All eyes were on Wall Street Friday night

November 10th, 2008  by Antony Ganzitti

Closing Data

	current	change	%
Dow Jones	8943.81	248.02	2.9%
NASDAQ	1647.4	38.7	2.4%
S P 500	930.99	26.11	2.9%
FTSE 100	4364.96	92.55	2.2%
Nikkei 225	8583	-316.14	-3.6%
SPI Futures	4162	38	0.9%
All Ords	4,007.00	-99.9	-2.4%
Oil	61.06	0.31	0.5%
Gold	734.2	2	0.3%
Silver	9.963	-0.092	-0.9%
Aluminium	1956	-19.5	-1.0%
Copper	3761	-129	-3.3%
Lead	1446	-24	-1.6%
Nickel	11405	-50	-0.4%
Tin	15100	0	0.0%
Zinc	1080	-22.5	-2.0%

All eyes were on Wall Street Friday night as market observers eagerly anticipated the release of the US non-farm payrolls number.  Expectations were for a drop of 200,000 jobs in October, however the number came in greater at 240,000.  The Dow Jones gained 248 points for the trading session, as the previous sessions seemed to have already priced in the bad data.

US President-elect Barrack Obama said fixing the economy would take time, and added that economic stimulus, job creation, and help for the auto industry were top priorities.  Obama urged the Bush administration to do everything it can to accelerate disbursement of $25 billion in advanced technology loans to the industry.  Industry surveys last week showed US manufacturing suffered its worst slump in 26 years.

News out from China on Sunday was a $600 billion stimulus package focused largely on infrastructure and social projects.  China's State Council also announced a shift to a "modestly easy" monetary policy, possibly foreshadowing further reductions in borrowing costs on top of three interest rate cuts made since mid-September.

In Brazil, G20 ministers and other finance officials said there was a need for further moves to boost growth by other countries, including possible spending splurges or more interest rate cuts by some countries.

Locally, the RBA releases their statement on monetary policy today.  Futures markets are already pricing in yet another significant rate reduction before the end of the year.

Orica (ORI) reported full year results this morning, and for the 7th consecutive year have delivered profit growth.  NAB also announced plans for a $2 billion share placement to strengthen its balance sheet and take advantage of organic growth opportunities.  Once the institutional component is completed, NAB will offer retail shareholders access to a share purchase plan at a price similar to the institutional offering.

The local market is expected to open up 60-80 points this morning.  Fibonacci has been mentioned of late in the Market Fox and we completed a perfect 61.8% retracement of the recent rally (see chart below).  Friday's low should now mark the most important price level of around 3960 which traders need to focus on to make sure longs are still intact for November.

Note there is still some great premium on offer for buy-writes and covered calls for the months of both November and December.  Speak to your broker.

Also keep an eye on down and out property stocks Goodman Group (GMG) and General Property Trust (GPT).  They have both recently completed capital raisings which will allow them to reduce their gearing levels and reposition balance sheets accordingly.  It's not an easy road ahead, but the recent share issues cement some solid institutional support for the stocks which may mean a price floor has finally been reached.

A little spec stock that came up on a scan recently has been Marion Energy (MAE). Interesting price and volume action over the last week so as long as the price can hold Thursday and Friday's lows at 21.5, it wouldn't surprise to see this stock eventually target the mid 40's.

Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.

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