Tricom Today ASX Stock Market Report 2-3-09

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The SFE Futures suggested a 40 point fall in the market. BHP and RIO both down in ADR form overnight BHP down 1.94% and RIO down 2.76%. Metals down overnight – Copper down 0.03%, Zinc down 0.88% and Aluminium down 1.61%. Nickel down 0.55%. Oil price up 2.3% to $0.97. Gold unchanged $942.50. Bonds down with the 10 year yield up to 3.01775%. A$/US$ down 1.75% to 63.64c. 4Q GDP down to an annualized rate of -6.2% from the estimated -3.8%. Exports down, personal consumption down, equipment and software down, and investment in the residential sector was down. Government spending helped to buoy the numbers. Citigroup will swap common stock for preference shares from the government giving them a 36% stake in the bank. Standard & Poor’s moves Citigroup to Negative. Moody’s also lowered their long term rating on the bank. Industrials down 2.7% and down 18% for the month- GE slashes its dividend to $0.10 from $0.31. The cut will protect its AAA credit rating. Merkel and other EU leaders rejected a massive bailout for eastern Europe Germany said eastern European states should be granted cash injections via a case by case scenario not wholesale as many in the EU were pushing for. Earnings reports were dour GAP, Kohl’s and Dell all missed 4Q expectations. Bad start to the week – we are down 84 having been down 111. Worse than the 40 point fall predicted by the futures this morning. Financials and Industrials down 4.3% and 4.8% respectively following Wall Street’s poor session on Friday. BHP knocking 19 points off the index on its own by midday. The RBA decide on interest rates tomorrow – the bond market has factored in a 75% chance of a 50bp cut – if they cut rates it will be the sixth time in a row.

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