Oil Bull Market: Fast and Furious

Oil has now rallied 108% over the last 118 calendar days.  Based on the standard bull market defintion of a 20% rally preceded by a 20% decline, the current oil bull is already the sixth strongest since daily pricing begins in 1986.  In terms of duration, it only ranks 14th out of 26.  The average gain for prior oil bull markets has been 66.09%, while the average duration has been 217 days.  This makes the current rally in oil nearly twice the average bull market gain in nearly half of the average duration.

Source: Bespoken Research

Oil Up 99% In 75 Trading Days

Oil has rallied more over the last 75 trading days than it did at any time during its entire bubble run from 2001-2008.  In fact, its current rally of 99% since the February 12th low is nearly double the highest 75-day rally during the last oil bull (From December 2001 to April 2002, oil rallied 55% over 75-days.)  Oil has also gone from $33.75 to $67.75 in just 75 trading days.  During the 2001-2008 oil bubble, it took 409 trading days to complete the same task from January 2004 to August 2005.  While many investors are arguing that oil’s rally is a good sign for the global economy and equity markets, let’s hope it doesn’t keep up the pace, or else we’ll be right back to $150 in no time.

Source: Bespoken Research

Gold,Silver and Oil rises on weak Dollar

Crude Oil continued to make new highs for the year as focus has switched to the signs of pickup in demand from Asia combined with fears about inflation.

The continued weak economic outlook in Europe and the U.S. and subsequent drop in demand has been the main focus for the bears over the last few months. However crude has now rallied nearly 100% from the January lows and many are beginning to adjust their outlook.

OPEC at their meeting in Vienna refrained from further production cuts, something that is currently difficult to do as some members has been cheating and producing more. Instead they switched to verbal intervention as Saudi Arabia said that the global economy can handle a $75-80 Oil price as they saw demand picking up most notably in Asia. Front month Crude Oil broke above 200 day moving average at $62.18 and this strong technical picture helped drive prices above $65 this week

Up until recently the main factor driving Oil prices higher were the support from rallying stock markets combined with the weaker dollar.  This last move however has happened without the support from the U.S. stock market as no new highs has been seen for over two weeks now.

What has been seen is a rally in government bond yields as traders continue to sell bonds on the basis that yields could continue to rise as governments are struggling to finance ever increasing budget deficits. This week US 10 year yields rose to 3.71%, a level last seen in November 2008 long before Central Banks began Quantitative Easing.

Rising bond yields has unnerved investors and the subsequent risk of a dollar collapse or reemerging inflation are driving investors into commodities.

Technically the rally in Crude Oil is now well established and short sellers have got to be patient. With the break above $62.18 traders now look for a move back to the November high of $71.77 followed by the 38.2% retracement at $76.30.

On the downside $62.25 needs to give way before talk of a correction can begin followed by major support at $59.50. One major word of caution is the RSI level which indicates the market is overbought and the risk of a downside correction could be happening soon. 

I will be keeping an eye on the S&P 500 index which is currently stuck between 200 day moving average resistance at 930.50 and strong support at $885. Continued rise in bond yields and subsequent dollar weakness will be supportive for commodities.

Meanwhile precious metals continue to be driven higher by some of the already mentioned factors. Silver is heading for its biggest monthly gain in 22 years and Gold is back to a three month high with $1,010 again coming into play.

Flows into ETF Gold funds has not increased during the week which leaves us a little concerned about the sustainability of this rally. In the near term however the dominant factor behind moves in Gold will be moves in the US dollar which to certain extend is driven by movements in bond yields.

A further weakening of the dollar combined with geopolitical risks out of North Korea may revive investment demand for Gold and take it back towards the February high at $1010.

Oil Continues to Outperform Oil Stocks

Oil continues to rally on a daily basis and it is now up to $65/barrel after getting down to the $30s just a few months ago.  At the same time, oil stocks have lagged the commodity pretty significantly.  Below is a historical chart of the ratio between oil stocks and oil.  When the line is rising, oil stocks are outperforming oil, and when the line is falling, oil is outperforming oil stocks.  When oil tanked at the end of 2008, the ratio spiked like it never had before.  Since the ratio peaked, however, it has fallen nearly as fast as it rose.  The current ratio is right near its average over the last 7 years, but it is “oversold” based on recent action.  At some point this ratio is bound to reverse as oil stocks begin to catch up with the commodity, the commodity begins to pulls back in, or both.

Source: Bespoken Research

ASX Stock and CFD Report 14-5-08

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The SFE Futures suggested an 86 point fall in the market. BHP and RIO both down in ADR form overnight – 5.26% and 9.19% respectively. (BHP closed at the equivalent of 3288c, up 155c on yesterday’s close.) Metals down overnight – Copper down 3.35%, Zinc 4.47% and Aluminium 1.29%. Nickel down 1.36%. Oil price down 81c to $58.00. Gold up $2.00 to $925.90. Bonds up with the 10 year yield down to 3.1149%. A$/US$ down to 75.32c.

Financials down 5.2% – The KBW Bank Index – includes 24 of the US,s largest banks – was down 6.5%. Financials down 13% week-to-date. US lawmakers are demanding details from AIG about their asset sales program and the progress being made towards repaying the US taxpayer. CEO Edward Liddy said the risk of AIG failing and its consequent impact on the global financial crisis has been reduced but not eliminated. Standard & Poors said the nation’s banking crisis has not ended but “merely entered a new phase”, noting the fact that the largest financial institutions are being
propped up by billions of dollars of government support.

Energy stocks down 3% on the lower oil price. OPEC gave a lower demand forecast. Retailers down 3.3% on the worse-than-expected April retail sales figures. Wal- Mart down slightly outperforming the broader market ahead of its quarterly results tomorrow. Not a good day – down 113 – the SFE Futures suggested an 83 point fall. It is the fourth
consecutive day that the market has gone backwards despite some rises on Wall St. Resources doing most of the damage. BHP and RIO down 5.7% and 10.2% respectively.Financials down 2.5%. Energy stocks thumped.

ASX Stock and CFD Report 12-05-09

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The SFE Futures suggested a 51 point fall in the market. BHP and RIO down in ADR form overnight – 2.57% and 2.44% respectively. (BHP closed at the equivalent of 3503c, down 25c on yesterday’s close.) Metals all down overnight – Copper down 2.56%, Zinc 0.84% and Aluminium 0.32%. Nickel down 2.66%. Oil price down 79c to $57.79. Gold down $1.40 to $913.50. Bonds up with the 10 year yield down to 3.1736%. A$/US$ down to 75.90c.

Last week the banks had massive rallies so a pull-back is not a surprise – Wells Fargo was up 43.7% last week alone and JP Morgan was up 19.9%. Multiline Insurers and life and health insurers were hit the hardest – down 7.5% and 10.5% – down on the continuing debate over healthcare reform and the impact it will have on the industry. Tech stocks just up – Microsoft down 0.5% as they announced they will be raising cash through a debt issuance – didn’t reveal what amount they would raise, but last September noted they could take on up to $6bn in debt – Microsoft has $25bn in
cash. Telecom stocks comprised the only sector making a mentionable gain – AT&T will buy $2.35bn in assets from Verizon. Energy stocks down on the lower oil price after Fridays strong session – Occidental Petroleum down 3.7%. Ford Motors announced a public offering of 300m shares of common stock to partly fund the retiree health care trust.

The market is down 58. The SFE futures suggested a 51 point fall in the market this morning. Most sectors down. Resources and industrials getting hit the hardest – down 2.3% and 2.8%. BHP and RIO down 2.6% and 1.2%. Property trusts doing OK – up 0.2%. Energy  stocks down 1.7% after recent strong gains. Gold stocks mixed – NCM and LGL actually up despite the lower gold price overnight.

ASX Stock and CFD Report 6-05-09

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The SFE Futures suggested a 10 point rise in the market. BHP and RIO both down in ADR form overnight – 1.26% and 1.95% respectively.(BHP closed at the equivalent of 3445c, down 3c on yesterday’s close.) Metals mostly up overnight – Copper down 1.52%, Zinc up 0.99% and Aluminium up 0.32%. Nickel up 0.36%. Oil price down $0.64 to $53.81 – Inventories are expected to reveal oversupply and undermine some of the recent confidence around the energy sector. Gold up $2.10 to $904.30. Bonds down with the 10 year yield up to 3.162%. A$/US$ up to 74.27c. Energy stocks down 1.3% as the oil price fell 1.2% – oil exploration companies down 3.8%.

Material stocks down 0.6% – steel stocks down 1.8% – AK Steel cut its guidance. Healthcare stocks down 0.6% – did better towards the end of the session led higher by managed health care companies (+4.8%) and pharmaceuticals (+1.1%). Pulte Homes posted a 1Q loss but much improved on last year. Kraft buoyed the Dow with better-than-expected results. General Motors is considering offering shareholders a reverse stock split – one share of new stock for every 100 owned. Financials down 1.2% – not bad considering the 10% rally yesterday. Investors skittish on the banks and fund managers leading up to the stress-test results. KeyCorp and Fifth Third Bancorp down 5% each. Legg Mason fell heavily on news that investors pulled out $44bn from its funds in the March quarter.

The market is down 33 – up 17 at best. The SFE Futures suggested a 10 point rise in the market this morning. Financials. property stocks and industrials up early but all dropped into the red before noon. Resources and energy stocks down after their decent run yesterday. BHP and RIO down 2.3% and 2.0%.

ASX Stock and CFD Report 5-05-09

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The SFE Futures suggested a 75 point rise in the market. BHP and RIO both up in ADR form overnight – 4.57% and 5.45% respectively. (BHP closed at the equivalent of 3488c, up 106c on yesterday’s close.) Metals closed on the London Metals Exchange overnight - resumes on the 5th May (tonight). Oil price up $2.27 to $54.45. Gold up $14.10 to $902.20. Bonds up with the 10 year yield down to 3.1476%. A$/US$ up to 74.09c.

Big manufacturers up on growing optimism about the economy – United Technologies up 3.4%. Boeing up 2.3% confirming maiden plans for the 787 Dreamliner. Nasdaq up – Apple did the best – up 3.8%. Home builders up 9% on the better-than-expected pending home sales figures – Lennar up 9.3%, Toll Brothers up 6.5% and DR Horton up 9.1%
CRB Commodities index up 1.5% – miners, material stocks and energy stocks all up. Earnings reports – OK – Sprint Nextel beat quarterly earnings estimates – up 7.1% for the session. Lawyers onside some major Chrysler lenders are trying to block the US government brokered sale of Chrysler’s most precious assets to Italian automaker Fiat.
The White House said they don’t need to approach Congress for more bank bailouts right now. Bloomberg reported Monday that Citigroup was looking for more capital to shore up their balance sheet, but was talking to private investors rather than transferring more control to the government. The Financial Times said the company would raise another $10bn – they denied the claims.

The market might have done its dash for the day – up 9 now – we were up 60 earlier. RBA
expected to keep rates on hold at 3% later on this afternoon.

ASX Stock and CFD Report 4-5-09

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The SFE Futures suggested a 23 point rise in the market. BHP and RIO both up in ADR form Friday – 2.70% and 5.56% respectively. (BHP closed at the equivalent of 3375c, up 75c on Friday’s close.) Metals up Friday – Copper up 3.81%, Zinc 6.32% and Aluminium 3.01%. Nickel up 1.88%. Oil price up $1.83 to $52.18. Gold down $3.00 to $888.20. Bonds down with the 10 year yield up to 3.1523%. A$/US$ up to 73.04c.

In a move to stimulate the flow of credit to the real economy, The Fed said commercial mortgage backed securities and securities secured by insurance premium finance loans could be used as collateral under the TALF plan. Warren Buffett said not all the banks operate under the same business model as Citigroup and that Citigroup,s losses have distorted investor perception about US banks – he said banks like Wells Fargo as much better positioned to ride out the recession. Energy stocks up 3.1% after being down 2.1% Thursday. The natural gas price was up 5.1% Friday and oil was up 3.6%. Chevron reported earnings down over 50% from the year before – but still finished up 1.2% the session. Industrials up 1.1%. Material stocks up 0.3%. Boeing, Caterpillar, and Alcoa all up on the better consumer confidence figures and better-than-expected manufacturing data. Ford said April sales were down 31.6% on-year. General Motors said April US sales were down 3.4% on-year.

Good start to the week – our market is up 72 – more than triple the 23 point gain the SFE Futures predicted this morning. Macquarie is out of its trading halt and down 4%. Resources and Banks doing well. Economists expect the RBA to leave rates at 3% when it meets tomorrow.

ASX Market Report 1-05-09

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The SFE Futures suggested an 18 point rise in the market. BHP and RIO both up in ADR form overnight – 0.80% and 3.15% respectively. (BHP closed at the equivalent of 3318c, down 8c on yesterday’s close.) Metals up overnight – Copper up 1.40%, Zinc 0.99% and Aluminium 2.54%. Nickel up 3.32%. Oil price up $0.16 to $50.35.
Gold down $9.30 to $891.20. Bonds down with the 10 year yield up to 3.1197%. A$/US$ down to 72.525c.

Financials down 0.8% – banks were sold off after gains yesterday. The House has passed a credit card law to prevent companies from suddenly boosting interest rates and to curb their more crafty practices. The government’s results from the stress testing of the banks will be delayed as examiners and executives debate the preliminary findings.
Energy stocks down the most – fell 2.1%. Oil and gas drillers down 3.5%. Big integrated companies like Exxon Mobil also brought the sector down – Exxon finished down 2.6% on a quarterly earnings report that fell short of expectations. Both Exxon and Marathon Oil posted quarterly profit over 50% below that posted in the same quarter a year ago – it was only last year than Exxon, the most widely traded oil stock on Wall Street, posted record profits – it was their worst result in 5 years. Doesn’t bode well for the oil sector’s impending results. Chrysler filed for chapter 11 bankruptcy – will temporarily halt most of its car production while completing a deal with Italian car manufacturer Fiat – a group of key creditors wouldn’t go along with Chrysler’s proposal to reduce $6.9bn in secured debt. Ford said the fate of Chrysler going bankrupt wouldn’t affect its own supply – up 9.7%.

Quiet day on our markets – down 10 points – a little disappointing considering the SFE Futures suggested an 18 point rise. Resources down 0.7% with BHP and RIO down 1.1% and 1.7%. Property and industrials down 0.3% and 0.1%. Financials up 0.2% – banks mostly up – NAB up the most at a 1.1% rise. Gold stocks down on the lower gold price overnight.

ASX Market Report 29-04-09

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The SFE Futures suggested a 29 point rise in the market. BHP and RIO both down in ADR form overnight – 1.18% and 5.67% respectively. (BHP closed at the equivalent of 3213c, up 5c on yesterday’s close.) Metals down overnight – Copper down 3.68%, Zinc 2.33% and Aluminium 0.69%. Nickel down 4%. Oil price down $0.28 to $49.01. Gold down $14.60 to $893.60. Bonds down with the 10 year yield up to 3.0082%. A$/US$ down to 70.635c.

JP Morgan was up a couple of percent early in the session but finished relatively unchanged. Financials dragged on the markets for most of the session, but the higher-thanexpected consumer confidence figures from the Conference Board gave a lift to the broader market. Telecom stocks rose the most – up 1.2% – Verizon announced it is looking at
some ventures with other firms to develop its advanced generation mobile phones. IBM upped its quarterly dividend by 5c to 55c per share and announced a $3bn stock repurchase – despite the positive news, the tech stocks closed 0.6% down. IBM was up 2%. Biotech stocks up 0.8% – healthcare stocks up 3.6% – Hospira and Coventry Health posted better-than-expected quarterly results. Pharmaceutical stocks down 0.8% despite Pfizer and Bristol-Myers Squibb
announcing solid earnings over the quarter.

The market is down 18. The SFE Futures suggested a 29 point rise in the market this morning. Financials down 1.5%. Banks all down. ANZ down 6% on lower-than-expected 1H results. Resources down 0.8%. Industrials and property up 0.2% and 0.5%. Energy stocks doing well despite the fall in the oil price overnight.

Tricom Trader Australian Stock Market Report 6-4-09

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The SFE Futures suggested a 33 point rise in the market. BHP and RIO both up in ADR form Friday – 0.20% and 1.76% respectively. (BHP closed at the equivalent of 3447c, down 13c on Friday’s close.) Metals all up Friday – Copper up 3.64%, Zinc 2.85% and Aluminium 3.57%. Nickel up 3.31%. Oil price down 0.2% to $52.52. Gold down $11.60 to $897.30. Bonds flat with the 10 year yield at 2.8917%. A$/US$ down 0.02% to 71.57c.

Treasury’s Geithner said he’s prepared to change the directors and senior management of banks that are receiving considerable financial support from the government. He noted, by way of example, the change of CEO’s at AIG, Fannie Mae and Freddie Mac when they avoided failure through government intervention. Healthcare stocks down 1.6% – Congress intends to overhaul the healthcare sector. Research in Motion (RIMM) gave upside guidance and better-than-expected results at their quarterlies – Deutsche Bank upgraded RIMM. IBM’s acquisition talks with Sun Microsystems have stalled – the pending deal is unlikely to proceed tomorrow as was previously expected.
Europe’s biggest bank – HSBC Holdings – raised $17.7bn as the British bought shares in the largest ever rights issue.

The market is up 15 – was up 26 earlier. Financials up 1% after a strong session in US financials Friday. Industrials up 1.2%. Major miners down – BHP down 1.4% and Rio down 1.9%. The zinc and nickel sectors are flying on higher metal prices. Major energy stocks mixed. Gold stocks all down on the falling gold price. BEN struggling after its trading update – down over 8.6%.

Engery ETF – XLE

The energy sector has been moving sideways since October if, you look at the XLE energy ETF below. Although the energy sector dipped lower in March the bullish percent index is showing some signs of strength. A lot of stocks continued to drift lower in March due to the lack of buyers and not because of heavy selling. This pulled the sector lower until buyers stepped in and pushed things higher again.

Energy Stocks ETF – Daily Chart

Sideways price action since October with momentum pushing higher.

Tricom Today ASX Stock Market Report 30-3-09

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The SFE Futures suggested a 37 point fall in the market. BHP and RIO mixed Friday in ADR form – BHP down 5.15% and RIO up 1.38%. (BHP closed at the equivalent of 3333c, down 68c on Friday’s close.) Metals mostly down Friday - Copper down 0.86%, Zinc up 0.15% and Aluminium down 1.59%. Nickel down 0.26%. Oil price down 2.7% to $52.41. Gold down $16.80 to $923.20. Bonds unchanged with the 10 year yield at 2.7607%. A$/US$ down 0.04% to 68.96c.

No major news or announcements Friday. Stocks up 6.2% for the week. Widespread weakness. Financials up 12.2% for the week. Commodity stocks down on lower oil and metal prices. May oil futures down 3.6%. Material and energy stocks down 2-3%.General Motors up whilst announcing they are offering union members $10bn in preferred stock with a 9% coupon and $10bn in cash amortized over 20 years.IBM posts a gain. February personal income and spending in-line. Real personal consumption down.

The market is down 51 underperforming the 37 point fall predicted by the SFE Futures this morning. All sectors are down. Resources fairing the worst. BHP down 3.2%. RIO is the sole hero holding the market up a few index points. Banks down – only WBC up 0.7%.

Tricom Today Australian Stock Market Report 26-3-09

The SFE Futures suggested a 15 point rise in the market. BHP up 1.36% in ADR form and RIO down 1.16%. (BHP closed at the equivalent of 3306c, down 20c on yesterday’s close.) Metals mixed overnight – Copper down 0.25%, Zinc down 1.54% and Aluminium up 0.35%. Nickel down 1.54%. Oil price down 2.1% to $52.24. Gold up $12.00 to $935.80. Bonds down with the 10 year yield up to 3.3%. A$/US$ up 0.29% to 69.755c. Financials closed up 4.6% – up 6.5% at best and down 2.5% at worst – there were some fears over the weak demand for the auction of $34bn in government 5-year treasuries to raise funds as part of the economic rescue program. The demand for $40bn in 2-year treasuries yesterday was much stronger. The main concern, is that the weak demand for government debt and the fears it raises, reminds investors just how reliant on the government’s bailout the economy and financial institutions are. Bank of America up 6.65% on comments it would repay government debt soon. IBM was slated in The Wall Street Journal that it would cut jobs.

Energy stocks down on the lower oil price. February’s durable goods orders for airplanes, cars, appliances, furniture and other significant goods, was up 3.4% – far better than the 2% drop expected – and the biggest jump up in 14 months. Durable goods had drop consecutively for the last 6 months. February new home sales rose 4.7% to an annualized 337,000 – but still the worst month on record since 1963.

The market is up 23 slightly better than the 15 point gain the SFE Futures predicted this morning. Gold and Healthcare stocks going along nicely. Quiet day on the news front. Seems as if the market is taking a bit of a breather after the recent rally.

Tricom Today ASX Stock Market Report 25-3-09

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The SFE Futures suggested a 25 point fall in the market. BHP and RIO both down in ADR form overnight – 5.37% and 2.10% respectively.(BHP closed at the equivalent of 3273c, down 109c on yesterday’s close.) Metals all down overnight Copper down 2.09%, Zinc down 1.39% and Aluminium down 2.28%. Nickel down 1.02%. Oil price up 0.6% to $53.36. Gold down $29.00 to $923.50. Bonds down slightly with the 10 year yield up to 2.7073%. A$/US$ flat overnight at 69.55c. Financials down 6.5% – Citigroup down 3.5%, Bank of America down 7.2%. JP Morgan down 8.6%. The economy still has problems with excessive debt – The unemployment rate sits at 8.1% – the highest level since the early 1980’s, House prices continue to fall. consumers refuse to spend and credit markets remain tight.

Treasury’s Geithner asked Congress to provide him with the power to safely dismantle large financial companies that pose a major risk to the economy. The SEC are still considering the modification to the “uptick rule” with regard to shortselling stock, with pressure from exchanges like the NYSE and the NASDAQ for changes to be made. Energy stocks down 2.2% despite a rebound in crude oil futures.Tech stocks down 1.6%. Some of the large names fell harder – Microsoft and Intel both down over 2.5%. The market is up 29 outperforming the 25 point fall predicted by the SFE Futures this morning. BHP and RIO down 1.9% and 0.5%. Financials and property both up – banks all up despite US financials down 6.5% – NAB outperforming – up 4.4%. Macquarie Group down 1.8% today – A couple of brokers suggest it has done its dash – Both Royal Bank of Scotland and Citi cut their recommendation to Hold from Buy due to its recent outperformance. The stock is up 47% so far this month.

ASX closes higher after Wall St surge

The Australian share market closed higher on Tuesday but nowhere near the near seven per cent surge on Wall Street as local bank stocks wound back the earlier gains from the big miners and energy stocks.

The benchmark SP/ASX200 index was 29.7 points, or 0.84 per cent, higher at 3580, while the broader All Ordinaries gained 34.2 points, or 0.98 per cent to 3517.3.

At the close of day trading on the Sydney Futures Exchange, the June share price index contract was 51 points higher at 3604, on a volume of 29,599 contracts.

Austock Securities senior client adviser Michael Heffernan said Wall Street’s positive move prompted the gains on the local market, with oil-based stocks and the big miners the drivers.

‘We bolted out of the gate given the six per cent plus moves on Wall Street last night but it was very much a see-sawing day, certainly for some of the major bank stocks,’ Mr Heffernan told AAP.

‘The oil-based stocks along with BHP and Rio did the driving today, while the financials ran out of puff towards the end.’

Tricom Today ASX Stock Market Report 19-3-09

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The SFE Futures suggested a 31 point rise in the market.BHP and RIO mixed in ADR form overnight – BHP up 2.15% and RIO down 2.3%.(BHP closed at the equivalent of 3166c, up 58c on yesterday’s close.)Metals mostly down overnight – Copper down 1.16%, Zinc down 3.64% and Aluminium up 0.44%. Nickel down 2.23%. Oil price down 1.7% to $48.12 on a government report showing a bigger-thanexpected inventory increase in the US. Gold down $27.70 to $889.10, but rallied after hours $50+. Bonds up with the 10 year yield down to 2.5419%. A$/US$ up 2.21% to 67.66c. Material and energy stocks finished higher despite the fall in oil and metals overnight. Technology stocks up on the news IBM is in takeover talks with Sun Microsystems – reports of at least $6.5bn in cash for the deal are being bandied around. Oracle announced positive results after the close. Financials up 10.1% on the announcements from the Fed regarding their plans to further stimulate the economy, increasing the flow of credit and creating demand for assets. Diversified financials services companies up 13.2%. Diversified banks up 14.9%. Our market is having a good day – up 20 – up 54 at best and in line with the 31 point rise predicted by the SFE Futures this morning. Most sectors up – only healthcare and telecom stocks down. Financials, Resources and Industrials outperforming.

Tricom Today Australian Stock Market Report 12-03-09

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The SFE Futures suggested a 21 point rise in the market. BHP and RIO both up in ADR form overnight – 1.93% and 4.54% respectively. Metals mainly down overnight – Copper down 3.52%, Zinc down and Nickel 1.36%.Aluminium up 1.29%. Oil price down 7.1% to $42.46 on US inventories rising unexpectedly by 700,000 barrels for the week ending March 6Gold up $14.80 to $910.70. Bonds up with the 10 year yield down to 2.9057%. A$/US$ up 0.6c to 65.19c. Financials down 2.4% – Freddie Mac is asking the government for another $30.8bn to stay afloat after posting a $50bn loss last year due to falling home prices. Citigroup up 6.2%, JP Morgan up 4.6%. The congressional committee will meet tomorrow to address the “mark-to-market” accounting rules which are ensuring the banks make massive writedowns. A temporary suspension of the practice could lead to a short-term rally in the banks. A CNBC report said JP Morgan Chase was profitable in the first two months of the year. Healthcare stocks down 2.0% – Pfizer had its credit rating cut by Moody’s to Aa2 from Aa1. Energy stocks down 1.2% thanks to the struggling oil price. The market is up 4 – up 28 early at its high. The SFE Futures predicted a 21 point gain this morning. Resources and property trusts outperforming. Unemployment figures have come out better-than-expected but have failed to inspire the market. They make a rate cut less likely next month.

Tricom Today Australian Stock Market Report 11-3-09

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The SFE Futures suggested a 99 point rise in the market. BHP and RIO both up in ADR form overnight – 9.85% and 13.27%. Metals all up overnight – Copper up 3.02%, Zinc 3.27% and Aluminium 1.77%. Nickel up 2.69%. Oil price down 2.8% to $45.68 on the back of the government lowered its forecast for global energy demand. Gold down $22.10 to $895.90. Bonds down with the 10 year yield up to %3.0071. A$/US$ up 1.4c to 64.59c. Libor rates are rising again to spreads not seen since December – suggests falling confidence between institutions lending to each other – not a good sign. The Commercial Mortgage-Backed Securities Index (CMBX) and the TED Spread (the difference between the 3-month Libor and 3-month Treasury bill) are both at 4-month highs – suggesting lending to the real economy is not going to improve in the near future and will work to increase the severity of the recession. Whirlpool reaffirmed 2009 guidance. United Technologies guided short of consensus. Texas Instruments and Exelon said their earnings will be in-line. Kroger gave guidance on the upside. There are reports that Roche said it deemed the $93per share bid from US biotech group Genentech as a “fair” deal. The market is up 71 underperforming the 99 point rise predicted by the SFE Futures after Wall Street jumped nearly 6% overnight – its biggest rally in 3 months. Without the BHP contribution, the market would only be up 50. The Banks, Westfield and RIO lifting the market
close to 20 points. Pretty quiet on the company news front. Most of the miners up. Gold and energy stocks down on the lower gold and oil price. Healthcare sector also down.