAT - down 3.1%– net profit slightly below expectations posting $3.69bn compared to consensus of $3.78bn. EBIT up 7.7% against company guidance of 6-8%. Dividend remains 14c as expected. Guidance bit below expectations with FY09 revenue growth forecast at 3-4% and EBIT growth of 6-7% compared to analyst’s 8.5% forecast rise in EBIT.

 

Other

 

IRONORESECTOR DOWN - FMG down 4.5%. Iron ore stocks being punished – PMM down 1.2%, MGX down 5.9% and MMX down 11.7%.

GOLDS SURPRISINGLY HIGHER- Major gold stocks up despite the gold price fall – NCM and LGL up 4.3% and 3.8%.

Australian consumer sentiment bounces in August up 9.1% from July – index at seasonally adjusted 86.2 from 79.0 – reflects lower fuel prices, talk of interest rate cuts and delivery of tax cuts. Good sign for consumer stocks.

RBA clashing with the view of Australia’s major bank CEOs about dropping interest rates despite rising funding costs – RBA says the banks have no case to delay cuts if rates fall – another sign for an imminent September cut. One broker predicting 5 cuts between now and the end of 2009.

Computershare (CPU) down 8.41% on results - Full year net profit was up 21% to $282m from $233.8m a year ago - below the $324.9m expected. Dividend 11c up from 9c a year ago. Earnigns guidance for 2009 was +10%, ahead of some expectations. CPU also to buy ABC Learning’s UK childcare voucher business for GBP90m.

Goodman Fielder (GFF) down 2% on a disappointing trading update including a write down of $170m on its dairy products division. EBIT declined from $70m in FY06 to $50.5m in FY07. Guidance on ‘normalised’ net profit for the year remains the same if you ignore the write-down. Dividend unchanged at 13.5c.

Equinox Minerals (EQN) down 3.62% on results (a loss) – the 1H loss was less than the circa $18.2m expected due to lower exploration and admin costs expensed. Has sufficient funds to complete the Lumwana project.

CSL Ltd (CSL) in a trading halt pending the release of an announcement about a $1.5bn institutional share placement to raise cash for a $3.5bn acquisition of Talecris Biotherapeutics. .

HastingsDiversified (HDF) down 2.64% as Epic Energy enters into a gas transportation agreement with Adelaide Brighton forecast to earn $42m in revenues over 10 years.

 

Another weekend and another announcement from Rio Tinto as it continues to blitz the markets with announcements about what it is and isn’t doing.

This time it revealed it was considering listing its North American coal assets on the New York Stock Exchange as Cloud Peak Energy Inc.

Rio said it had filed plans with the US Securities and Exchange Commission for an initial public offering worth up to $US1 billion ($A1.1 billion).

However, Rio Tinto indicated that this was only a preliminary move and that it might not move towards full listing, or pursue a different form of divestment.

A final decision would be made “once these options have been more fully explored,” it said in the latest statement.

Rio Tinto said in November it was exploring the possible sale of some or all of its US coal assets to help pay debt used to purchase Canada’s Alcan.

“We are in active discussions with a number of prospective buyers who have expressed strong interest in those coal assets,” chief financial officer Guy Elliott said in a statement.

The SEC filing did not reveal the number of shares the company planned to sell or their expected price.

Rio said that Cloud Peak Energy comprised most of the North American coal assets of Rio Tinto Energy America, and is the second largest producer of coal in the U.S. and in the Powder River Basin, operating three of the five largest coal mines in the region.

The Powder River Basin is a major thermal coal producing region in the US. There are around 35 major mining operations spreading through parts of Montana in the West of the country.

Cloud Peak’s Powder River Basin mines in Wyoming and Montana are huge: they supply 11.5% of the US domestic market for coal, generating 6% of America’s electricity.

Cloud Peak would exclude Rio’s Colowyo coal mine in Colorado and the Sweetwater uranium assets, which Rio has already said it would sell Sweetwater.

The lead underwriter for the offering is Credit Suisse Securities (USA) LLC.

BHP Billiton shares lost four cents to $37.15 in Australia on Friday, while takeover target Rio Tinto shares added $1.00 to $116.00.

 

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Westpac shares gained more than 1% Friday after it revealed it had escaped the worst of the credit crunch and was looking for a 6%-8% rise in earnings for the full year.

It’s now the country’s second largest bank by market capitalisation after the Commonwealth, which reports its full 2008 financial year results this Wednesday.

CBA shares eased on Friday ahead of the result and investors will continue to be uncertain until they see the actual figures from the bank. Expect a solid profit rise, even after a rise in bad debts. 

The CBA is a big lender to the Centro Properties group which is now in break up mode to try and restructure to repay debts.

Westpac said in a statement on Friday that full-year cash profit, which excludes income from derivatives trading, will increase up to 8% in the year to September 30, on revenue growth of up to 9%.

That’s in stark contrast to the lower profits expected from the ANZ and the National after both announced big write-downs.

Westpac said it will maintain a conservative risk profile and is on target to complete its planned takeover of St. George Bank which updates the market tomorrow.

Westpac CEO, Gail Kelly said the bank was continuing to do well despite the slowing growth now being reported across the economy.

“Managing risk remains a priority for us and we are maintaining our strong lending and credit risk disciplines,” she said in a statement.

“We are not distracted by problems in our credit portfolio, enabling to us concentrate on our strategic agenda.”

 

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And Telecom New Zealand, the country’s biggest Telco has forecast a second year of declining profits after full year earnings dropped 16% to $NZ713 million in the year to June 30.

Profit could drop by up to 30% this year as competition intensifies from the likes of Telstra and Vodafone.

The once dominant Telco is having to build new new broadband and mobile networks and cut prices to meet the rising competition from its rivals.

Telecom shares dropped more than 10% on Friday, the largest one day fall in 11 years.

The company says 2009 earnings will fall to between NZ$500 million and NZ$540 million in the 2009 year.

The company’s dividend payments will fall to 6 NZc a share in the first three quarters of fiscal 2009, compared with 7c a year earlier. All 2009 dividends will be paid without tax credits.

Telecom plans to increase capital spending to NZ$1.1 billion this year to finance the new networks.

The market is up 8. An unremarkable day. Financials down 0.7% after a dull performance overnight in the US. Resources up 0.2% after a strong lead from BHP, RIO and energy stocks in the US. Metal prices up. The SFE Futures were up 15 this morning.

 

Dow up 40. Up 69 at best. Down 95 at worst. Main Point: Financials down 1% on Freddie Mac and AIG’s ugly results and Morgan Stanley freezing home-loans. Energy and resources outperformed on good results. 6 out of 10 sectors up – indexes at 6-week highs. Dow encouragingly turned around a 0.7% loss to make a 0.3% gain holding onto the 331 or 3% gain yesterday. Large cap techs offset bad news in the financials. Nasdaq up 1.2% on better-than-expected results from Cisco. Oil price down 5.4% for the week already. Resources up 1% with BHP and RIO up strongly – up 4.36% and 4.72%. Energy outperformed – up 1.9% on better-than-expected results from Devon Energy. Refiners up with Tesoro and Valero up 12% and 7%. Sunoco up 3.3%. Freeport-McMoRan up 11%. Morgan Stanley froze the home-equity lines of credit for thousands of clients while their homes dropped in value. Telecoms down 1.4% - underperformed – Sprint Nextel and Qwest both reported a lost subscribers. USD climbed to 8-week high against the euro and 7-month highs against the yen – the global slowdown and less fears of inflation are helping the USD to rise.

• Both BHP and RIO up in ADR form overnight, 4.36% and 4.72% respectively. BHP down 6c to 3716c. RIO up 110c to 11550c.
• Metals mostly up overnight – Nickel up 1.17%, Zinc up 1.1% and Lead 2.53%. Aluminium up 0.21%. Oz Minerals up 2c to 176c.
• Oil price down 14c to $118.57 after the U.S. Energy Department’s EIA said crude inventories increased by 1.7m barrels to 296.9m for the week ended Aug. 1, slightly more than the 1.2m-barrel increase expected. Woodside up 77c to 5149c.
• Gold down $3 to $878.80. Newcrest down 40c to 2500c.
• US Bonds down with the 10 year yield up to 4.05% from 4.02%.

Nickel and copper stocks mostly upon a small bounce in metal prices (although copper futures dropping intraday). KZL up 2%, JML up 4,4%, WSA up 0.4% and PAN up 3.5%. Banks down again, NAB down 2.1% and CBA down 0.8%. Big industrials up with a sentiment change towards the consumer discretionaries after the RBA flip flopped their bias towards rate cuts on Tuesday. WOW up 1.5%, WDC up 1.5% and WES up 1.2%.

Unemployment numbers are out at 4.3% - steady on last month – new jobs strong. A$ jumped on the numbers. The European Central Bank makes an interest rate decision tonight. Expected to remain hawkish on rates and leave them where they are. Dow Jones Futures down a worrying 47 at the moment. Enough to keep you out of an overnight trade.

Company news

• Tabcorp (TAH) up 6% early on results - booked a hefty loss but underlying results in-line and there was some relief they were not worse. Market happy with solid underlying earnings and dividend being kept.
• Connecteast (CEU) down 16% early on “disappointing” first week of tolling falling to half the rate of toll-free period - UBS also downgraded the stock.
• Minara Resources’ (MRE) weak 1H report shows net profit down 80% on-year with no interim dividend – below consensus. Our analyst thought they’d fall over…but only down 2.7%.
• Fortescue (FMG) signs a rail and port agreement with Atlas Iron to give AGO access to their rail and Herb Elliot Port – Atlas Iron (AGO) up 14% early on the announcement.
• West Australia Newspapers (WAN) downgraded by brokers on poor FY08 results yesterday and cautious FY09 outlook – seen as a warning to all media companies….but up 4.13%.
• News Corp (NWS) kept mostly at a BUY by brokers after they posted results and positive guidance yesterday. A falling A$ helps. Down 3.11% or 52c to 1621c.
• ResMed (RMD) had its target price boosted by Credit Suisse after results yesterday showing positive top-line revenue growth. Up another 3% today.
• UBS has downgraded the Infrastructure sector after reviewing their cost of equity assumptions.
• Merrills says CBA’s crucial results on the 13^th are unlikely to surprise due to fairly good transparency around solid volume growth, improved margins and bad & doubtful debts at 23bps of total loans. Says CBA is under-provisioned yet has limited exposure to single-names. Down 25c to 4360c.
• Merrills expecting Telstra’s August 18^th FY08 result to be “very strong” with net profit up 14.4% and management’s long-term guidance to be upgraded. TLS up 4c to 453c.
• St George Bank has a briefing next Tuesday. SGB up 13c to 2898c.
• Corporate Express (CXP) downgraded by brokers post yesterday’s results showing falling customer sales and deteriorating market. Down 2%.