Morning Stock Report – Stocks to Watch 20-7-09

International Markets

• Market:

-          Modest gains Fri, but week caps off biggest weekly performance since March for the Dow & 500.

-          Dow sectors mixed: Best; Tech +2.6%, Telco’s +0.7%, Cons Services +0.4%. Worst; Industrials -1.1%, Healthcare -0.3%, Basic Materials -0.2%

-          Weekly movements: S&P500 +7%; NASDAQ up 7.4%; Dow up 7.3%

-          Bank of America & Citi reported big profits but weakness in their loan portfolios.

-          Treasuries post first decline in 6 weeks. Yield on 10yr highest level in 3 weeks +34bpts to 3.65%.

• Commodities:

-          Gold rose as hedge against inflation following the increase in housing starts. Platinum also gains.

-          Oil gains more than $1 a barrel.

-          Fertilizers: Vale says they have not made any offers to acquire assets. Mosaic drops.

• Eco Data:

-          Housing Starts 582k v cons 530k (+3.6% highest since 2004)

-          Building permits 563k v cons 524k

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ASX Stock and CFD Report 29-6-09

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The SFE Futures suggested a 1 point rise in the market this morning. BHP and RIO both down in ADR form overnight, down 2.18% and 0.91%. BHP closed at the equivalent of 3387c, down 31c on Friday night’s close. Metals down – Copper down 1.91%, Nickel up 0.81%, Zinc down 3.7%, Aluminium down 2.54%. Oil price down 0.8% or 54c to $69.16. Gold up $1.50 to $941. Up 0.16%. Bonds up – 10 year yield at 3.506% down from 3.546%. A$ hovering at 80.56c.VIX Volatility Index down 1.63% to 25.93. Dow Jones down but Nasdaq up and S&P 500 flat.

S&P 500 has first two week fall since the bottom in March.End of year window dressing and the annual reconstruction of the Russell indices (happened on Friday) made for a mushy session and the third highest volume this year most of which came in the last few minutes of the session. Bonds up – from Friday to Friday US 10 year bond rates fell 25bp. Financials up 0.6%. Energy sector down on lower oil price. Nigeria has offered to free the leader of themain insurgent movement in the oil-rich Niger Delta region. Housebuilders down on poor results from KB Homes which fell 9%. Google and Apple helped the Nasdaq to close up. Slow news session. Personal income and spending numbers higher than expected helped by Obama stimulus spending – feeds into this Q’s GDP numbers but economists question the sustainability once the fiscal stimulus expires. In Europe UBS AG fell after raising around 3.8bn Swiss francs in a share issue to institutional investors. They also flagged a bigger than expected Q2 loss.

The market is up 3 compared to the 1 point gain the SFE Futures predicted this morning. We were up 23 at best this morning. Wotif.com has hit a fresh yearly high today as has Karoon Gas. The Dow Futures suggest an 11 point fall on Wall Street tonight.

ASX200 Stock and CFD Report 22-6-09

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The SFE Futures were unchanged this morning. BHP and RIO both up in ADR form overnight, up 1.17% and 4.52%. BHP closed at the equivalent of 3496c, up 26c on last Friday’s close. Metals mostly up - Aluminium up 2.36%, Copper and Nickel up 1.2%. Oil price down 2.6% or 1.82c to $69.60. Gold up $1.60 to $936.20. Bonds up - 10 year yield at 3.7890% down from 3.8340%. A$ still just over 80c at 80.22c. VIX Volatility Index down 6.8% to 27.99.

Tech stocks up on a rally in Apple (new iPhone released) and Microsoft. Financials up - AIG up 4%. JP Morgan up 2.5% despite announcing a $1.1bn provision on ‘accelerated amortization’. Bonds up – this week there is a massive US$104bn of bond issuance in the US. The appetite for that will be important for market sentiment and the ability of the US government to fund the recent spending and bailout explosion. Energy sector down as the Oil price fell under $70. Royal Dutch Shell Plc made a natural gas discovery at a record depth in the northern Norwegian Sea that could equal the size of Norway’s annual production of the fuel. Housebuilders up – Struggling UK homebuilder Taylor Wimpey Plc jumped after saying that its British order book had rebounded. The European Union said it saw the first signs of a ‘sustainable economic recovery’. It also stated that it had started planning to roll back the fiscal stimulus programs implemented to revive euro-zone economies. Bank of England Governor King said that the bank saw signs that the UK’s economic contraction was beginning to level off. Suggestions the IMF are about to revise up their global growth forecasts (big deal). 

The market is up 10. The Futures were unchanged this morning. The Dow Futures predict a 10 point fall on Wall Street tonight. Quiet start to the week. The NAB made an insurance acquisition. New Motor Vehicle sales show the second monthly rise on the trot having fallen for 10 months straight. Not much else to report.

ASX200 Stock and CFD Report 19-6-09

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The SFE Futures suggested a 21 point rise in the market this morning. Better than expected Leading indicators, Philadelphia Fed index and jobless numbers fed hopes of a green shoots recovery. BHP up 0.34% in ADR form overnight with RIO down 5.82% having fallen 9.0% in our market yesterday and 7.5% in ADR form the night before. BHP closed at the equivalent of 3466c, down 4c on last last night’s close. Metals up small – Aluminium and nickel the best up 1.26% and 1.09%. Oil price up 35c to $71.42. Gold down $1.40 to $934.60. Down 0.15%. Bonds down – 10 year yield at 3.834% up from 3.647%. A$ still just over 80c at 80.02c. VIX Volatility Index down 4.97% to 30.03.US$104bn of US bonds will be auctioned next week (2-year: US$40bn; 5-year: US$37bn; 7-year: 27bn). How they go will be a good/important gauge for bondissuance appetite.

Royal Dutch Shell cut crude oil production in Nigeria, OPEC’s seventh-biggest producer, after the Trans Ramos pipeline in Nigeria’s Bayelsa state pipeline was attacked Wednesday. The OPEC President commented that global oil prices of around US$70 a barrel were deemed to be satisfactory for producers and consumers alike. The British Treasury Minister said the government would force institutions trading complex derivatives to hold more capital, in an attempt to reduce risk in this massive financial market segment, in line with recently announced plans in the US.Treasury Secretary Geithner gave testimony to Congress about financial regulatory reform without any real impact on the markets.

 The market is up 14 compared to the 21 point rise in the ASX 200 Futures this morning. The Dow Futures suggest a 24 point rise on Wall Street tonight. We have a pretty quiet week ahead except for an FOMC meeting which is thought likely to try and kill the suggestion that interest rates could rise. We also have US$104bn of bonds being issued in the US – a good test of the appetite for a growing US government debt issue program.

Morning Stock Market Report – Stocks to watch 4-6-09

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International markets:

• US markets pull back after weak eco data fails to inspire confidence in rally.
• All 10 industries in the S&P 500 retreated after Bernanke says budget deficits threaten financial stability
• Oil -3.6%, Energy Dept report showed US supplies unexpectedly increased, and fuel consumption plunged to 10yr low.
• Commodities, Biggest drop in 6 weeks with the dollar rebound. CRB index -2.8%. Alcoa the worst hit on the Dow -4.3%. Gold also down -1.9%.
• Cu -3.7%, RIO comments copper may reverse recent gains as global recession creates ‘uncertain’ outlook. Higher px’s not necessarily supported by demand.
• Platinum +0.1%, 8 mth high, +32% this year. US auto sales better than expected the s-term driver.
• Uranium, Comments from RIO & Cameco that spot prices too low to spur development of new mines, leaving pot’l shortfall in supply.
• Homebuilders, Toll brothers & Hovnanian Ent -6.6% after reporting Q2 losses and missing estimates.
• Treasury’s and USD rebound. Yield on 10yr down to 3.54%. USD gained against Euro & Pound.
• Eco: ADP employment change -532k v cons -525k; ISM non-manf 44.0 v cons 45.0; Factory orders +0.7% v cons +0.9%.

Stocks to Watch

DXS trading at a 33% discount to the post raising NTA of $1.14. n/a 

CFX strong revenue stream and low debt levels. $1.85

CCL 6-9% EBIT growth and PE premium. $9.00

SAI defensive and growth characteristics along with Australian monopoly position deserve premium. n/a

SELL – Currently no sell recommendation.

ASX200 Stock and CFD Report 26-5-09

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US Equities and Treasuries Markets Closed For The Memorial Day Public Holiday. UK markets closed for the Spring Bank Holiday.

Commodities and Futures: The SFE Futures suggested an 8 point fall in the market this morning. Oil price down slightly even though the US trading floor was closed - Oil is up 35%year-to-date. Gold up $1.45 to $958.80. A$/US$ down to 78.25c.

Main Points from overnight: Main European indices up after being down early in their sessions due to
nervousness about the North Korean nuclear tests.  German business index data was positive - up to 84.2 in May from 83.7 in April. Yen down against the US$ on North Korean missile fears. Euro up against the US$ on positive German business index data.

US Diary tonight : Economics - Shiller home price index, consumer confidence. Company Report – Take Two.

The market is up 3 - quiet morning on the back of the US and the UK markets being shut. The Dow Futures suggest an 8 point fall on Wall Street tonight.

May Stock Market Update & Asset Allocation

Click on the video below to watch the May Stock Market update.

ASX Stock and CFD Report 7-05-09

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The SFE Futures suggested a 67 point rise in the market. BHP and RIO both up in ADR form overnight – 3.15% and 3.26% respectively. (BHP closed at the equivalent of 3525c, up 135c on yesterday’s close.) Oil price up $2.48 to $56.29.

Financials up 8.1% – banks up strongly on media reports that the banks balance sheets might not be as bad as some were expecting - the government’s stresstesting results are due Thursday in the US after the close (tomorrow morning our time). Leaks to the media suggest American Express, JPMorgan Chase & Co and Bank of New York Mellon Corp won’t have to raise new capital. Apparently Regions Financial Corp will have to bolster their balance sheet. Citigroup is reported to need $5bn and the Bank of America and Wells Fargo is expected to have to raise more capital. Also, the Senate passed an amendment that could make it less costly to pull out of the TARP program. Diversified and regional banks up 12.7% each. Among the 19 financials who were stress-tested, AmEx was up 2.2%, JPMorgan up 6.9%, Bank of New York Mellon rose 11.1%.

The 19 banks tested include: JP Morgan Chase & Co, Citigroup, Bank of America, Wells Fargo, Goldman Sachs Group, Morgan Stanley, MetLife, PNC Financial Services Group Inc, U.S. Bancorp, Bank of New York Mellon Corp, GMAC LLC,
SunTrust Banks, State Street Corp, Capital One Financial Corp, BB&T Corp, Regions Financial Corp, American Express, Fifth Third Bancorp and KeyCorp.  The banks requiring more capital will 1 month to come up with a plan and 6 months to raise cash in the private markets – the government might also intervene in some institutions by converting their preferred shares – quasi debt – to common stock – but this would dilute current shareholder value and put taxpayer dollars at risk.

The market is up 82. The SFE Futures suggested a 67 point rise in the market this morning. Most sectors up. Strong day. Talk of China’s GDP growth rate coming in better-thanexpected. Resources up 4.3% – BHP and RIO up 5.2% and 3.3%. Industrials up 2.1%. Financials up 1.2% – banks all up – WBC up another 3.1%.

ASX Market Report 23-4-09

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The SFE Futures suggested a 12 point fall in the market. BHP and RIO mixed in ADR form overnight – BHP down 1.22% and RIO up 5.13%. (BHP closed at the equivalent of 3204c, up 55c on yesterday’s close.) Metals mostly up overnight - Copper up 0.73%, Zinc down 0.34% and Aluminium up 0.69%. Nickel up 0.17%. Oil price up 76c to $47.41. Gold up $9.80 to $892.50. Bonds down with the 10 year yield up to 2.9397%. A$/US$ down 0.09% to 70.47c.

Morgan Stanley down 9% posting a larger-than-expected $578m loss over the quarter – noted a deterioration in the commercial real estate market. The loss was also comprised largely from an improvement in the value of its own debt. They also announced a dividend cut. Bank of America down 5.7%. Wells Fargo did well for most the session but closed down 3.4% – earnings fell inline with their guidance but beat analyst’s expectations - they also posted higher credit losses. The better-than-expected earnings came largely from increased mortgage revenue. AT&T up 1.82% – the US’s biggest telecommunications carrier – surpassed analyst,s expectations with strong results across its wireless business. Yahoo! up 0.70% as it plans to cut 700 jobs – earnings were down 78% for the quarter but better-than-expected.

The market is up 42. The SFE Futures suggested a 12 point fall in the market this morning. Strong performance this morning after yesterday’s mixed session. Resources up 1.3% – BHP and RIO up 1.5% and 5.4%. Financials up 0.9%. Property down 0.6%.Industrials down 0.2%.

Tricom Today Australian Stock Market Report 17-4-09

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The SFE Futures suggested a 40 point rise in the market. BHP and RIO mixed in ADR form overnight – BHP down 0.33% and RIO up 4.25%. (BHP closed at the equivalent of 3361c, up 42c on yesterday’s close.) Metals all down overnight – Copper down 1.87%, Zinc down 1.51% and Aluminium 2.18%. Nickel down 0.40%. Oil price up 71c to $49.97. Gold down $13.70 to $879.80. Bonds down with the 10 year yield up to 2.8368%. A$/US$ down 0.09% to 72.01c.

The market seems to be factoring in a stabilizing economy – the pace of new home construction seems to be nearing a bottom, initial jobless claims were down more than expected, and JP Morgan’s profits were better-than-expected – both Wells Fargo and Goldman Sach’s announced positive earnings reports. Financials rallied late and finished up 0.6% – JP Morgan led the way posting better-than-expected quarterly results. JP Morgan Stanley’s results did reveal higher loss provisions reminded the market toxic assets are still a core issue to deal with. Citigroup up 1% ahead of results which will be posted before the opening bell Friday. Regional banks got a boost – Regions Financial Corp up 34% saying it will post a profit for the quarter. Fifth Bancorp up 7%. Huntington Bancshares up 8.2%. Industrials were up 2.9% – General Electric up 3.7% ahead of their quarterly results tonight in the US. Technology stocks up 3.2%.
Consumer discretionary stocks up the most – up 3.4%.
The market is up 67. The SFE Futures suggested a 40 point rise in the market this morning. The All Ords is testing a 3700 resistance ceiling – technically the next target up is 3950. Zinc stocks flying again. Gold stocks struggling.

Tricom Today Australian Stock Market Report 16-4-09

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The SFE Futures suggested a 38 point rise in the market. BHP and RIO mixed in ADR form overnight – BHP up 1.95% and RIO down 1.69%. (BHP closed at the equivalent of 3337c, down 17c on yesterday’s close.) Metals all up overnight – Copper up 2.55%, Zinc 5.56% and Aluminium 0.13%. Nickel up 5.49%. Oil price down 25c to $49.26. Gold up $1.50 to $893.50. Bonds up with the 10 year yield down to 2.7653%. A$/US$ down 0.04% to 72.79c.

Technology stocks underperformed. Financials up 5.6% – best performing sector. JP Morgan up 6% ahead of their results tomorrow. Fed’s Beige book said the pace of economic contraction is slowing. Intel beat earnings expectations. The administration announced the first 6 companies who would be participating in the $75bn program designed to save struggling home owners from losing their homes. The government said certain mortgage companies would receive a maximum of $9.9bn to encouraged them to lower monthly repayment obligations for the those struggling with home loans. Technology stocks down 0.7% – most the large caps were down. Intel’s results were
better than expected and they said that the bottom for the personal computer market was now behind them. Google was up ahead of its quarterly results tomorrow.

The market is up 53. The SFE Futures suggested a 58 point rise in the market this morning. Resources just up – BHP unchanged. Copper and Zinc both up over 5% last night and the respective metal stocks are flying again today. Property trusts all up. Financials up nearly 2%. Banks all doing well after another strong night in US financials. Industrials up 2.5% with the majors all up.

Sustainable Bull Market Not Likely

by Chris Ciovacco

Rather than relying on hope as the primary driver for making decisions, investors would be well served to focus on the fundamental and technical facts. An analysis of the facts leads us to conclude we are facing the following in terms of probable outcomes:

• Highest Probability – New lows / continuation of bear market.
• Moderate Probability – Cyclical bull – higher highs – followed by retests or new lows.
• Lowest Probability – A sustainable bull market (secular).

Fundamentals Remain Weak: From November 1929 to July 1932, there were five rallies in stocks between 20% and 23%, and all were followed by lower lows. In the 2007-2009 bear market, banks have been the area of primary concern. Banks remain a concern. While many market participants dismiss unemployment figures as lagging indicators, they fail to recognize that every time unemployment ticks up, default rates on all types of loans are going to tick up as well. The government has spent quite a bit of time and energy focusing on toxic assets in order to protect bank bondholders. The government’s programs will have a muted effect as long as housing prices continue to fall and unemployment continues to rise. The inventory of homes for sale remains very high. Home prices have further to fall until supply and demand come back into balance. As prices fall, the balance sheets of banks will continue to deteriorate. It is widely accepted that unemployment will rise further, which means default rates on loans will also continue to climb.

Recession Related Problems Still To Come: The government’s vast market intervention will do little to stem the tide of rising credit card and commercial real estate defaults. Banks have received significant government assistance with toxic assets, but they have major problems with more typical recession related issues, such as credit cards and commercial real estate defaults. Below are some excerpts from recent Bloomberg stories S&P 500 Can’t See Enough Money to Feed Stocks’ Rally and Mayo Gives Banks ‘Underweight’ Rating on Loan Losses.

• Wall Street analysts overestimated bank profits for at least six consecutive quarters.
• Commercial property loans in default or foreclosure jumped 43 percent in the first quarter as the contraction reduced occupancies and the credit crisis stymied refinancing. The decline may force banks to increase loan-loss provisions and write down the value of commercial property loans, which Citigroup, Bank of America and JPMorgan are all carrying at 100 percent of face value, according to estimates in a March 24 report by Richard Ramsden, an analyst at New York- based Goldman Sachs Group Inc.
• CLSA analyst Mike Mayo assigned an “underweight” rating to U.S. banks, saying loan losses may exceed Great Depression levels and the government may be forced to take over large lenders.
• “While certain mortgage problems are farther along, other areas are likely to accelerate, reflecting a rolling recession by asset class,” said Mayo, who joined CLSA from Deutsche Bank AG last month. “New government actions might not help as much as expected, especially given that loans have been marked down to only 98 cents on the dollar, on average.”
• Mayo said he expects loan losses to increase to 3.5 percent, and as high as 5.5 percent in a stress scenario, by the end of 2010. The highest level of loan losses in the Great Depression was 3.4 percent in 1934, according to the report [by Mayo].
• The nation’s largest banks may be transitioning from a financial crisis marked by writedowns of capital to an economic crisis featuring large loan losses, Mayo wrote. The U.S. government cannot provide much relief because its actions will lead to either banks having to raise new capital or toxic assets remaining on banks’ balance sheets, Mayo wrote.
• Mayo said solutions to the banking crisis will take time, as the increase in risk happened over a decade or more.
• Meredith Whitney, who left Oppenheimer & Co. in February to found Meredith Whitney Advisory Group LLC, said in a Forbes interview that banks will continue to write down their mortgage assets as home prices decline further than lenders expected. Home prices are not done falling and will ultimately drop 50 percent from their peak, Whitney said today in a CNBC interview.
• The unemployment rate also has exceeded banks’ projections and could lead to further loan losses, Whitney told Forbes. Banks “by and large” will show profits in the first quarter before provisions for loan losses, Whitney said on CNBC. (Source: Bloomberg.com).

Earnings Are Still A Problem: The S&P 500 is currently trading at 14x forward earnings. Forward earnings are another way of saying estimated earnings. If you have worked on Wall Street for more than a week, you know estimates of future company earnings are extremely inaccurate, especially estimates made 12 months in advance. Earnings estimates are about as accurate as a local weather forecast made a year in advance. Since January 1, 2009, earnings estimates for the S&P 500 have dropped from $75 to $59 (a 34% decline in three months). The odds are extremely high that earnings estimates for the next 12 months will continue to be reduced significantly in the coming months, which means the S&P 500 is trading with a PE higher than 14. Bear markets can end with PEs in single digits.

Recent Rally Impressive: The probability of a cyclical bull market taking shape has increased in recent weeks as investors have shown an increased appetite for risk in some markets. A cyclical bull market, in contrast to a secular bull market, is much shorter in duration and eventually gives way to the primary bearish trend. A cyclical bull market could see the S&P 500 advance as high as 940, which is 15% higher than current levels. Under the cyclical bull market scenario, stocks would take one of three paths after making higher highs (above 840):

• A correction back toward 840.
• A successful retest of the November 2008 or March 2009 lows (666-741).
• New bear market lows (below 666 on the S&P 500).

Some Positive Signs: Crude oil has shown some bullish signs by successfully testing a low, and then making an important higher high. Several markets, including some foreign stock markets and some commodity-related investments, have traced similar bullish paths in recent months. These are the markets we are focusing on at CCM as possible investment opportunities.

Some Concerns: The S&P 500 has not successfully tested a low, nor has it made an important higher-high. The odds are very high that before a new bull market can begin, the S&P 500 would have to successfully retest 741 or 666. This retest may come after higher highs, maybe as high as 940 on the S&P 500. The retest may occur during the current pullback or not for several months. Roughly 33% of the Dow 30 stocks have successfully tested a low, which leaves 67% most likely in need of a retest before a new bull market can start. Successful investors always focus on probabilities. Inexperienced investors are always looking for forecasts and predictions.

Some S&P 500 Levels To Watch: Support below the market may kick in at 770, 750, 730, and 700. Resistance above the market is at 836, 877, 885, and 944.

Leading Markets Show Signs Of Weakness: The markets shown below are some of the strongest markets in terms of technical strength. The technical strength tells us investors are more optimistic about these markets than they are about weaker markets such as the S&P 500. These markets may offer opportunities in the event we are in a new secular bull market or a cyclical bull market. While these markets all have some very positive characteristics, there are some technical yellow flags that we should not ignore.

Indicators Not Aligned With Price: In technical analysis, indicators should confirm moves in prices. For example when prices make a new high, we would like to see numerous technical indicators make a new high as well. When prices make a new high, but an indicator fails to make a new high, we have what is known as a negative divergence. A negative divergence can be an early signal that the bulls are losing some of their grip on the bears. Since March 23, 2009, we have seen numerous negative divergences in several leading markets. A single negative divergence in a single technical indicator is not all that concerning. However, the negative divergences become more significant when we see them in numerous indicators and across several markets. Below we present some negative divergences that may point to further corrections in risk assets. Since these divergences are shown on daily charts, they tell us to be cautious in the short-term. They do not necessarily send signals that these markets cannot advance after the current correction has run its course. Like all technical analysis, these divergences help us with probable outcomes – not certain outcomes. Once these divergences are cleared, positive divergences may appear which would be supportive of the cyclical or secular bull market outcomes. It is important to note these divergences appeared before markets started their current pullback.

S&P 500 Has Yet To Hold A Low: Our confidence level in the S&P 500 is not as great as markets that were able to hold above an important low and subsequently make a meaningful higher high. For those who missed it, we recently outlined some additional fundamental concerns in Stock Rally Built On Sand?.

The consensus seems to be for higher highs in stocks followed by a resumption of the bear market. While we can see this possibility, we also point out that few are acknowledging the possibility of new bear market lows. The consensus is rarely right in the financial markets. As a result, it is important to understand the big picture and observe with an open mind. If we do so, the markets will provide us with some meaningful insight into the state of the global economy.

The charts and commentary above are for illustrative and educational purposes only and are not recommendations to buy or sell any security.

Tricom Today Australian Stock Market Report 8-4-09

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The SFE Futures suggested a 50 point fall in the market. BHP and RIO both down in ADR form Friday – 3.72% and 4.57% respectively. (BHP closed at the equivalent of 3218c, down 52c on yesterday’s close.) Metals mostly up Friday – Copper up 2.55%, Zinc down 0.37% and Aluminium up 0.68%. Nickel up 1.44%. Oil price down 1.97% to $49.13. Gold up $10.50 to $883.30. Bonds up with the 10 year yield down to 2.8965%. A$/US$ down slightly to 71.11c.

European Banks weak overnight which added downward pressure on the sector in the US. The Royal bank of Scotland (RBS) said the UK government would take a 70% stake in RBS. RBS expected to cut more jobs. Japan’s financials were down – Mitsubishi and Mizuho Financial led the Nikkei down 0.3%. Auto stocks plummet – GM down 12%. Energy sector down about 3% – Exxon Mobil and ConocoPhillips down 2% and 3.5%. Telecom stocks down 3.7%. Health Care down 0.8% – managed health care providers were up 4.3% assisting the sector in outperforming. Caterpillar down 6%.

The market is down 60 points. The SFE Futures suggested a 50 point fall in the market this morning. The results season in the US got off to a bad start with Alcoa announcing a $497m loss in the first quarter – a bit worse-than-expected – the stock fell 3% in after hours trade. Citigroup, Goldman Sachs and JP Morgan Stanley report next week.

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%.

Asia Pacific Equity Daily – 6 April 09

Market comment

U.S. indices erased their earlier losses thus closing higher on Friday, helped by gains in real estate and auto sectors. On the economic front, the U.S. economy lost 663,000 jobs in March according to the Labor Department. Thus, the unemployment rate jumped to 8.5% last month. Also, the ISM non-manufacturing index fell to 40.8 in March from 41.6.

In Asia, the Nikkei 225 (Japan) rose 0.34% to 8749.84 (new 30d high reached), the Hang Seng (HK) rose 0.16% to 14545.69 (new 30d high reached) and the S&P/ASX 200 (Australia) rose 1.51% to 3735.6 (new 30d high reached).

Economic releases

AU 01:30: Mar AiG Perf of Construction Index
AU 01:30: Mar TD Securities Inflation MoM%
AU 03:30: Mar ANZ Job Advertisements (MoM)
JN 06:00: Apr BoJ Monetary Policy Meeting
JN 07:00: Feb P Leading Index CI, exp.: 75.3
JN 07:00: Feb P Coincident Index CI, exp.: 86.9

Corporate events

Results
None

Dividends
None

INDICES

Nikkei 225 (60 min)

Our preference: as long as 8550 is a support, we are bullish with a target at 8987.

Alternative scenario: a downside breakout of 8550 would open the way to 8450.

Hang Seng (60 min)

Our preference: as long as 13950 is not broken down, we favour an upmove with 14755 and then 14975 as next targets.

Alternative scenario: a break below 13950 would invalidate our bullish scenario. The index could then decline to 13790.

ASX 200 (60 min)

Our preference: as long as 3650 is a support, we are bullish with a target at 3817.

Alternative scenario: a penetration of 3650 would call for a consolidation to 3580.

STOCKS TO WATCH

Mitsubishi Corp (8058)

Our preference: as long as 1440 is support, we are bullish. In this case, the upside breakout of 1530 will trigger a bullish acceleration towards 1605.

Alternative scenario: a break below 1440 would open the way to 1415.

Santos (STO)

 Our preference: as long as 17 is not broken down, we favour an upmove with 17.96 and then 18.55 as next targets.

Alternative scenario: below 17, the risk is a drop towards 16.55.

Tricom Today ASX Stock Market Report 31-3-09

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The SFE Futures suggested a 57 point fall this morning. BHP and RIO both down in ADR form, 6.2% and 5.7% respectively. Metals all down overnight – Copper down 3.4%, Zinc down 2.5% and Aluminium 1.83%. Nickel down 1.29%. Oil price down 7.5% to $48.49. Gold down $7.70 to $915.50. Bonds up with the 10 year yield down to 2.71%. A$/US$ down to 68.13c. Biggest fall in 3 weeks US Government rejects recovery plans from GM and Chrysler. Financials struggled on concerns that banks will need another capital injection. Realization that the recent bounce was good but the economy can’t recover overnight.

Oz Minerals (OZL) announces it has received an incomplete alternative bid from Minmetals that would result in them acquiring most of its assets apart from Prominent Hill mine. They say, “OZ Minerals has received an alternative incomplete proposal from Minmetals which, when completed, will result in Minmetals acquiring all of OZ Minerals’ assets except for Prominent Hill, Martabe and the company’s portfolio of listed assets. It also said it will make an announcement on refinancing negotiations before the start of trading tomorrow and will try to make a definitive announcement the new Minmetals deal. OZL still in a trading halt.

The market is surprisingly doing OK – down only 22 compared to the 57 point fall the SFE futures predicted this morning following heavy falls on Wall Street overnight. It seems we soaked up most of the damage yesterday. Aussie banks doing well despite their US counterparts getting smashed overnight, Resources down. Except gold stocks.

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 27-3-09

The SFE Futures suggested a 44 point rise in the market.BHP and RIO both up in ADR form overnight – 5.05% and 8.35% respectively. (BHP closed at the equivalent of 3451c, up 73c on yesterday’s close.) Metals up overnight – Copper up 3.03%, Zinc 3.85% and Aluminium 1.83%. Nickel 1.30%. Oil price up 3.1% to $53.87 whilst analysts fail to be able to explain why oil prices are rising against economic data showing the US economy is shrinking and oil inventories are bloated. Gold down $4.20 to $940. Bonds up with the 10 year yield down to 2.7417%. A$/US$ up 0.61% to 70.19c. Financials up 1% – lagged the entire session. The Obama Administration announced their plans for rewriting the financial rules governing Wall Street – the plan is to set up a single regulator who can monitor and intervene in any large firm whose failure could threaten financial stability across the economic system. The outline of the plan also highlighted tightening rules for hedge funds and private equity firms. Technology stocks up 4% – one of the strongest risers overnight – the large caps and the NASDAQ outperformed. The government’s 7-treasury note auction received stronger demand than yesterday’s 5-year note sale. Some of the fears around the government’s cost of capital and investor risk appetites were allayed. Retailers up 4.4%. Best Buy, ConAgra, Dr Pepper Snapple Group – all beat analyst’s expectations. Discretionary stocks up 4.0%. The market is having another good day – up 53 – much in line with the 44 point rise suggested by the futures this morning. The ASX 200 is now up 16.8% from its low of 3120 registered on Tuesday 10th March.

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.